Good morning. Well the 6680 long worked out best running to target in the end yesterday. The short at 6705 was a little early, getting stopped out, but then the FTSE fell to the bottom of the Bianca areas at 6665 after all. Bit choppy in the evening as the US brought it right back up again to 6710, then a drop back to the closing level. Ever get the feeling it doesn’t know what it wants to do!?
There is quite a large divi today, 14.2 points so we may see a rise towards the close today with some divi hunters, though they have been pretty scarce recently. There is quite good support at 6640 today looking at the Bianca chart – 10 day and 50 day there, and we are pretty much testing the 20 day channel bottom as I write this, at 6675.
Asia Overnight from Bloomberg
Asian stocks dropped, with Shanghai shares retreating from the year’s highest close, and Australia’s dollar slipped as a private gauge of Chinese services industries fell to a record low. Emerging-market currencies climbed as corn and soybeans declined.
The MSCI Asia Pacific Index fell 0.4 percent by 1:40 p.m. in Tokyo. Standard & Poor’s 500 Indexfutures lost 0.1 percent after the U.S. gauge rebounded from its worst week since 2012. The Shanghai Composite Index decreased 0.3 percent and most Hong Kong shares declined. The Aussie weakened 0.1 percent to 93.23 U.S. cents as the country’s central bank left rates unchanged. Malaysia’s ringgit gained 0.3 percent and the Philippines peso added 0.4 percent. Corn and soybeans lost as much as 0.3 percent.
A purchasing managers’ index of China’s non-manufacturing sector fell to 50 in July, the borderline between expansion and contraction and the lowest reading in data from HSBC Holdings Plc and Markit Economics. The Reserve Bank of Australia reiterated a forecast for interest-rate stability, while India’s central bank decides today on monetary policy before the U.K. and U.S. report services data. Tom DeMark, the developer of market indicators, said the Shanghai Composite Index will end its world-beating advance within days and fall about 10 percent.
“The Chinese PMI figures came in a bit below expectations, showing a stalling of the recent upturn in the Chinese data, so that’s putting some downward pressure on commodity currencies like the Aussie,” said Desmond Chua, a strategist at CMC Markets in Singapore. “The Aussie will remain above the 93 U.S. cents.”
Asia Gauges
Five stocks fell for every three that advanced on the Asia-Pacific gauge today, with seven of the 10industry groups retreating. The measure trades at 13.5 times estimated earnings, compared with 15 times for the Stoxx Europe 600 Index and 16.2 times for the S&P 500.
The Shanghai Composite slid after closing at 2,223.33 yesterday, the highest level since Dec. 10. China’s benchmark equity index, which surged 9.9 percent from June 19 to yesterday, will erase those gains and drop below this year’s intraday low of 1,974.38, DeMark wrote in an e-mailed response to questions from Bloomberg News. He said the losses may occur over about six months.
Taiwan’s benchmark stock gauge slumped 1.7 percent, the biggest drop since April 25, and is trading at the lowest level in seven weeks. The Hang Seng China Enterprises Index fell 0.6 percent in Hong Kong and the Hang Seng Index (HSI) fluctuated, with three companies retreating for every two that advanced.
S&P
Better-than-estimated earnings from Warren Buffett’s Berkshire Hathaway Inc. (BRK/B) and rising energy stocks helped ignite gains yesterday in the S&P 500, which slid to a two-month low last week as about $1.2 trillion was wiped from global equity values.
FTSE Outlook
Todays pivot is 6688 so we may see initial resistance there; the gains yesterday afternoon were wiped out quite quickly, though the bulls did try to break 6705, which shows there is still fear around. Major support is still at the 6622 level, a break of which leads to 6590 and possibly 6500. 6716 was certainly resistance for yesterday as the market spent a few hours banging on that level. If the price breaks above the pivot today that will be the first level to take some profit, then 6725. Above that 6748 is the top of the 10 day Bianca channel, then possibly 6785. I am still feeling slightly optimistic for the start of this week before more falls towards the end – so shorting off key levels probably tomorrow should be a good play.
If the pivot does hold as resistance then the first support below that is 6675 (bottom of the 20 day Bianca) and then 6640 (10 day Bianca channel bottom). For today I am envisaging a bit of a V shape with a dip and rise. Longs around 6650/6640 could be alright for a run to 6700 again. There is a pretty decent 30 minute channel in play too which tallies with those daily chart levels.
Thanks Nick 🙂
The market has played all morning above the pivot.
All morning, it means since it open…so the blog is out of date.
dow gave up all yesterday’s gain 🙁 Falling since dow closed yesterday
Yes, a bit annoying as I was waiting for 61% retrace to the morning rise to continue further rises. But didn’t expect it would drop below 537.5 area (pivot). No long is seen at the moment, looks like consolidation of some sort. But it needs to retrace a bit higher so I do not rule out any possible rises.
PMS, was your long order taken?
no 🙁 for less than 1 point
now will wait for a bigger drop or a bounce and close above the 200dma
I think Dow is heading to 16180
Looks like the opposite at the moment
unless it closes today above 16650
It needs to clear that bear flag pattern (that’s one of those patterns that almost have 100% effectiveness)
dow should make that 16650 today. Just wish 🙂
contrarian sentiment… that’s the spirit
Long dow @ 490
booked @ 530
Senu, did you booked your dividends on FTSE ? 😀
I wasn’t trading FTSE today, booked yesterday’s longs @ 6705. Didn’t want to enter for divi hunting.
Long dow @ 500
When it started moving higher yesterday I thought we would start a huge rally with panic buying. It just hasn’t happened and every step forward is chopped back. We may have another leg down to wipe the likes of me out before it grinds higher. The market always over extends both ways.
What a stinger! Well done to shorts. I’m out of dow and Dax just long S&P now…
Great drop, 1900 S&P on the cards
Just added too my dax long
Out complete now. A bad few weeks. Started so well
🙁 why this drop
Exact opposite of what has been happening for months with record highs…closed all but 4 pips on the DOW sitting on a tidy sum, planning on build midterm long term longs over the next week…
Surely we all know that Russia is invading the west? On that basis it’s all over there’s no backstop, down, down, down until it goes up and when it does it will be followed by down, down, down, then up! Sorry but this is a rant what a loa dog bullcrap, bottom line it’s good news wait it out 🙂
Russia is only one part of the puzzle Hubris… Earning have not been so hot then the Feds and interested rise plus shit load of other stuff… Still think this bubble blow bull run has at least another year left in it not say it’s going to be a smooth ride up but it will go back up.
I think we saw the bottom in US
The markets are right now already assuming rate hike. When finally, they announce, the markets will sky rocket.
sell in rumor, buy in news
Not to sure Pms think they want too squeeze every last drop out of this still think we my see 1880 sp not to sure about Dow 200 day moving average is around 16400 and it did get back above it.
Look at gold. THe Ukraine situation means nothing… We have an abandoned baby candle on FTSE in a bottom. You tell me… where the markets are going next ?
Tomorrow we may see a gap up and next days a strong rally
Looking to place a order at 6620