6520, 6515, 6500 Support, 6545, 6559, 6615 Resistance

Good morning. Having bottomed out at 6425 on Thursday things are looking a bit more positive now and we should be on for a more positive week with a bullish end to October. Still think around 6750 is possible for the month end, though the FTSE will need to break through that 25ema on daily, currently at 6669. Before that the top of the 10 day Bianca channel is 6559 – initial resistance for today. Fairly quiet on the financial news front over the weekend, with Asia climbing overnight as protestors started talks with the government.

Asia Overnight from Bloomberg
Asian stocks rose, rebounding from a six-day slide in the regional index, while Hong Kong shares climbed as protesters began talks with the government. The dollar was near a four-year high after American payrolls data and gold slid to a 2014 low as platinum and palladium tumbled.

The MSCI Asia Pacific Index added 0.6 percent by 1:02 p.m. in Tokyo, as Japan’s Topix index jumped 1.5 percent after the yen’s biggest drop for 2014 on Oct. 3. The Hang Seng Index climbed 0.5 percent and Standard & Poor’s 500 Index futuresrose 0.3 percent. The greenback climbed against the Korean won and was at 109.61 versus the yen. Gold fell as much as 0.7 percent as platinum and palladium sank at least 1.4 percent.

U.S. employers added 248,000 workers to payrolls last month, exceeding the 215,000 increase predicted by economists as the jobless rate fell to a six-year low. Hong Kong student-protest leaders held preparatory talks with government officials as some barricades were removed, allowing civil servants to return to their offices. German factory-order data and reports on U.K. home prices and retail sales are due today.

“We’ve had good news from the U.S. which should place the market well,” Mark Konyn, chief executive officer of Cathay Conning Asset Management Ltd. in Hong Kong, said on Bloomberg TV. “It’s a critical week for the Hong Kong protests. For the rest of the year, we’re going to see more volatility, particularly around the currency markets triggered by the weaker yen and what’s going on in the dollar.”

About the same number of stocks rose as fell today on the Hang Seng Index, which dropped 2.6 percent last week, the most since March. A gauge of Chinese companies listed in the city swung between a gain of 0.6 percent and a loss of 0.5 percent. Mainland venues, closed since Oct. 1 for national holidays, reopen on Oct. 8.

While demonstrator numbers faded from the tens of thousands that gathered over the weekend, many of the barriers that have shut shops, closed schools and hindered commuters haven’t been cleared. Chief Executive Leung Chun-ying told protesters in a televised speech on Oct. 4 that authorities would take “any necessary action” to restore order, and opening access to the government complex by today was “the most immediate thing.”

The Kospi index slipped 0.1 percent in Seoul, resuming trading after a holiday Oct. 3. The highest-ranking North and South Korean security advisers met for the first time at the weekend, agreeing to push for improved relations between the two countries.

Topix Gain
The S&P/ASX 200 Index fell 0.5 percent, with New South Wales state, where Australia’s main bourse is located, observing a public holiday. Markets in India, Malaysia, the Philippines and Singapore are closed today, to resume tomorrow.

Japan’s Topix is rebounding after capping its first weekly retreat since August. Exporters provided the biggest boost, with Toyota Motor Corp. adding 2.2 percent, after the yen slumped 1.2 percent on Oct. 3 versus the U.S. dollar after the unemployment rate in the world’s biggest economy dropped to the lowest since July 2008.

Payrolls Data
The Fed, which is on track to end its stimulatory bond buying program this month, has said key borrowing costs will be kept low for a “considerable time” after purchases end, though any move will depend on the strength of the economy.

The increase in nonfarm payrolls for August was revised up to 180,000, the U.S. Labor Department said Oct. 3. The unemployment rate fell to 5.9 percent from 6.1 percent in August. Average hourly earnings failed to grow in September from a month before, the data showed.

“Strong U.S. jobs data suggests the U.S. economy is recovering faster than the Federal Reservehas anticipated,” David Croy, head of markets research in Wellington at ANZ Bank New Zealand Ltd., wrote in a client note today. “Wages growth remains disappointing and that will play into Fed Chair Yellen’s dovish hands, but the pendulum in favor of normalization is swinging toward action.”

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Todays pivot is 6505 so there is support there, though the IG pivot is slightly higher at 6514. With a cluster of supports at that level, as well at 6520 I think that might offer up initial support after a dip of 6545 to start the day. Above that we have the top of the 10 day Bianca channel at 6559, with 6615 above that where we have the top of the 30 minute channel. For today I am in a buy the dips mood, with that 6515 area looking a good long spot, with a stop just below 6500. If 6500 were to break then 6470 and 6440 are likely supports, the latter being the bottom of a PRT channel that has appeared but we are not currently within.

So, I think after an initial dip from 6545 we will see some bulls come back in, as the bounce from the lows last week starts to get some momentum. The only slight concern is that despite the rises on Friday, the 30 minute EMA lines are still pretty close, so a cross back to bearishness would be quite easily done. This afternoon a lot will depend on the US and the S&P – its nearing the 25ema on daily at 1979 – if the bulls can break that it should take the FTSE to that 6615, whereas a drop back will see us testing the lower supports at 6470, is the S&P drops to 1961.