FTSE 1o0 Support 6903 6902 6879 6860 6783
FTSE 100 Resistance 6911 6945 7010 7053

Good morning. Shame the short order at 6944 just missed on the FTSE as it dropped from 6939 instead to just below the 6900 level. We had 200ema (and still do in fact) support there which has stopped the fall but not really set up much of a bounce, so far at least. The S&P rebounded from its closing lows as well after hawkish Fed comments, with interest rate rises back on the horizon.

We have a 7.6 dividend on the FTSE as well today – might see a little bit of a rise towards the bell from the divi hunters. Though there wasn’t much last week and it was 36 points! I think the markets have wised up to people chasing that rise, and aren’t playing the game like they used to.

US & Asia Overnight from Bloomberg

• Japanese shares advance as yen pulls back from 100 level
• New York Fed chief says interest-rate rise is drawing closer

Emerging-market stocks retreated from near a one-year high and oil fell for the first time in a week after hawkish comments from Federal Reserve officials helped revive the dollar.

Industrial shares led losses on MSCI’s gauge of developing-nation shares, which snapped an eight-day winning streak on Tuesday, and crude pulled back from a five-week high. Japanese equities rose for the first time this week as the yen fell. The Bloomberg Dollar Spot Index rebounded from near a three-month low after two regional Fed chiefs indicated interest rates could be increased at least once this year. U.S. Treasuries held losses before minutes from the Fed’s July meeting are published.

Global equities climbed to a one-year high this week and the dollar index sank to a three-month low as conflicting signals over the U.S. labor market and growth cast doubt over the Fed’s plans to tighten monetary policy. With traders pricing in basically even odds of a rate increase by December, New York Fed President William Dudley said Tuesday markets were “too complacent” on the outlook and borrowing costs could be boosted as soon as next month. Atlanta Fed chief Dennis Lockhart also chimed in, saying he’s confident growth is accelerating enough for at least one hike in 2016.

“Comments from Dudley certainly knocked the wind off the market rally,” said Matthew Sherwood, head of investment strategy at Perpetual Ltd. in Sydney, which manages about $21 billion. “The market has had a tremendous rally and is probably due for a pullback.”

St. Louis Fed chief James Bullard is due to speak Wednesday and the minutes of the U.S. central bank’s last policy meeting are scheduled for release at 2 p.m. in Washington. Tyco International Plc and Johnson Controls Inc. have shareholder meetings scheduled to vote on their proposed $16 billion merger, while Tencent Holdings Ltd., Cisco Systems Inc. and Carlsberg A/S are among companies reporting results.

Stocks

The MSCI Emerging Markets Index was down 0.5 percent as of 1:48 p.m. Tokyo time, trimming this quarter’s advance to about 9 percent.

“The Fed comments reverse the feel-good feeling to a certain extent,” said Geoffrey Ng, who oversees $260 million as an investment adviser at Fortress Capital Asset Management Sdn. in Kuala Lumpur. “It’s not surprising to see markets pulling back after a fairly good run post-Brexit.”

Japan’s Topix index gained 0.5 percent, while benchmarks declined in Malaysia and South Korea. The Hang Seng Index and the Shenzhen Composite Index both added less than 0.3 percent after an exchange trading link between Hong Kong and Shenzhen was unveiled. The link may start in about four months, according to details announced late Tuesday. Indonesia’s financial markets were shut for a holiday.

BHP Billiton Ltd. gained as much as 3.4 percent in Sydney after reporting a record full-year loss. The world’s biggest mining company indicated on Tuesday that it’s emerging from the worst commodities price collapse in a generation with renewed impetus.

Futures on the S&P 500 Index rose 0.1 percent, after the benchmark slipped 0.6 percent from a record high in the last session.

Currencies

The Bloomberg Dollar Spot Index rose 0.2 percent, after sliding 1 percent over the last three days. Dudley and Lockhart’s comments helped push the probability of a Fed rate hike above 50 percent in the futures market for the first time since June 23, when the U.K. voted to leave the European Union.

“While Dudley was at least able to stem the bleeding for the dollar index, price action is not encouraging for the dollar near term,” said Sean Callow, a senior foreign-exchange strategist at Westpac Banking Corp. in Sydney. “Still, so long as a rate hike seems more likely than not as the Fed’s next move, we wouldn’t get super bearish on the dollar.”

The yen was down 0.4 percent at 100.65 per dollar, after strengthening beyond 100 on Tuesday for only the second time this year. Japanese Vice Finance Minister Masatsugu Asakawa said policy makers are prepared to intervene if exchange-rate moves are extreme. South Korea’s won slid 1.2 percent, retreating from near a one-year high.

Commodities

Crude oil fell 0.6 percent to $46.29 a barrel in New York as weekly industry data showed U.S. gasoline stockpiles expanded, keeping supplies at the highest seasonal level in more than two decades. It surged 12 percent over the last four days, the steepest rally since April, after Saudi Arabia indicated it was prepared to act to help stabilize prices after oil sank into a bear market earlier this month.Nickel rebounded from the lowest level in five weeks as the Philippine Chamber of Mines called on companies to comply with environmental standards ordered by the government, a move that may deepen production cuts in the world’s largest supplier. Copper declined 0.3 percent in London, while tin lost 0.8 percent.

Bonds

The yield on U.S. Treasuries due in a decade was little changed at 1.57 percent, after climbing six basis points over the last two days. The rate on similar-maturity bonds in Australia increased by two basis points to 1.91 percent. [Bloomberg]

FTSE 100 Outlook and Prediction

Ideally we still need a test of the 100 Hull MA on the 2 hour chart, which is resistance at 6944 for an ideal short entry for a decent run down. Whether we see that today remains to be seen. However, if we do get a rise then its worth trying a short, and the reason I am thinking we will get a rise is that the area just below 6900 has held ok. We also have the 10 day Bianca channel at 6903 for support to start with today.

I am still feeling slightly more bearish than bullish so still thinking that shorting the rallies is a good plan, for a drop down towards 6800 later in the week. Of course, if the bears charge today and we break the 6885 area then that could be a bit sooner! So, still a bit light volume, hard to call summer trading going on, however, a short from the 6945 area could be lucrative. Its all up to the bulls first thing really and that will set the tone for the day.