Good morning. From what I have heard I think this rise has caught the vast majority off guard, myself included as I was expecting yesterday to be more bearish and for the drop off the 6350 level to break through the 6305 level. Markets were fuelled by the hope that the Fed won’t be rushing to raise interest rates yesterday. I still think it will be next year at the earliest. We have tested 6445 overnight which is the 50% retrace of the whole recent high to low, and with the 20 day Bianca channel at 6454 we might see the bears have a go at this level.
US & Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index heading for its biggest weekly advance since December 2011, as U.S. shares rallied after minutes from the Federal Reserve’s latest meeting indicated the central bank won’t rush to raise interest rates. Energy companies led gains as oil headed for its steepest weekly increase since August.
The MSCI Asia Pacific Index climbed 0.7 percent to 132.13 as of 9:00 a.m. in Tokyo, poised for a 4.6 percent rally this week. While Fed officials noted the U.S. economy continued to improve, the committee decided to wait for additional data confirming the outlook for growth, the minutes showed. Officials cited growing risks, mainly from China, while saying they were on track to increase rates this year. Odds of a Fed liftoff in 2015 have fallen below 50 percent, futures data show, after a weaker-than-expected U.S. jobs report last week.
“This looks like a sustainable turnaround,” Michael McCarthy, chief market strategist in Sydney at CMC Markets Plc, said by phone. “Investors have become less pessimistic. Things are definitely not in a strong economic environment but there is an expectation of further central bank support.”
Japan’s Topix index added 1.1 percent. New Zealand’s S&P/NZX 50 Index rose 0.7 percent, and Australia’s S&P/ASX 200 Index advanced 1.1 percent. Markets in South Korea and Taiwan are closed for holidays Friday, while those in China and Hong Kong have yet to start trading.
The Shanghai Composite Index climbed 3 percent on Thursday as trading resumed after a week-long holiday and investors speculated the government will take more steps to boost the world’s second-biggest economy. FTSE China A50 Index futures rose 0.8 percent in most recent trading, while contracts on the Hang Seng China Enterprises Index in Hong Kong added 0.4 percent.
E-mini futures on the Standard & Poor’s 500 Index slipped 0.1 percent on Friday. The underlying equity measure advanced 0.9 percent on Thursday as commodity shares rallied. [Bloomberg]
FTSE Outlook
I have that Friday feeling today, and its not immediately clear where this is going. We have some fairly key resistance at the 6450 area – 6445 is the 50% retrace of the high to low, and we have the top of the 20 day Bianca at 6454. As such I am inclined go for a short at this area for a run down to the 6424 support area, though if the bears really start to go for it then a dip to the pivot at 6387 is possible. The Dow has got back above 17000, so its possible it will push a bit past that now before some other crisis develops to take it back down to 14500 before the year end rally back to 17000+ For the moment the moving averages are all pretty positive so with support at 6425 on the 2 hour chart, as well as the 25ema on the 30minute chart this area might be worth a long and we can see who wins the battle today – bulls or bears!