Good morning. Another volatile session yesterday which wasn’t really much of a surprise, with the FTSE hitting a high last night at 6120. The Fed hinted at a less likely rate rise in September now, which isn’t much of a surprise, though they are still saying that the data is strong. But the recent stock market weakness might cause them to delay. Asia stocks closed up for the second day, taking the FTSE up with it, though its now near the top of the 10 day Bianca at 6103.

US & Asia Overnight from Bloomberg
Asian stocks rose for a second day after U.S. shares halted a six-day rout.

The MSCI Asia Pacific Index gained 0.9 percent to 127.93 as of 9:05 a.m. in Tokyo. The Standard & Poor’s 500 Index jumped 3.9 percent, the most since 2011. Two things that have supported U.S. stocks in the past, dovish words from the Federal Reserve and improved economic data, halted a plunge that erased $2.2 trillion from equity values.

Global market turmoil has weakened the case for raising U.S. rates in September, Fed Bank of New York President William C. Dudley said, cautioning that it’s important not to overreact to short-term developments. Chinese stock-index futures signaled a rally, as contracts on the FTSE China A50 Index gained 1.7 percent.

“Solid U.S. economic data, stimulus efforts from the Chinese central bank and signs that the Federal Reserve are backing off from a September rate hike helped,” said Jasper Lawler, a London-based market analyst at CMC Markets. “Anxiety is likely to maintain a tight grip over investors until the wild gyrations in share prices calm down and signs of a bottom are put in markets.”

Japan’s Topix index rose 2.4 percent. South Korea’s Kospi index gained 0.5 percent and Australia’s S&P/ASX 200 Index climbed 0.7 percent. New Zealand’s NZX 50 Index rallied 1.3 percent.

The S&P 500 rose the most since November 2011 in New York, while the Dow Jones Industrial Average jumped 619 points, or 4 percent. Trading was subject to the same fluctuations seen in overseas markets. A surge in the first few minutes of trading was more than halved before an afternoon rebound took over. E-mini futures on the S&P 500 added 0.1 percent Thursday. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

We are starting off fairly positive after a decent US session that saw the S&P and Dow break back above fairly key round number levels (1900 and 16000) by some margin, and off the back of a positive Asia session. We are however just nearing the top of the 10 day Bianca and raff channels at the 6100 area so we may well see a pull back to the daily pivot at 6025 initially, though there is a pretty decent 10min rising channel in play, which has support at the 6075. There is also support on the 30 min at 6075 so the bulls might use this as an entry level to build on last nights gains. If the 6103 holds as resistance it might be worth a short here though to be honest over the next couple of weeks I am still feeling like we will see a bounce and am looking at 17250 on the Dow. That should tally with taking the FTSE back to 6500, so buying the dips does still feel like the right thing to do and I am still thinking that the Fed won’t cut rates in September, reinforced by Dudley’s comments yesterday.

Good morning. I was a bit early with the SMS to get long yesterday morning but well done those that re-entered on the bounce as it climbed as expected, hitting 6118 at the high. However, the volatility continued after the bell with an overnight drop to 5900 and is now back at 6060! Wild times and not a period to lose you head or risk your shirt. No harm in sitting on the sidelines like this if you are not able to fully focus! With these bounces I am still pretty positive overall, and see dips on shares and indices as good buying opportunities. I don’t think we will see interest rate rises soon, and the latest consensus for the UK rate rises has been pushed back to October 2016. This is quite a good article from Neil Woodford here

US & Asia Overnight from Bloomberg
Asian stocks rose, with Japanese shares rebounding from the biggest two-day plunge since 2011, as investors awaited the opening of mainland Chinese markets following Tuesday’s cut in interest rates.

The MSCI Asia Pacific Index advanced 0.7 percent to 125.75 as of 9:07 a.m. in Tokyo, after capping an eighth straight decline Tuesday to enter a bear market. Futures on the Standard & Poor’s 500 Index retreated 0.9 percent.

After the Shanghai Composite Index fell 7.6 percent Tuesday to cap a 22 percent, four-day plunge, China’s policy makers cut interest rates for the fifth time since November and lowered the amount of cash banks must set aside. While Chinese equity-index futures surged, with contracts on the FTSE China A50 Index jumping 4.9 percent, exchange-traded funds tracking the nation’s shares almost erased rallies in New York.

“China continues to be key,” Komal Sri-Kumar, the Santa Monica, California-based founder and president of Sri-Kumar Global Strategies Inc., told Bloomberg TV. “The authorities have not been intervening, they’ve been allowing stocks to go down in price. Assuming that continues to be the case on Wednesday, I do see a continued fall in prices.”

Japan’s Topix index rose 1.5 percent. Australia’s S&P/ASX 200 Index declined 0.7 percent and South Korea’s Kospi index retreated 0.2 percent. New Zealand’s NZX 50 Index added 0.2 percent.

