Good morning. Nice trade on the FTSE yesterday that actually dropped further than the point I took profit in the end, but even so the bulls came charging back to hit 6160 as a high, before dropping 100 again. Certainly volatile and I expect today and tomorrow will be more of the same as we approach NFP news tomorrow. Chinese markets are closed for the next 2 days though so that may help keep things a little bit calmer! That said I think the panic has been slightly overdone (for the moment and till the next one at any rate) so still have a slight bullish vibe, at least for 6187 today where we have the top of the Bianca 20 day channel.
US & Asia Overnight from Bloomberg
Asian stocks rose, following a rebound in U.S. shares, with markets in China and Hong Kong closed for a holiday.
The MSCI Asia Pacific Index gained 0.4 percent to 126.45 as of 9:01 a.m. in Tokyo. Chinese shares closed lower on the last trading day of this week as investors assessed the level of state support before a major military parade on Thursday. Mainland markets are closed Thursday and Friday to commemorate the end of World War II.
“One modest positive today is the fact China is offline for its Victory Day commemorations,” said Chris Weston, Melbourne-based chief markets strategist at IG Ltd. “So traders and investors will be focused on domestic data, valuations and trying to understand how to navigate these crazy markets.”
E-mini futures on the Standard & Poor’s 500 Index added 0.3 percent following a 1.8 percent gain on the underlying index on Wednesday. The U.S. equities gauge slumped 6.3 percent last month as China’s currency devaluation spurred concern over global growth, erasing more than $5.7 trillion in equity market values worldwide, while volatility surged the most on record.
South Korea’s Kospi index rose 0.7 percent and Australia’s S&P/ASX 200 Index gained 0.5 percent. New Zealand’s NZX 50 Index advanced 0.7 percent. [Bloomberg]
FTSE Outlook
Todays pivot is 6107 and that tallies with the bottom of a rising 10 min channel for support. As such I think any initial dip will find support around there and be set for a rise towards the 20 day Bianca channel top which has dropped down to 6187 for today. With 30min channel resistance at 6190 I think that might cap any initial rise, and with China closed today traders might just see today as a chance to catch their breath (thats jinxed it now) and get ready for NFP news out of the US tomorrow. ADP yesterday can give a bit of a clue and was favourable so we might get an NFP figure around 215k. Generally I am still feeling fairly upbeat for the short term and can see the FTSE hitting 6300 in September, maybe 6400. However, longer term predictions seem to be getting harder to make these days so i will keep focussing on the 30min chart for daily trading. And that looks good for a rise today to 6190, if the bulls can break the early resistance at 6150.