Good morning. Well that was a great rise yesterday with the 6658 long, which has actually continued again this morning to 6743 (where we have resistance from the 200ema on 30min) as the French Economic Minster has said that Greece has to stay in the Eurozone. “Stocks will recover once people refocus on improving fundamentals without distractions fogging up the picture,” said Michael Woischneck, an equity manager at Lampe Asset Management GmbH in Dusseldorf, Germany. He helps oversee about $7 billion. “We can contain any fallout from Greece, especially for Spain, Ireland and Portugal.” We also have all eyes on the Fed later for clues about interest rates.
Fed Meeting
Investors are also watching for cues on the timing of a U.S. rate increase, with Federal Reserve officials ending a two-day meeting today, and news out at 7pm this evening. While policy makers are expected to leave rates unchanged this month, some improving economic reports have stoked concern the Fed will go ahead with raising them later this year. A release yesterday showed housing starts in May capped the best back-to-back readings since 2007.
US & Asia Overnight from Bloomberg
Asian stocks rose for the first time in three days, following U.S. shares higher, as investors awaited a Federal Reserve decision on U.S. monetary policy.
The MSCI Asia Pacific Index gained 0.2 percent to 146.63 as of 9:02 a.m. in Tokyo. The measure slipped 1.2 percent in the previous two days as European policy makers urged Greece to make the concessions needed to unlock bailout aid ahead of Thursday’s meeting of euro-area finance ministers.
The Fed concludes its two-day policy meeting Wednesday, amid speculation mixed U.S. economic data and the deadlock over Greece may complicate the central bank’s drive to increase interest rates. Greece’s prime minister accused the International Monetary Fund of “criminal” responsibility for the indebted nation’s situation.
“Yellen is unlikely to come across as overly hawkish given the Greek situation,” said Shane Oliver, the head of investment strategy at AMP Capital Investors Ltd. in Sydney, which manages about $124 billion. “The markets had become a bit oversold. The bull market is still alive and well.”
Japan’s Topix index added 0.3 percent. South Korea’s Kospi index rose 0.2 percent. Australia’s S&P/ASX 200 Index gained 0.3 percent and New Zealand’s NZX 50 Index slid 0.1 percent.
Futures on the Hang Seng Index rose 0.3 percent in most recent trading, while contracts on the Hang Seng China Enterprises Index gained 0.4 percent.
E-mini futures on the Standard & Poor’s 500 Index were little changed after the underlying gauge advanced 0.6 percent on Tuesday.
The Fed meets as data continue to show uneven gains in the U.S. economy after a first-quarter slowdown. Traders are now putting odds of a September rate hike at 47 percent, down from 53 percent as recently as Friday, data compiled by Bloomberg show. Fed Chair Janet Yellen may provide further clues at a press conference Wednesday. [Ref]
FTSE Outlook
For the moment I am inclined to be bullish. We have had a decent bounce off the 6658 yesterday which was the bottom of the 20 day channel, and the 30min era’s are still bullish. I have gone for a dip from this 6743 area which hit just as I started the analysis, as that is the 200ema on the 30min, with a dip down to the pivot at 6703. This area looks a good entry for a long as we also have the T3 coral line there to act as support and will be the first touch since the trend turned to green on that. Ideally we will get another decent rise, and a target area would be 6799, where we have the top of the 10 day Bianca. Will take a lot of good news I think for a +100 day today but you never know with Greece rumbling on and the Fed later. The bulls market is alive and well (despite everyone panicking on Monday! The daily RSI is still only at 31 after that rise yesterday so there is still potential for a decent rise.
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