Volume soared and swings on the regional Asia Pacific equity gauge broadened to the widest since March 2011 on Tuesday. The global share rout has wiped more than $8 trillion from investors since China’s unexpected devaluation of the yuan on Aug. 11. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

Its a wild week for trading thats for sure, though its bounced once again overnight and I think we will see the same again today as yesterday. Yes there is a lot of doom and gloom around, yes there is a weakening backdrop (but its been weak for ages), but equally the market is oversold still, as the daily RSI(10) is still below 30, though risen now to 29 from 15 yesterday and 9 on Monday. So there is a bit of strength around. If the bulls can hold above 6000 then we should see a retest of 6100, and the 200ema at 6112, and then possibly the top of the 10 day Bianca at 6222. We are just testing the top of the 10 day Raff at 6060 so we might well get a dip at around the open, which would take us down to the 25ema on the 30min at 6000 which looks like a decent spot for a long entry, with the bottom of the 20 day Bianca at 5942 below that.

Good morning. Wow, what a day that was yesterday. The Dow opened up over a thousand points down, and was -1250 at one point – it was bearish history in the making. Was a volatile one though as it then rose a thousand points, more like gambling than trading when its like that. The morning was alright for us with the Dax and Gold trades working well but the FTSE order got stopped out. As with the others it was all over the place – not very often you see the FTSE at -500 for the day either. If you wanted to see what panic and fear looked like on the market, yesterday was it. Asia has bounced overnight as eyes will be looking to measures to stop the rout now – stimulus, not raising rates etc etc. Can see the Dow rising to 17250 before another dip down, maybe 16500?

US & Asia Overnight from Bloomberg
Asian stocks rose with U.S. index futures after a selloff that wiped $2.7 trillion from global equity markets on Monday. Oil climbed from six-year lows, while the yen retreated with government bonds.

Australian and Korean equities led gains through Asia, while Chinese shares dropped a fourth day. Futures on the Standard & Poor’s 500 Index rallied 2.2 percent after the U.S. benchmark entered a correction for the first time since 2011. The dollar strengthened versus major peers as 10-year Treasury yields rose for the first time in five days. Oil climbed 1.6 percent in New York after falling to $38.24 a barrel.

“Our bottom line is that the world’s still not a bad place,” said David McDonald, Sydney-based chief investment strategist for Australia at Credit Suisse Group AG’s wealth management and private banking unit. “Fundamentals aren’t as bad as the headlines would suggest. It’s just a case of whether you would want to rush in now or perhaps wait until it settles down a bit more.”

China’s decision to cut the value of the yuan two weeks ago has sent convulsions through global markets, sending all but the safest of assets tumbling amid speculation that the world’s second-largest economy is in more trouble than previously thought. The rout has driven gauges of volatility to multi-year highs and sent bond yields tumbling as investors wound back bets that the Federal Reserve will begin raising interest-rates as soon as next month.

Asia Rebound
The MSCI Asia Pacific Index rose 0.5 percent by 12:52 p.m. in Hong Kong, as the S&P/ASX 200 Index climbed 2.5 percent and the Kospi index added 1.2 percent in Seoul. Taiwan’s benchmark stock gauge jumped 3.3 percent, while Singapore’s advanced 1.8 percent.

Japan’s Topix index increased 0.4 percent, erasing a loss of as much as 4.7 percent, as the yen retreated. The currency weakened to 119.04 per dollar after surging 3 percent to 118.41 on Monday, the strongest since February.

U.S. futures signaled the first day of gains for the S&P 500 since Aug. 17. The U.S. benchmark dropped 3.9 percent to 1,893.21 at the close in New York, 11 percent below its May record. Contracts on the Dow Jones Industrial Average advanced 2.2 percent and those on the Nasdaq 100 Index increased 1.8 percent.

A gauge of options prices on U.S. equities surged as much as 90 percent Monday to touch the highest level since January 2009. The Chicago Board Options Exchange Volatility Index, or VIX, finished the day at 40.74, the highest close since October 2011.

Quake Levels
Measures of price swings retreated across Asia, with the Hang Seng Volatility Index sliding 1.1 percent and the Kospi 200 Volatility Index falling 2.2 percent. Both gauges hit almost four-year highs Monday.

Japan’s Nikkei Stock Average Volatility Index was little changed as stocks in Tokyo erased losses. The measure had earlier surged as much as 30 percent, at one point heading for its biggest-two day jump since the March 2011 earthquake, tsunami and nuclear disaster.

Chinese equities defied the rebound, with the Shanghai Composite sliding 4.3 percent and a gauge of Chinese companies in Hong Kong fluctuating. The Hang Seng Index, which entered a bear market Friday, climbed 1.6 percent.

The mainland’s benchmark equity index has lost almost 20 percent since Wednesday and is down 40 percent since peaking on June 12. Unprecedented efforts by the government to halt the rout have come to nothing, with the gauge erasing all gains since the beginning of rescue efforts before going on to wipe out 2015’s advance.

