Good morning. Nice short yesterday that did take a while to get going but delivered in the end. Even got a little bounce off the pivot as well. Turned a bit more bearish later on, but overnight has bounced back – though the S&P has stayed daily static the whole time, dropping off that 2007 level but only as far as 2003 this morning. Does look like its being supported but could easily put a trip in to 1980 by mid September, though 2006 is resistance again today. FTSE has 6869 and looks like we could get a rise and dip scenario today.
Asia Overnight from Bloomberg
Asian stocks climbed, the yen touched an almost eight-month low and bonds in the region tracked Treasuries lower amid signs of strength in the U.S. economy. Chinese shares jumped after gauges of services activity rebounded, while crude oil rallied.
The MSCI Asia Pacific Index rose 0.5 percent by 2:04 p.m. in Tokyo, asHong Kong’s Hang Seng Indexadvanced 1.5 percent. Standard & Poor’s 500 Index futures were little changed after the benchmark U.S. index slipped 0.1 percent from a record. The yen fluctuated after falling to as low as 105.31 per dollar, boosting Japanese shares. Yields on 10-year Australian debt added nine basis points. Oil in New York rebounded 0.3 percent and gold climbed from the lowest level since June.
U.S. factory output grew in August at the fastest pace in three years, underlining the economy’s divergence with Europe and China, where gauges of manufacturing this week dropped more than analysts projected. A private gauge of non-manufacturing activity in China jumped the most on record after its lowest-ever reading last month. Japan and the euro area see service-industry data today, before the European Central Bank and the Bank of Japan update monetary policy tomorrow amid speculation over the outlook for stimulus.
“A strong U.S. economy is good for Asia, particularly the exporters,” Timothy Radford, a strategist at Rivkin Securities in Sydney, said by phone. “The rally in Japanese equities can be sustained as the the yen continues to weaken. There are still concerns about the Chinese economy. If we do see further weakness, we’d expect the government to implement more stimulus.”
The Hang Seng Index climbed back above 25,000 and a measure of Chinese companies listed in the city advanced 2.1 percent. The Shanghai Composite Index added 0.6 percent and is heading for its highestclose since June last year.
An official non-manufacturing purchasing managers’ index for China’s services sector rose to 54.4 for August today, from 54.2 in July, while a similar gauge from HSBC Holdings Plc and Markit Economics jumped to 54.1 from 50. Factory gauges released Sept. 1 indicated Chinese manufacturing growth is slowing.
The U.S. manufacturing data bolstered speculation that the Fed may bring forward its timeline for higher U.S. interest rates. Reports last week showed U.S. GDP expanded more than previously forecast in the second quarter, propelled by the biggest gain in business investment in more than two years. A Labor Department report Sept. 5 will show the number of workers added to payrolls rose by more than 200,000 in August for a seventh straight month, according to a Bloomberg survey of economists.
Russia, engaged in a conflict with Ukraine over its support for separatists in the former Soviet republic’s east, is the world’s No. 1 producer of palladium and the biggest energy exporter globally.
U.S. President Barack Obama is heading to eastern Europe to reassure NATO members of their security amid criticism from Russia over the U.S. approach to the tensions in Ukraine. Russian Foreign Minister Sergei Lavrov said Ukraine’s allies were stoking the five-month-old tussle and should back peace talks, while President Vladimir Putin sought to quell concern over remarks that his army could “take Kiev” in a matter of weeks. Ukraine has been strengthening its defenses.
Todays pivot is 6830 and with the overnight rise I think we will see slightly more bullish start. We have significant resistance at the 6860/6869 area for today as we have the top of the 30 minute channel there and also the top of the 10 day Bianca, the 20 day Raff and and the 10 day Raff at 6871. As such that area looks a good shorting spot. Initially the bulls will need to break through 6837 to push to 6857 and then the 6867 area, though if the pivot breaks the next support is 6811 – the bottom of the 10 day Raff. If 6810 breaks then we could be heading lower quite quickly, 6750 is possibly later this week.