Prediction – Support 6991, 6983, 6968, 6903, 6873, 6853 Resistance 7033, 7051, 7078, 7154

Good morning. Fairly flat day yesterday while everyone waited for the FOMC minutes, which in the end revealed nothing unexpected, with Fed policy makers concluding that the first-quarter slowdown in the U.S. economy was unlikely to persist. While “many” officials signaled a June liftoff would be unlikely, a “few” members said they anticipated the economy would be ready by then for the first rate increase since 2006. Another day another bank fine, Barclays again this time for forex rigging, with the biggest fine in UK history. Overall it was a fairly flat day on the market, we followed the arrows which was good though unfortunately went a little bit lower than the stop level on the long before bouncing back to a high of 7020. The S&P stopped just short of that 2140 yet again, 2135 this time and has shed 15 since. Maybe 2136 is it?!

US & Asia Overnight from Bloomberg
Asian stocks maintained gains as a preliminary Chinese factory gauge missed estimates, reinforcing the need for further government stimulus. U.S. equity-index futures retreated and the dollar was weaker against most peers after a three-day rally.

The MSCI Asia Pacific Index added 0.3 percent by 11:48 a.m. in Tokyo, as the Hang Seng China Enterprises Index traded little changed after dropping as much as 0.8 percent immediately after the China data. Shares in Shanghai and Shenzhen advanced. Standard & Poor’s 500 Index futures slipped 0.2 percent. The dollar weakened 0.3 percent versus the euro and 0.2 percent against Japan’s yen. Oil in New York swung to a gain of 0.3 percent.

An early reading of HSBC Holdings Plc and Markit Economics’ May China factory gauge came in at 49.1, missing the 49.3 estimate of economists and below the 50 level that marks the threshold for expansion. Federal Reserve Chair Janet Yellen gives a speech Friday on the economic outlook after minutes from the central bank’s last meeting reinforced the message that borrowing costs could rise at any meeting. European leaders meet to discuss Greece’s debt situation.

“The worse the data, the more speculation that more monetary stimulus will be coming,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “The market has a consensus that the economy won’t pick up any time soon so the impact of the economic data isn’t too big.”

Preliminary manufacturing gauges for the euro area and the U.S. also due Thursday after a similar measure for Japan showed a quicker-than-estimated expansion.

Hang Seng
The Hang Seng Index was little changed after falling as much as 0.7 percent and the gauge of Chinese companies listed in Hong Kong was lower for the first time in three days. The Shanghai Composite Index added 0.8 percent after gaining 3.8 percent in the previous two days.

Goldin Properties Holdings Ltd., the builder of a luxury polo-themed estate near China’s Tianjin city, plunged 50 percent in Hong Kong, while affiliated Goldin Financial Holdings Ltd. tumbled 48 percent. The companies, controlled by billionaire Pan Sutong, had both surged more than 300 percent this year through yesterday.

The drops follow Wednesday’s suspension of Hanergy Thin Film Power Group Ltd. after its stock plunged 47 percent, wiping out $19 billion in market value, as its chairman failed to appear at the annual general meeting.

BHP Billiton
Australia’s S&P/ASX 200 Index rose 0.8 percent after slipping Wednesday to its lowest close since the end of January. BHP Billiton Ltd., the world’s largest miner climbed 1.6 percent after a three-day slide following a spin-off. The Kospi index in Seoul fell 0.7 percent.

Fed policy makers concluded that the first-quarter slowdown in the U.S. economy was unlikely to persist, the minutes showed. While “many” officials signaled a June liftoff would be unlikely, a “few” members said they anticipated the economy would be ready by then for the first rate increase since 2006.

Futures on the Dow Jones Industrial Average and the Nasdaq 100 Index also declined.

The Bloomberg Dollar Spot Index, a gauge of the currency versus 10 major peers, was down 0.1 percent Thursday, after rallying almost 2 percent through the past three days. The yen strengthened to 121.13 per dollar, while the ringgit snapped a three-day drop to climb 0.5 percent.

The euro climbed to $1.1124 after touching a three-week low Wednesday. Australia’s dollar gained 0.2 percent and the Swiss franc advanced 0.4 percent.

Emergency Funds
European Union leaders are due to meet with Greek Prime Minister Alexis Tsipras in Latvia’s capital Riga, amid continued wrangling over the indebted nation’s bailout.

The European Central Bank’s Governing Council consented at a meeting in Frankfurt on Wednesday to a 200 million-euro ($222 million) increase in emergency funding for Greek banks, people familiar with the discussion said.

July futures on West Texas Intermediate crude climbed 0.3 percent to $59.18 a barrel in New York after rising 1.7 percent on Wednesday, the most since May 12. Brent added 0.4 percent to $65.28 a barrel in London.

U.S. crude inventories shrank by 2.67 million barrels through May 15, the Energy Information Administration reported Wednesday. Prices may fall further as drillers become more efficient and the Organization of Petroleum Exporting Countries refrains from cutting output, according to Deutsche Bank AG. [Ref]

FTSE Outlook & Prediction

FTSE 100 Prediction
FTSE 100 Prediction

Todays pivot is 6991 and we have held above 7000 overnight, despite the S&P slipping back from its high yesterday at 2135. I think therefore that there is still a bit of bull left in the tanks, and we will test the top of the Bianca channels soon. 7051 is the top of the 20 day now, though we do have the top of the 10 day at 7078 and the 10 day Raff at 7072, so maybe a little bit higher yet. Below the pivot then the support levels to watch are the 200ema on the 30min at 6983 then the bottom of the 30min channel at 6968. Below that I would expect the bears to gain some strength for a trip to 6900. Question is of course is the S&P done now at 2136 on Tuesday and 2135 yesterday with a slightly lower high and the worm is turning? Technically its still bullish looking at the daily EMAs, and the FTSE ones are just starting to cross back to bull which is why I think we might still get a bit of a spurt up to 7070. Resistance is initially at 7030 then 7045 for the top of that 30min channel (and near enough the 20 day Raff) so worth a short around this level. If the bulls break 7045 then 7070 looks more than likely and maybe a swing short spot. Generally feeling a bit bullish still.