FTSE 100 Support 6309 6226 6200 6173 6115
FTSE 100 Resistance 6366 6392 6410 6415 6456 6507

Good morning. Well thats a bit of a surprise, we are back above Pre Brexit levels and had another trending day yesterday to push us up to nearly 6400. There was a lot of buying just at the bell yesterday also, so there is obviously some confidence around, probably helped by sterling’s current rate boosting FTSE 100 companies profits. After the S&P cut the UK rating from AAA, they also said that debt coming due over the next 12 months is 755pc of Britain’s external receipts and large sums have to be rolled over continuously. This is the highest for all 131 rated states, thanks to London’s role as a global financial hub (from here). So, we may well just be in the eye of the storm and still need to be cautious!

US & Asia Overnight from Bloomberg

• U.K.’s FTSE 100 has recovered all its post-referendum losses
• Crude jumped almost 8 percent over the last two days

Financial markets continued to recover from the panic-selling triggered by last week’s U.K. vote to leave the European Union, with Asian stocks rallying and South Korea’s won strengthening.

The MSCI Asia Pacific Index rose for the third day this week, building on the steepest two-day gain in global equities since August. Sterling was little changed versus the euro after EU leaders said they wanted Britain’s withdrawal from the bloc to be orderly. The won and Malaysia’s ringgit both climbed for a third day and were the best performers among 31 major currencies. Crude oil retreated, after touching $50 a barrel on Wednesday as data showed a drop in U.S. stockpiles. Gold also declined as demand for haven assets moderated.

Central bank efforts to contain the fallout from the Brexit decision are proving effective, with global equities having recouped over the last two days more than half of the almost $4 trillion of market value wiped out over Friday and Monday. The U.K.’s FTSE 100 Index has recovered all of its losses since the vote, as has a Bloomberg gauge of global commodities.

“The initial shock over the U.K. voting out of the EU is easing across the world,” said Mitsushige Akino, a Tokyo-based executive officer at Ichiyoshi Asset Management Co. “We’ve survived the event-related risk, and investors are beginning to see that the impact on the actual economy is limited. There’s hope for policy measures globally, not just in Japan, so that’s supporting markets.”

Federal Reserve Bank of St. Louis President James Bullard is due to speak Thursday in London and may shed light on the U.S. interest-rate outlook after futures indicated the next increase is unlikely to come before 2018, having at the start of this month priced in a 53 percent chance of a move by July. Taiwan’s central bank is forecast to cut its benchmark rate at a monetary policy review, while Mexico’s is seen raising borrowing costs, Bloomberg surveys show. Economic data scheduled for release include euro-area inflation, German unemployment and U.S. weekly jobless claims.

Stocks

The MSCI Asia Pacific Index climbed 1.1 percent as of 1:02 p.m. Tokyo time, rising to within 1 percent of where it closed on July 23, the day of the U.K.’s referendum. The measure plunged 3.7 percent on July 24 as the vote’s outcome was announced.

Benchmark stock indexes advanced across most of the region, with gauges in Australia, Hong Kong and Singapore all rallying more than 1 percent. Singapore Exchange Ltd. gained as much as 4 percent after UBS AG raised its stance on the stock to neutral. AU Optronics Corp. climbed more than 6 percent in Taipei, buoyed by an upgrade in Credit Suisse Group AG’s recommendation on the stock.

Futures on the S&P 500 were little changed following a 1.7 percent surge in the index on Wednesday. Contracts on the FTSE 100 added 0.4 percent.

Currencies

The pound weakened 0.2 percent to $1.3402, after rebounding 1.5 percent over the last two days. The currency is on track for a 6.6 percent loss this quarter, its worst performance since 2008. Against the euro, the U.K. currency was little changed.

The MSCI Emerging Markets Currency Index gained for a third day, rising to within 0.4 percent of its pre-Brexit close. The won strengthened 0.6 percent versus the dollar as data showed factory output increased in May by more than economists expected. The ringgit advanced 0.5 percent as this week’s pickup in crude prices brightened prospects for Malaysia, Asia’s only net oil exporter.
“I’m looking at the rebound in risk and the firming in oil prices and those factors are very supportive,” said Stephen Innes, a senior trader at Oanda Asia Pacific Pte Ltd. in Singapore. “The global central bankers are in the background and the markets realize that the central bankers are going to stand in front of any capitulation.”

Both the Bank of England and the European Central Bank stressed the availability of liquidity within hours of the referendum’s results. The Swiss National Bank intervened in the foreign-exchange market to contain volatility following the vote, while Bank of Japan Chief Haruhiko Kuroda said Wednesday that more funds can be injected into the market should they be needed.

The yen, which soared beyond 100 per dollar as the Brexit referendum results landed on June 24, was little changed Thursday at 102.80. It’s jumped more than 9 percent this quarter, set for its biggest gain since 2008.

Commodities

Crude oil fell 0.9 percent to $49.42 a barrel in New York, after jumping by almost 8 percent over the last two sessions as data showed U.S. stockpiles are declining. Goldman Sachs Group Inc. said the price may slip below its $50 forecast in the second half of 2016 because of a ceasefire between militants and the government in OPEC member Nigeria.

Gold fell 0.3 percent, trimming its post-Brexit surge to 4.6 percent. Copper and nickel gained at least 0.3 percent in London.
Steel prices rose in Shanghai, with rebar gaining as much as 4.1 percent, after China’s State Council approved a rail network expansion plan that will support demand for the metal.

Corn in Chicago climbed 0.9 percent before the U.S. Department of Agriculture updates its quarterly reserve estimates on Thursday. U.S. corn inventories as of June 1 probably rose to a 28-year high for the date, while soybean stockpiles jumped 33 percent to the most for the second quarter since 2007, according to analysts surveyed by Bloomberg. Wheat supplies probably advanced 31 percent to the highest since 1988 for the date.

Bonds

U.S. Treasuries due in a decade were little changed and yielded 1.51 percent. Similar-maturity Japanese notes yielded minus 0.23 percent, near to the record low of minus 0.24 percent recorded on Wednesday.

The cost to insure Asian corporate bonds against non-payment fell for a third day, with the Markit iTraxx Asia index of credit-default swaps declining three basis points to 138 in early Hong Kong trading, according to Nomura Holdings Inc. pricing. [Bloomberg]

FTSE 100 Outlook and Prediction

I’m not ruling out a rise to the top of the 20 day Bianca at 6410 today, and we also have a major PRT resistance level at 6415, so if we do get this high its another level that worth a short from. Admittedly the shorts yesterday didn’t work too well though. I don’t think that the rise is going to continue indefinitely, and its probably an exercise in convincing the masses that the economy isn’t going to tank just because we are leaving the EU. Nothing is really going to change for a couple of years anyway while everything is sorted out. It also seems that everyone is willing to trade with the UK (why wouldn’t they?) and New Zealand have even offered their negotiators.

For today, we have the pivot at 6310 for support, and looking at the big picture on the 2 hour chart, I would quite like a drop to 6175ish to test the Hull moving average before another leg up. I think we will have a pull back soon, just a bit confusing as to where from, before another leg higher. Certainly keeping us all on our toes at the moment! The 30min chart has been bullish for a while now, so am watching to see if that shows a short signal today (which may coincide with a drop from the 6400ish area). My 10min chart has showed some sell signals, but they haven’t gained much traction as the momentum is quite strongly bullish at the moment. So, still tricky, watching the 6410 area today to see what happens there and trying a short from there.