“It’s panic selling and it’s an issue of confidence,” said Wei Wei, an analyst at Huaxi Securities Co. in Shanghai. “It looks like investors have all lost their confidence so there’s still room for the market to go down further. The government won’t step in to rescue the market again as it’s a global sell-off and it’s spreading everywhere now. It’s not going to work this time.”

China’s central bank added the most funds to the financial system in open-market operations since February as currency-market intervention to prop up the yuan strained the supply of cash.

The offshore yuan rallied 0.4 percent in Hong Kong. The one-week interbank savings rate for offshore yuan jumped as much as 840 basis points to 22.9 percent, the highest in data going back to 2010. That compares with 3.3 percent at the start of the month. [Ref]

FTSE Outlook

FTSE 100 prediction

FTSE 100 prediction

Conditions for the brave at the moment and doesn’t make writing this very easy thats for sure! I wouldn’t be surprised if we have seen the very short term low for the moment, and the FTSE rises back above 6000 soon, before another leg down. As I write this at 6am the moving averages on the 10 and 30min charts are positive so we may continue the overnight bounce with some sharp pull backs along the way. At 9pm last night the FTSE was -100, its now +70 so its not really calming down much as yet. We will probably get a bear squeeze rally today. Not too much to say really apart from buckle up, buy the dips today I think when it goes down to the support levels mentioned below (members only) and lets see if the bulls can do anything today. The daily RSI(10) has ticked up a little bit from its lows as well, now printing 15 compared to 9 – if it can get through 30 then we will be less oversold.

Good morning. I hope you had a good weekend. Well the Bulls managed to break that 6275 resistance on Friday morning but the 6335 pivot held fast and decline it did as a wave of fear swept thorough markets during the day. Fear and greed, always has and always will be the two main forces that move markets! Today that has continued and its been along time since there has been a sea of red across the indices first thing. Going to be some forced selling today and margin calls I think! Once again its China as stocks plunged the most since 2007 as government support measures failed to allay investor concerns that a slowdown in the world’s second-largest economy is deepening.

US & Asia Overnight from Bloomberg
Asian stocks extended declines as a global rout deepened, dragging a measure of regional equities down 20 percent from its April peak. A close at this level would mark the start of a bear market.

The MSCI Asia Pacific Index retreated 4.4 percent to 125.75 as of 12:35 p.m. in Tokyo as stock gauges from Sydney to Hong Kong tumbled. Global equities have lost more than $5 trillion in value since China’s shock currency devaluation on Aug. 11, with U.S. shares succumbing to the selloff at the end of last week.

“Things are probably going to get worse before they get better,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which oversees about $118 billion, said by phone. “You really need rate cuts and more policy easing in China. In the meantime, things can get worse. We’ve got to see more clarity around the Fed” and its timeline for raising interest rates.

Hong Kong’s Hang Seng Index, which entered a bear market last week, fell 4.6 percent. Japan’s Topix index dropped 4.7 percent, heading for a correction. Singapore’s Straits Times Index slid 3.2 percent, set for a three-year low. The Shanghai Composite Index tumbled 8.5 percent, while Australia’s S&P/ASX 200 Index retreated 3.5 percent. New Zealand’s NZX 50 Index lost 2.4 percent.

Calm in the U.S. stock market was shattered last week, with volatility soaring by the most on record as the Dow Jones Industrial Average entered a correction and investors dumped the biggest winners of 2015. E-mini futures on the Standard & Poor’s 500 Index fell 2.7 percent Monday.

Taiwan on Sunday slapped a ban on short-selling of borrowed stocks at prices lower than the previous day’s close, while South Korea’s finance ministry said it will act “pre-emptively” after the nation’s largest exchange-traded fund suffered the biggest weekly withdrawal since its inception 15 years ago. The Taiex index slumped 4.9 percent on Monday, while the Kospi index fell 3.5 percent in Seoul. [Ref]

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

Tricky one to write today thats for sure. Its been a long time since we have had such a sea of red first thing in the morning, and with the China falls shaking off the stimulus, the Yuan rate cut the other day has really let the genie out of the bottle and its going to be tricky to get it back in (and all sorts of other analogies about horses, barn doors and bolting). Once the charts do start to show any sort of bounce then the slightly more positive news flow will start. There is bound to be a bit more forced selling today so those brave bulls around might start to slowly build up positions or add to last weeks longs to target 6300 this week. When its like this there is no clue as to where the bottom is. That said the bottom for the 10 day Raff was 5940 for today and that level has been tested and has held so far today, and obviously the markets are pretty oversold right now (RSI10 is reading 9.8). Mostly this is being driven by fear so most technicals are irrelevant, however that level and 5835 below that are supports on the charts. Rate cut in September anyone? I can see an initial rise to 6075ish pre market, and maybe then some more bear, a bit of a repeat of Friday really with the rise and dip. If 5940 holds then a further rise towards 6100 when the US come online is possible, though maintain a bearish vibe for the moment, though interestingly Gold has slipped off its highs today, and if it was all 100% bad then that would still be rising.

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