6711 to break today?

Good morning. Well off the back of the Iran nuclear deal Oil has dropped (good news for petrol prices, slow to drop though they will be) and in the last hour, gold has also taken a pasting dropping to 1231 as I write this. just on gold, I have support here at 1228/1230 and if that breaks then it could drop to 1175! The bulls will need to exceed 1266 to get some upside towards 1300 again. Anyway, back to the indices, and since the drop on Friday to 6665 the FTSE has bounced back quite well to be knocking on the door of 6700 again.

I am still feeling cautiously bullish for today and expect that if the support level of 6680 holds then we will get 6735 which is mid way between the 2 Bianca channel tops. If they break then the top of the Raff channels will be in play, with a top level around 6760. That said, I do feel that some bearish might creep in soon as it feel like the bears are starting to gain a bit of control with the dips we are seeing. The S&P dipped off a little from the 1810 area, but I think it might want that 1814 I mentioned in Fridays email. That might tally with the top of the FTSE Raff channels at 6760.

Asia Overnight from Bloomberg

Crude oil headed for the biggest drop in three weeks while India led gains in Asian stocks and currencies after Iran agreed to limit its nuclear program. The yen fell to its weakest since May.  Asian stocks rose, with the regional benchmark index rebounding from last week’s drop. Hong Kong’s benchmark equity gauge advanced 0.2 percent to its highest in 10 months, while stocks in Shanghai climbed 0.3 percent.

Brent crude sank 2.3 percent to $108.54 a barrel by 2:02 p.m. in Tokyo as the S&P BSE Sensex Index rose 1.4 percent in India, which imports about 80 percent of its oil. Futures on the Standard & Poor’s 500 Index, which capped a seventh weekly gain Nov. 22, rose 0.3 percent and the MSCI Asia Pacific Index added 0.4 percent. The yen dropped as much as 0.5 percent while Thailand’s currency slid amid protests in Bangkok.

Iran agreed yesterday to curtail nuclear activities in return for easing of some sanctions on oil, auto parts, gold and precious metals, the first major crack in a decade-long deadlock. A report today is projected to show U.S. pending home sales rebounded in October, after data last week showed job openings climbed to a five-year high in September. Bank of Japan Governor Haruhiko Kuroda said today inflation is heading toward the 2 percent target after he initiated unprecedented monetary easing in April.

The Iran deal “is obviously positive and hopefully we can have lower geopolitical risk,” Norman Chan, the Hong Kong-based head of investment at Calibre Asset Management Ltd., said by phone today. “It helps sentiment and growth assets such as stocks. We’re hoping to see oil prices drop to a new low.”

Brent fell from a six-week high and West Texas Intermediate oil dropped 0.9 percent.

Sales Capped

Oil exports from Iran will be held at about 1 million barrels a day under sanctions that remain in force after the nation and six world powers came to an agreement in Geneva, according to the White House. The sanctions have cut Iranian crude sales by 60 percent since the start of 2012, depriving the country of more than $80 billion in revenue, U.S. President Barack Obama’s administration said in a statement.

FTSE Outlook

ftse 100 prediction
ftse 100 prediction

Generally its held up pretty well since Fridays dip but we have some significant resistance levels getting close. Around 6720 for the Bianca and 6760 for the Raff, both areas that might be worth thinking about shorts. I am still cautiously bullish, mainly as the 10 day Raff is heading up again, the EMAs are positive on the 30 minute, but the bulls need to break 6711 to get some more upside, although based on those daily channels, that upside could be limited. The S&P is targeting 1814 I feel, and may possibly even get 1823. That latter target would certainly coincide quite nicely with 6760 on the FTSE. I have plotted the arrows based on that initial resistance at 6711, support at the pivot then a run to the Bianca channel top areas at 6725 which is mid way between the 10 and 20 day (6719 and 6734 respectively). If the bears are really going to gain control this week then prices will need to dip below 6640.