Good morning. The markets are very thin at the moment with small volumes creating quite big moves in prices. This may explain some of the big moves yesterday with financials and some house builders moving sharply higher while commodity price concerns kept commodity related shares (including gold related shares) to the downside. It’s probably quite a dangerous time to trade as things can quickly move against you – also direction can change on a sixpence with volatility being high. Whether 6320 (a key trend channel level) will be breached to the upside convincingly by the end of 2015 is unclear but it is a level to perhaps focus on.
US & Asia Overnight from Bloomberg
Asian stocks advanced, paring the regional measure’s annual retreat, as financial and technology shares gained following an equities rally in the U.S. and Europe.
The MSCI Asia Pacific Index added 0.4 percent to 132.31 as of 10:20 a.m. in Tokyo. About two stocks gained for each that slid on light volume across the region. Australia’s S&P/ASX 200 Index rose for a ninth straight day, heading for the longest winning streak since February.
The Asian equity gauge is poised for a 4.1 percent drop for the year, led by Singapore’s Noble Group Ltd. and Macau gaming companies. After outperforming global shares in the first six months of the year, Asian equities slid in the second half as China’s surprise yuan devaluation and concern about the Federal Reserve’s interest-rate outlook curbed investor appetite for the region’s stocks. The measure has steadied in December, poised for a 0.4 percent gain.
“Today will be about looking favorably at the global moves yesterday, and relief that it looks like we’ll be able to end the year on a positive note,” said Chihiro Ohta, general manager of investment information at SMBC Nikko Securities Inc. in Tokyo. “We’ll keep on being moved by the oil price. We’ll have to keep being aware of this for the first three months or the first half of next year as well.”
Japan’s Topix index rose 0.5 percent on the measure’s last trading day of the year. South Korea’s Kospi index slipped 0.1 percent. Singapore’s Straits Times Index added 0.2 percent. Australia’s S&P/ASX 200 Index rallied 0.7 percent and New Zealand’s S&P/NZX 50 Index increased 0.5 percent.
In Hong Kong, futures on the Hang Seng Index added 0.2 percent in most recent trading, while contracts on the Hang Seng China Enterprises Index were little changed.
Toshiba Corp. jumped 6.1 percent in Tokyo. The maker of chips and home appliances is considering Fujifilm Holdings Corp. as one of the candidates to buy a stake in its medical equipment unit, Yomiuri newspaper reported, citing an unidentified person. Toshiba climbed on Tuesday as it sought $2.5 billion in credit line to pay for the cost of restructuring its businesses following an accounting scandal. Inpex Corp., an energy explorer, climbed 1.2 percent, while Australia’s Woodside Petroleum Ltd. advanced 1.1 percent in Sydney.
Futures on the Standard & Poor’s 500 Index increased 0.1 percent. The underlying U.S. equity gauge climbed 1.1 percent on Tuesday as West Texas Intermediate crude jumped 2.9 percent.
A decline by the MSCI Asia Pacific Index this year would be the measure’s first back-to-back yearly loss since 2002. Shares on the gauge trade at 13.9 times estimated earnings, compared with 17.7 times for the Standard & Poor’s 500 Index and 16.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg. [Bloomberg]
FTSE Outlook and Prediction
Looking at the chart for today I think we may get a dip and rise, with yesterdays 6320 being strong resistance for the moment, We have the top of the 20 day Bianca channel here and a small overnight dip from there so far. The daily RSI(10) is sitting on 64 at the moment so a little high, a pullback would therefore create a bit of a spring board for a push higher later today and tomorrow. We have support at the daily pivot at 6284, with 6245 below that looking like a decent spot for a long. There is a 30min channel as well, with weak support at 6265ish, and the 10min chart is currently suggesting a bit of a dip first thing. So, am still feeling weak bull for the moment, with just 2 more trading days to see how we close out the year.