Good morning. Great bounce off the 6060 level on Monday that is still going and looks like its on for the 6300 level mentioned yesterday. As you know I am away this week so slightly shorter email that usual. Interesting how looking at the charts on Saturday it was really only the long at 6060 that stood out. Might do the email for Monday on a Saturday more often! The initial dip on Sunday night that saw the FTSE dip to 6000 was short lived and as per usual after the shock the markets rise.
US & Asia Overnight from Bloomberg
Asian stocks rose from an almost six-week low, following gains in U.S. and European shares, as a weakening yen boosted Japanese equities and concern eased from the attacks in Paris.
The MSCI Asia Pacific Index added 0.6 percent to 131.31 as of 9:00 a.m. in Tokyo after closing Monday at the lowest since Oct. 6. Shares rallied during the European and U.S. sessions, with the Standard & Poor’s 500 Index jumping 1.5 percent and the Stoxx Europe 600 Index climbing 0.3 percent. The history of terror incidents around the world over the last 15 years shows market reactions are often sharp and short-lived. “Good gains in overnight U.S. markets should wash across” into Asia, said Tony Farnham, a strategist at Patersons Securities Ltd. in Sydney. “Initial cautiousness has quickly dissipated.”
The Asia-Pacific gauge remains 4.7 percent lower this year and may post its first back-to-back annual declines since 2002 as investors assess the extent of China’s economic slowdown amid preparations by the Federal Reserve to raise interest rates as early as next month.
It’s been more than 10 years since Europe experienced terror attacks of comparable scope to those in Paris. Past incidents, such as bombings that killed 191 people on Madrid commuter trains in March 2004 and left more than 50 dead in London in July 2005, spurred selloffs in equities that were erased days or weeks later.
Unfortunate Precedent
“What we have learned is that there is not a meaningful market impact from such attacks,” Anastasia Amoroso, a New York-based global market strategist at JPMorgan Asset Management, told Bloomberg TV. “So because we have this unfortunate precedent, that’s why the market is looking past this.”
Japan’s Topix index advanced 1.2 percent after the yen slid 0.5 percent against the dollar on Monday. South Korea’s Kospi index added 1.3 percent. Australia’s S&P/ASX 200 Index rose 0.9 percent and New Zealand’s S&P/NZX 50 Index gained 0.3 percent.
E-mini futures on the Standard & Poor’s 500 Index slid 0.1 percent. Contracts on the FTSE China A50 Index rose 0.8 percent in most recent trading, while those on the Hang Seng China Enterprises Index of mainland shares in Hong Kong added 0.2 percent. [Bloomberg]
FTSE Outlook and Prediction
We are encountering a bit of resistance on the 10minute chart at the 6245 area, so I think we may get an initial dip from here first this for today, as profit is banked after that rise yesterday. We have posed above the daily Bianca channels, and also the 10 day Raff so a little bit of a dip is to be expected. If the bulls break the 6245 are then the next areas of note are 6285 and then the 6303 area. We have a 6.4 divi tomorrow so not a particularly large one for buyers to hold for though divi has more relevance for tomorrows session).