6835, then 6841 resistance, 6809 support

Good morning. FTSE still holding up over the weekend and back to that 6838 resistance area from Friday. I ended up closing the rest of that short at 6821 so I wasn’t holding anything over the weekend. Most of the financial news was about cooling the housing market and when will rates go up, with David Miles the latest to say they need to rise, and as an MPC member likely to vote for that before he leaves in May. Iraq rumbles on though not quite front page news at the moment, hopefully things will calm down if only for the people of Iraq caught in the middle!

With the latest Bianca channels we are just testing the top of the 10 day at 6835 – if 6841 holds as resistance then we should get a little dip.

Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index extending a six-week gain, as a private report showed Chinese manufacturing unexpectedly expanded.

The MSCI Asia Pacific Index (MXAP) gained 0.4 percent to 145.23 as of 11:47 a.m. in Hong Kong. All but two of the 10 industry groups advanced while about five stocks rose for every four that fell.

“We’ve had a protracted period of sub-50 PMIs in China and I expect we are going to move into the period of plus-50 in the second half of this year, and that will be viewed fairly positively,” Tim Schroeders, a portfolio manager who helps oversee $1 billion in equities at Pengana Capital Ltd. in Melbourne, said by phone. “The platform is very solid for the acceleration of growth into the second half of this year against the backdrop of very accommodative policy globally.”

China Manufacturing
A HSBC Holdings Plc/Markit Ltd. preliminary index of factory activity for China was at 50.8 for June, exceeding the 49.7 median estimate of analysts surveyed by Bloomberg News and a final reading of 49.4 in May. Readings above 50 indicate expansion.

Premier Li Keqiang said last week China won’t have a hard landing and that his officials are making adjustments to aid expansion without resorting to “strong” stimulus.

Hong Kong’s Hang Seng Index and the Hang Seng China Enterprises Index of mainland shares traded in the city both gained 0.3 percent. The Shanghai Composite Index added less than 0.1 percent.

“The Chinese data is looking much better, definitely better than my expectation,” Pauline Dan, who helps oversee $153 billion as the Hong Kong-based head of greater China equities at Pictet Asset Management Ltd., said by phone. “The government is trying to maintain economic momentum, fine-tuning monetary policy to achieve the 7.5 percent growth target this year. Relative to the region, definitely Chinese stocks are looking attractive. We have been nibbling.”

Winning Streak
The Asia-Pacific gauge added 0.4 percent last week, to cap its longest run of weekly gains since August, as Federal Reserve Chair Janet Yellen said she expects U.S. interest rates will stay near zero for a “considerable time” after stimulatory bond buying ends. The measure rose 2.4 percent this year through June 20.

Futures on the Standard & Poor’s 500 Index added 0.2 percent today. The equity gauge rose 0.2 percent on June 20 as drugmakers rallied on merger activity and investors speculated economic growth will accelerate.

Investors are also watching geopolitical risks in Iraq and Ukraine. Gunmen fighting Iraqi forces seized more territory along the country’s borders with Jordan and Syria as U.S. President Barack Obama warned that advances by militants could spill over into neighboring countries.

Russian President Vladimir Putin expressed support for a cease-fire declared by his Ukrainian counterpart, calling for all sides to halt military activities even as he put more than 65,000 troops on combat alert.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Todays pivot is 6819, but with resistance at 6841 we have a pretty narrow band in play between support and resistance one of which is going to break this morning. Below the pivot we have fairly key support at 6809, a move below that will facilitate a decent sized drop and invalidate the rising potential. Above 6841, the next resistance is 6855 being the top of the 20 day Bianca, then 6887.

67 Comments

  1. Morning all, Marco are you still short? Held mine over the weekend and forgot about it till now. 🙂

  4. Why markets are in a such selling off, after the good economic news from China ?
    Is Iraq ?

  6. Could be France… that good trigger a sell-off. That’s an old story, that now could start a short-term panic

  7. Morning Belly, Pms
    Yes still holding my short too from last week first time I have felt confident it must go south although Friday played with my mind a bit.
    Looking for 6731

    1. good call. I too was looking to short but did not feel very confident. And even with good China data, the buy overnight was very soft, concern FTSE.

  9. It was awesome mate. Just at the airport waiting for the flight back now feel fairly worse for wear right now

  12. That’s the plan short has stops moved into profit. I’m going to get home have an afternoon nap then might catch the tail end later today

    1. It seems it has support. Now, that was unexpected. I was looking for 6770 as a good place to go long, but not betting on that, as FTSE is very weak.
      But bouncing from 6784, hummmm.

  14. ftse is heavily dependent on mining stocks.. almost all mining companies are rising..later of the day indice should bounce back and continue rising tomorrow!

  18. Whatever Nick put on the chart it’s finished right now. What for the rest of the day? For the US?

  20. Senu I have 2 shorts running now one from last week at 6816 and one from this morning at 6814

  22. The FTSE closed at 6809 on 1st of May I think. In almost 2 months and 40 sessions it has effectively done zilch……great for range trading….fill yer boots……dull as ditchwater for me…..haha.

    GLA

    2. Yes stick with it. I just saw something in daily chart , that I missed. 6830 is top. I missed, but I still have a hope in going short

  26. SPX need a more upside. My 1977 is placed, but I could move to 1974. FTSE lagging as usually will bounce little and may short if I miss SPX.
    Wait there Marco.

  27. Thanks for the support Pms I get worried when Jim sais the opposite of what I have going.

  28. SPX must continue it’s pace today to the upside, after a pause. Do not like this flat trades for more than a couple of days. It could revert just right here

  35. Yeah back home now. I see it’s not really done much since the open today. Just making sure the world in going to buy ftse in the next hour for divi ‘ s! !!! You still holding Marco?

    1. 1,2 point divi, does not seem a good appetizer for going long. Or is 12 point divi ?

  44. 6808 seems to be a figure it does not like going below and certainly can’t break below 6800. Be interesting how this plays out as I am working off the 4hr chart

      1. 6830 is for now the frontier. I do think we are going down. Who short 6820-6830 is well confortable

  46. Macd, momentum on 4hr all point for a drop so will be going to bed hoping it plays out tomorrow as like Friday today has been very frustrating…

    1. Hi Marco.
      I have been following your analysis and it has been pretty good as Nick’s. Can you please share some of your strategies. Thanks.

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