Hi all, This is just a quick email for the Tuesday session. Monday saw the 6750 level hold, so the long trade took after all, despite me thinking that it wouldn’t get that low, but failed to quite reach the target of the daily pivot at 6793. Some closed early of course at +20 or so judging from the emails. A further drop back then another rise shows there is still a bit of bull around. A lot hinges on Iraq at the moment.
Delighted to announce the birth of baby girl at 9pm Monday, as such I am a bit out of sync with the emails etc. Should be back to a normal morning email on Wednesday at the normal time of 7am. Just writing this quickly so you have some levels to look for on Tuesday.
Asia Overnight from Bloomberg
Asian stocks swung between gains and losses as a decline in telecommunication shares countered gains by health-care firms.
The MSCI Asia Pacific Index (MXAP) was little changed at 143.71 as of 11:26 a.m. in Hong Kong, with about four shares rising for every three that fell. Federal Reserve policy makers start a two-day policy meeting today after data yesterday showed American manufacturing is expanding.
“There was some positive data out of the U.S.,” said Stan Shamu, a Melbourne-based markets strategist at IG Ltd. “However, investors seem to be looking ahead to the Fed meeting.”
The Asia-Pacific measure last week touched the highest level since June 2008 amid improving U.S. economic data and indications Chinese growth is stabilizing.
Fed Stimulus
The Fed will this week reduce its stimulatory asset-purchase program by $10 billion for a fifth straight month, to $35 billion, according to the median of 43 economists’ estimates compiled by Bloomberg. Analysts predict data today will show U.S. consumer-price growth held at 2 percent in May from a year earlier, while the number of new homes started probably dropped to a 1.03 million annualized rate from 1.07 million in April.
The International Monetary Fund yesterday cut its economic growth forecast for the U.S. in 2014. The IMF now sees expansion of 2 percent, down from an April estimate of 2.8 percent, while it left its 2015 prediction unchanged at 3 percent. The lender said it doesn’t expect the U.S. will see full employment until the end of 2017, amid low inflation.
Asian shares dropped the past three days amid concern escalating violence in Iraqwill push oil prices higher and increase company costs. That left the Asia-Pacific gauge trading at 13.2 times estimated earnings at its last close compared with 16.4 for the Standard & Poor’s 500 Index and 15.4 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Futures on the S&P 500 gained 0.1 percent today. The gauge rose 0.1 percent yesterday as corporate deals and better-than-forecast growth in American manufacturing overshadowed escalating tension in Iraq.
FTSE Outlook
We are slightly above the daily pivot as I write this, which is at 6760, so there is a slight bullish trend. The bulls need to break 6791 which should see 6807 and possibly 6834. The bears will need to break 6748 (yesterdays low), which bring the bounce area at around 6720 into play. I have put 4 trades below, 2 longs, 2 short off various levels,t he idea being that i expect these levels to hold (and hence trade entries) on initial touches. The Raffs are heading down but the channel bottoms have held so far., and the US in terms of the S&P is still hanging on!
We have the top of the FTSE 30 minute channel at 6788/6790 as well.