6785 support; 6820 resistance

Good morning. Well it got 6804 in the end but it took all day, so we were right to be bullish from that 6750 area. Having hit the 6804, the short order took but it hasn’t dropped much since – showing a bit of strength once again. 6821 is the main resistance for today and if the bulls break that then 6900 and higher beckons. Will they get that 7000 soon? The US also gained well but dropped back from its all time highs, and we have Independence day holiday on Friday, and usually get some bull around that period, though with NFP on Thursday it could be interesting!

Asia Overnight from Bloomberg
Asian stocks climbed, with the regional index at a six-year high, and credit risk in the region fell as expanding manufacturing in the largest economies buoys the global outlook.Australia’s dollar dropped after worse-than-estimated trade data, while platinum and copper slid.

The MSCI Asia Pacific Index rose 0.6 percent by 2:16 p.m. in Tokyo, trading at the highest level since June 10, 2008, as most major regional indexes gained. Standard & Poor’s 500 Index futures were little changed after the measure surged to a record. A gauge of Asian credit-default swaps prices fell 2 basis points, the most since June 19. The Aussie lost 0.4 percent. Platinum snapped a three-day rally, sliding 0.6 percent. Copper fell 0.5 percent after touching the highest price since March.

Data yesterday showed Chinese manufacturing grew at the fastest pace this year in June, factory output in the U.K. unexpectedly strengthened, and U.S. activity held near a five-month high, fueling speculation the economy can bear higher interest rates from next year. Australia’s trade deficit was A$1.91 billion ($1.81 billion), more than nine times wider than the A$200 million shortfall estimated by economists. Private figures on U.S. payrolls are due today, before the government’s monthly report tomorrow.

“Economic conditions continue to look reasonably favorable and the U.S. continues to recover,”Angus Gluskie, who helps oversee more than $550 million at White Funds Management in Sydney, said by phone. “People view the market broadly favorably.”

Global Record
MSCI’s All-Country World Index advanced 0.6 percent to a record 431.26 last session, and was 0.1 percent higher today. The measure added 1.7 percent in June for a fifth straight monthly gain.

The S&P 500 climbed 0.7 percent last session to a record 1,973.32, while the Dow added 0.8 percent, touching levels within two points of 17,000 during the day.
The Institute for Supply Management’s U.S. manufacturing index came in at 55.3 for last month, little changed from a five-month high of 55.4 reached in May. Readings greater than 50 indicate expansion.

Yields on 10-year U.S. Treasuries were little changed at 2.57 percent after rising for the second time in three trading days in New York, adding three basis points, or 0.03 percentage point.

U.S. Jobs
Yesterday’s decline extended the first monthly drop in the notes since March, amid speculation U.S. growth is resilient enough to withstand increases to the Federal Reserve’s main interest rates, currently near zero. BlackRock Inc., the world’s biggest money manager, forecast the first increase in borrowing costs for the second quarter of 2015.

Today’s ADP National Employment Report may offer investors more clues on the health of the world’s biggest economy. The group may say nonfarm payrolls in the U.S. rose by 205,000 in June, after gaining 179,000 in May, according to economists surveyed by Bloomberg. The official data is due tomorrow, with U.S. markets closed for the Independence Day holiday July 4.

FTSE Outlook

FTSE 100 Forecast
FTSE 100 Forecast

A great rise yesterday to the top of the daily channels at 6804ish, so think we can safely say that 6750 held as support! Didn’t quite dip to the long order level, instead bouncing from 6753. We haven’t had much of a dip off the 6804 level, only going as far at 6792 so the resistance levels today, while still close, might get broken. They are at 6806, 6815 and 6821. If they were to be broken then I feel we will be testing 6900 shortly. ADP jobs data later might scupper the bulls (for a while anyway!) and give us a clue for the Non Farm Payrolls tomorrow (US closed Friday).

The Bianca channel tops are still around the 6810 area, while the Raffs are 6820, so there are still some significant levels for the bulls to break just yet. Todays pivot is 6784, so we are likely to get some support there initially, if we do dip at the open. Below that 6750 is still the major support, if that were to break then it will seriously dampen the bulls chances of 6900+.

I’m not as bullish today as i think 6821 will hold as resistance if it gets that high, though I have plotted the arrows to only go as high as the 6810/15 area before some profit taking. There is a pretty decent 30 minute channel on the chart, with levels that tally with other resistance and support so I think we will remain within that today (famous last words maybe if it breaks out at 8:01…)

81 Comments

  1. Taken a nice short on the dow from 95 to 65…didn’t see it going lower with ftse and dax seeming so strong today. After losing a lot on my short on the ftse yesterday that win on the dow was welcome. Now looking for an entry on either of the 3 indicies

  4. Don’t really get the FTSE’s direction at the moment — 5 mins. tending down perhaps.

  7. Uh oh, I was hoping the market would continue to rise. I place a bet @ 4/1 that the market would finish higher than 6840

  10. Senu yes still short stop at 6827 ready if double top does not materialise fingers crossed 6824 will hold

  13. We may have a negative reversal forming in the 4hr. Need the close at 12:00 to confirm, less than half an hour. Higher RSI and Lower Price. 6841 Last high…let’s see the higher at 12:00

          1. Seeing a slight drop now so I think you’re right, I don’t think we’ll see 6725 even again today

  14. as nick says if 6821 broken we will get to see 6900 soon..can anyone suggest me where is the next resistence level?

  15. Jim, if we get anywhere near 6840 I can cash out anytime before the close time 4.30

    Where did you get that chart?

    1. Agreed ftse is pretty slow, I’m just not watching it until 4.30 now. If it hits my stop loss it hits my stop loss

  25. Any more indications on what you think the end price may be? I had bet on it to finish higher than 6840 this morning. I can cash out now for no loss if I want, just unsure whether will will actually reach that level

  28. ADP figure came 281k against 200k estimation…plus yellen speaks at 4pm BST. today dow surely will hit 17000 and more!

  32. Hi Chaps – There is the option of just sitting on the sidelines as the US gets ready to party (4th July). These holiday periods can create weird dynamics.

  33. good one Senu. Hope this drops heavy below 6700 next days. Want to buy dips, that’s my speciality in this secular markets

    1. It’s never enough if you are in the wrong side or earlier entry. For instance my 12 points stop loss never got hit but decided to exit with residual gain.

      Note : Senu “book guy” you are the 10 point guy

        1. hope you “booked”. Will not be today, this wants to go down. Looking now to 6840-6850 for the reverse

  46. anyone long in DOW ? 17000 is a magnetic price. Could break tomorrow before the JUL4 ?

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