Good morning. I think IG read my trade plan yesterday as the short order 6915 missed by 1 point, and the long got stopped out by 1 point, so not ideal for the automated trades. That said it did go to plan with the initial rise towards 6915, a dip down to 6970 and then a further rise – it just needed to be manually done! The bulls failure to break 6915 means that is still the level that they need to break to invalidate the current bearishness – will we get a Bull Tuesday? The S&P was certainly bullish yesterday, breaking through the 2077 resistance and crucially closing above it; further upside this week could well see the EMAs cross back to bull. There is a lot of news about China and how any slowdown there would drag everything down, however, news overnight that they will support economic growth got everything bullish. Today we have the UK GDP at 09:30 and US consumer confidence at 15:00 – both of which will get things moving around those times.
US & Asia Overnight from Bloomberg
(Bloomberg) — Asian stocks rose, with the regional benchmark poised for the best quarter in three years as China moved to support economic growth, sending shares higher in the U.S. and Europe and the yen tumbling against the dollar.
The MSCI Asia Pacific Index added 0.6 percent to 147.35 as of 9:01 a.m. in Tokyo, on course for a 6.9 percent quarterly advance, the most since the first three months of 2012. China’s central bank announced measures aimed at stemming a property slump after Governor Zhou Xiaochuan said at the weekend that policy makers can do more to support Asia’s largest economy. The Shanghai Composite Index surged 17 percent this year through yesterday and Japan’s Topix index added 11 percent.
“Investors continue to work on the expectation that the People’s Bank of China will deliver more policy reports in coming months and that the U.S. Fed will be cautious about its policy deliberations,” said Matthew Sherwood, head of investment markets research in Sydney at Perpetual Ltd., which manages about $21 billion. “U.S. economic data overnight had no clear trend, but European economic sentiment continued a run of improving data.”
The Topix gained 1.2 percent today after the yen slid 0.8 percent against the dollar on Monday. Australia’s S&P/ASX 200 Index also climbed 1.2 percent and New Zealand’s NZX 50 Index added 0.2 percent. South Korea’s Kospi index rose 0.7 percent.
Futures on the FTSE China A50 Index climbed 1.5 percent in the most recent session. Mainland stock gains this year have been fueled by expectations of central-bank policy easing, optimism the government won’t let economic growth fall below this year’s 7 percent target and as authorities reduced curbs on the property market.
Sales of previously owned U.S. homes climbed 3.1 percent in February for a second monthly advance, data from the National Association of Realtors showed. Economists had forecast a 0.3 percent gain.
The Stoxx Europe 600 Index climbed 1.1 percent on Monday. Euro-area economic sentiment rose in March to the highest level in more than 3 1/2 years, European Commission data showed.
E-mini futures on the Standard & Poor’s 500 Index were little changed. The U.S. equities gauge jumped 1.2 percent yesterday, while the Dow Jones Industrial Average posted its biggest gain in almost eight weeks. Fed Chair Janet Yellen said Friday she expects U.S. interest rates to rise this year, with subsequent increases to be gradual. [Ref]
FTSE 100 Prediction
We are just below the daily pivot as I write this, which is 6890 (IG) and 6887 (live charts) so we may well get an initial dip to start the day today – certainly the moving averages not he 10 and 30minute charts are both bearish. If we do dip initially then the first support levels to watch are 6870, with a lower level 6848 – a level that could well see a decent bounce if it got that low. As mentioned above, the bulls need to get the price above 6918 to reverse the weakness and have a push to new highs, so if we move above the pivot then longs to target 6918 are worth doing. Above 6918, we have 6925 and 6945 as resistance, followed by the daily channel kicking in – the top of the 10 day Raff at 6970, and then the 10 day Bianca at 7064. I actually remain fairly bullish for the moment, as the daily EMAs are still bullish, and with the US strength yesterday I think we are still on for a push soon to above 7000. That said, as per usual March has been a bit weak, with the month opening at 6931, and looking to close out slightly below (unless the bulls perform today to close above that).