6732, 6716, 6686 Support, 6774, 6808 Resistance

Good morning. Bull monday again yesterday so if that follows the past few weeks we should now have bear Tuesday! The FTSE trended up for most of yesterday, blowing the 6722 resistance away but dropped a little bit from the 6746 area. It rose again and stalled at 6760 as it tried to peek above the Raff channels. As I write this the FTSE and Dax are both pushing the top of their 10 day Raffs, so we may see an initial dip, before resuming the upward movement again. Last weeks worries seem to have been forgotten about pretty easily, and we have Yellen addressing US lawmakers later regarding future interest rate clarity. Not much change in the FTSE futures overnight either, pretty much where it was at 9pm last night.

Asia Overnight from Bloomberg
Asian stocks rose, with the regional index headed for a one-week high, as the Bank of Japan kept monetary policy stable before Federal Reserve Chair Janet Yellen addresses U.S. lawmakers. Corn resumed declines, while the currencies of South Korea and Indonesia weakened.

The MSCI Asia Pacific Index gained 0.4 percent by 12:59 p.m. in Tokyo. The Hang Seng Index added 0.5 percent in Hong Kong as Chinese lending and foreign-direct investment data beat estimates. Standard & Poor’s 500 Index (SPA) futures were little changed following a 0.5 percent advance in the U.S. benchmark. Corn futures fell after rebounding from a four-year low yesterday. The won slipped to a five-week low versus the dollar and the rupiah weakened a third day.

Yellen addresses senators amid speculation over the outlook for interest rates. BOJ officials held stimulus at current levels. The Reserve Bank of Australia reiterated that it expects a period of interest-rate stability, while reports are due on U.K. inflation and German investor confidence. Citigroup Inc. (C) posted better-than expected trading revenue in the U.S. amid a week of bank earnings.

“Markets are expecting Chair Yellen to maintain her cautious stance, but some acknowledgment of the progress in employment and inflation toward Fed goals will be required,” Mark Smith, a senior economist in Auckland at ANZ Bank New Zealand Ltd., wrote in a client note today. “Markets believe the BOJ will be forced to act later this year.”

Monetary Base
Japan’s central bank stuck with its goal of an annual increase in the monetary base of between 60 trillion yen and 70 trillion yen ($690 billion), it said in a statement today in Tokyo, as forecast by all 34 economists surveyed by Bloomberg News. The BOJ will expand monetary stimulus Oct. 31, according to 32 percent of economists surveyed July 3-9. That was down from 33 percent in a survey completed last month.

Japan’s Topix index climbed 0.6 percent and was headed for its highest close since July 8 as the yen traded little changed at 101.58 per dollar after dropping 0.2 percent yesterday.

A gauge of Chinese shares in Hong Kong advanced 0.4 percent, while the Shanghai Composite Index fluctuated. New yuan loans topped 1 trillion yuan ($161 billion) for the third time this year, beating the 955 billion-yuan median estimate of economists surveyed by Bloomberg. Foreign-direct investment grew by 0.2 percent in June from a year earlier versus a forecast for a 7 percent decline.

Australia’s S&P/ASX 200 Index (AS51) erased a gain to fall 0.3 percent after the RBA minutes, and the local dollar traded at 93.95 U.S. cents from 93.85 cents before the release.

The Kospi index in South Korea jumped 0.8 percent, set for the highest close since July 3. Markets in Malaysia are closed for a holiday.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Today I am watching for support at the daily pivot at 6732, and resistance at the top of the 10 day Bianca channel at 6774. We also have a ProTrend line with resistance at around 6766 based on yesterdays high. I am expecting the dip from 6760 that started yesterday to continue first thing this morning, probably to the pivot at 6732. If that level breaks then in theory we have the potential to drop to 6700, though I think it might stall around the 200EMA on the 30minute chart at 6720.

66 Comments

  2. Still have the other 2 positions, for brighter days in FTSE.
    Meantime will buy the 3 rd postion again in other level, after it is closed today

  5. Looks like I’m missed a few good days!! How is everyone getting on. Anyone have any trades at the moment

  9. FTSE/4 hrs. — Could be that ≈ 6760 is as high as it goes; momentum easing.
    FTSE/Daily — Tilting still, since the beginning of June — can’t rule out renewed slide ≫ 6600.

  13. You might be right. The forecasts for US retails seem higher. Morgan and Goldman could see better than expected, following Citigroup.
    The wild card is Yellen

  14. I still sense we will have a hot summer with new highs. Late September is when I think Markets will tank

  16. British opposite to Yankees 😀

    “BOE’s Carney says his early interest rate rise comments were intended to make markets more aware of risks”

  26. i was long on dax yesterday from 9764..got stopped out this morning..just seen the double bottom on 30min chart and gone long again at 9730 and 9750..hope to see 10,000 soon 🙂

  28. Marco — I agree the Dow looks strong, the daily chart especially so I think — but rather mistrustful of the FTSE! It isn’t really sharing the Dow’s growth patterns — so far as I can see. 🙂

  29. SOmeone told here, in early 2014, would be the FTSE year, surpassing the US markets performance. I do not recall who said that.
    7 months past and FTSE still the same snail 😀 as always.

  33. Dow breaking 17100. FTSE struggling 😀 . British waiting to confirm if the yankees are for real…they not trust in them . Waiting for Yellen for sure

  35. Does anybody see short on Dow or it is just a sideways?
    Took cheeky 12 points on the drop.

    1. Pushing pushing. It’s all time high and it’s still pushing. How don’t they get scared to buy at these level? It am not going long at these levels personally. FTSE is actually quite below it’s high, don’t understand why.

      1. Hi, (first ever post by the way)
        Pretty strange afternoon on the DAX-doesn’t seem to know how to react when Dow hits new highs. I got shafted by the Yellen thing too.
        Might be about to drop through 9710 I think

  39. Looks like a reversal for this short rally. dow made a top today may be for this month. anyone with me?

  40. Think that’s it Senu
    Greed again got the better of me even so bagged 40 points on Dow.
    Yellen wore black catsuit today

  41. DOW still above 17000. Nothing new. FTSE did not break the downward channel this time at 1st chance…instead, bounce off. This morning I have to say that was surprised to see at 6750-6760. Because of that, I placed my trail stop at 6745.
    Tomorrow is another day and it can try again to break…but FTSE still weak

  42. Yes PMS that was me. For 4 or 5 months it actually worked…..but since DOW found renewed energy and FTSE been stuck in a range..albeit a widening range.
    Don’t see it turning now.

    1. Hi Javed… what you mean by “that was me” ?
      Don’t see it turning now… to where ?… down or up ?

  43. I was the one who said the FTSE will outperform the Dow…..either go up more or fall less.
    For several months this year that pattern held….but now it has reversed. I don’t see the FTSE outpwrforming for the remaindee of the year. One thing to fact in those is the appreciation of Sterling. I don’t momitor or trade the spread and don’t have my bloomie anymore so can’t say whether that trade would still in the money but doubt it.

  45. Long signal for FTSE with pin bar and higher low……Will see in the morning but have a long bias.

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