Support 6075 6060 6039 6032 6007
Resistance 6104 6120 6130 6188 6266
Good morning. A very volatile day but within quite a tight range (during the session) showing quite a struggle between bulls and bears. Having opened above 6150 the FT100 fell back and tested the 6100 area before moving up throughout the afternoon to hit 6175. This appeared to look like the start of a nice rally for the next few days however prices dropped sharply very near the close and continued to fall after hours. This seemed to revolve around commodity and oil prices which were stronger in early afternoon but then turned around sharply later in the day. Slightly frustratingly it just missed the 6091 long order on the drop, then miss the 6180 short order after the rise. From 6175 it fell back to hit an overnight low of 6050.
US & Asia Overnight from Bloomberg
Asian stocks fell, with the benchmark index set to extend a two-month low, as the yen’s biggest gain in three months weighed on Japanese exporters and health-care shares declined.
The MSCI Asia Pacific Index slid 0.3 percent to 129.67 as of 9:01 a.m. in Tokyo, poised for its lowest close since Oct. 6, as health-care and consumer shares led losses. Japan’s Topix index dropped 0.8 percent after the yen jumped 1.2 percent against the dollar on Wednesday, the most since Sept. 1. The regional equity measure is on course for its worst week since September, fueled by a rout in commodities and concern about decelerating Chinese growth, just days before the Federal Reserve decides whether to raise U.S. interest rates for the first time since 2006.
“If you’ve got cash you’re better off hanging on to it and seeing how this plays out,” said Don Williams, Sydney-based chief investment officer at Platypus Asset Management Ltd. “It’s going to get more difficult into the next calendar year and earnings growth is waning. We’re pretty circumspect.”
U.S. crude eventually extended losses on Wednesday, closing down 0.9 percent at $37.16 a barrel after earlier rising as much as 4 percent. It climbed 0.7 percent to $37.40 per barrel today. The dollar fell for the first time in four days on Wednesday as the commodity selloff moderated, boosting the currencies of some resource-exporting nations and the yen.
Regional Gauges
Australia’s S&P/ASX 200 Index slipped 0.8 percent. BHP Billiton Ltd. rose 2.4 percent, paring this year’s drop to 36 percent.
South Korea’s Kospi index fell 0.1 percent, with the Bank of Korea widely forecast to maintain its record-low key interest rate Thursday.
New Zealand’s S&P/NZX 50 Index retreated 0.4 percent and the nation’s dollar jumped after the central bank cut its key interest rate and said the record-low level should enable it to meet its inflation target.
Futures on Hong Kong’s Hang Seng Index rose 0.5 percent in most recent trading, while contracts on the FTSE China A50 Index declined 1.1 percent. Chinese stocks fell for a fifth day in Hong Kong on Wednesday after data showed mainland producer prices slid for a 45th month and the central bank cut the yuan’s reference rate to the weakest level in four years.
Futures on the Standard & Poor’s 500 Index rose 0.3 percent. The underlying equity gauge fell 0.8 percent on Wednesday, reversing an earlier advance as technology shares retreated. Traders see a 78 percent chance the Fed will raise rates next week. [Bloomberg]
FTSE Outlook and Prediction
That was a pretty bearish fall from the 6175 yesterday just before the bell, which is a bit of a kick in the teeth for the bulls as it looked like there might be a possibility of some upside. That said, we have bounced quite well from the overnight low at 6050. We have the bottom of the 10 day Bianca at 6039 for today so if we do drop again then there is the possibility we get a decent double bottom bounce from that area. The charts are all still favouring downside looking at the moving averages and trend lines, so it will be up to the bulls as to how well they can make the support levels work today. There is a narrow 30min channel to start with, with support at 6080 and resistance at 6205. So, if the bulls can hold that 6080 level initially then it might not be as bearish as everything is thinking. Its worth a long from this area I feel. We have had 5 down days in a row now and the market will, I imagine be keen not to break 6000, if for no other reason than the headlines going into Christmas will be “FTSE drops below 6000 for the first time since September” alongside “UK interest rates to rise after Yellen increases”. Nothing like spooking the masses which they may want to avoid.