Good morning. The FTSE really didn’t want to hold 6200 yesterday dropping over 100 from that level – bit annoying the stop got pinged on the short at 6195 too, but thats trading. At least the long came good first! Its choppy leading up to the Fed on Thursday so likely to be much of the same today and tomorrow. Interestingly the 10day Bianca channel has starting an upward trend with support at 6035 so the bulls might just be able to hold above 6000 and push higher over the next 2 weeks – though that does of course depend on Thursday. Wasn’t the most buoyant of Asian sessions either, with China continuing to dampen sentiment during Tuesdays session, whilst the Nikkei 225 pulled away from its best levels after the BoJ refrained from further easing and was less dovish than some had hoped for.
US & Asia Overnight from Bloomberg
Asian stocks rose, with consumer shares leading gains, as investors awaited a Bank of Japan policy decision Tuesday ahead of the Federal Reserve’s meeting later this week.
The MSCI Asia Pacific Index advanced 0.2 percent to 127.53 as of 9:03 a.m. in Tokyo. Two of 35 economists expect extra monetary stimulus from Japan’s central bank, while traders put odds of the Fed raising borrowing costs at its Sept. 16-17 meeting at 28 percent.
Everyone “is really just looking at that Fed decision,” Chris Green, an Auckland-based strategist at First NZ Capital Ltd., said by phone. “It’s a close call. A lot of the angst in the market could be relieved by the Fed actually moving.”
Japan’s Topix index traded little changed. The BOJ will expand easing on Oct. 30, according to 11 economists in the Bloomberg survey taken from Sept. 7-10. Of the total respondents, 13 said they don’t expect any stimulus at all.
Australia’s S&P/ASX 200 Index climbed 0.1 percent. Former Cabinet minister Malcolm Turnbull, 60, became the nation’s prime minister late Monday after ousting Tony Abbott, 57, for the Liberal Party leadership. With an election due by next year the former Goldman Sachs Group Inc. executive must turn around the government’s poor ratings.
South Korea’s Kospi index was little changed and New Zealand’s NZX 50 Index rose 0.2 percent. Stocks in China and Hong Kong have yet to start trading, with futures on the Hang Seng Index sliding 0.6 percent.
The Shanghai Composite Index fell 2.7 percent on Monday, its steepest drop in almost three weeks, after data over the weekend added to concern China’s economic slowdown is deepening and as traders gauged the level of state support for equities.
E-mini futures on the Standard & Poor’s 500 Index were little changed. The underlying U.S. equity benchmark measure slid 0.4 percent on Monday. [Bloomberg]
FTSE Outlook
For today we have the pivot at 6123 to act as resistance along with a decent’ish looking support on the 30min chart at 6070. If that holds on any initial dip then we could be on for a rise to the pivot. I have gone for a dip to start with as the 10min chart is looking a bit bearish, based on the moving averages and trending down in a fairly narrow channel. Below that 6070 level we have some daily supports at 6030 for the bottom of the 10 day Bianca and then 6000 for the bottom of the 10 day Raff. longs off these levels might well be worth a go with a tight stop. I am still thinking that the Fed are going to keep rates as is for a little while longer but I usually guess these things wrong! Anyway, if the bulls were to push past the 6123 pivot then the 6140 area and 6200 are the next resistance levels of note. My 2 hour chart has been bearish since the 10the September and unless the bulls break 6145 it looks like staying that way. That said, i am still slightly optimistic that we get a rise to 6400 during September.