Good morning. What an interesting open that was yesterday with a pre open move designed to take out as many stops as possible before dropping down to the support area. Quite often if you get a sharp move like that 07:55-07:59:59 it is worth always doing the opposite as its usually a stop hunt. Ended up dropping from 7127 all the way down to the entry level for our long at 7073, which managed to get a few bull points. That level held pretty well for most of the session, before the lower support at 7055 was tested and held. So a bit of bull power around still for the moment. It feels like its make or break today for the bulls, as we are testing the bottom of several daily channels – both Raffs on the Dax, 10 day Raff on FTSE at 7020 and the Bianca 10 day at 7059.
US & Asia Overnight from Bloomberg
Most Asian stocks fell after the regional benchmark index closed Thursday at a seven-year high. Japanese shares slid to pare a third weekly advance.
Two shares dropped for each that rose on the dollar-denominated MSCI Asia Pacific Index, which was little changed at 154.44 as of 9:05 a.m. in Tokyo. The measure closed at its highest level since January 2008 on Thursday, and is poised to end the week 1.4 percent higher.
Japan’s Topix index lost 0.4 percent and Australia’s S&P/ASX 200 Index slid 0.1 percent. New Zealand’s NZX 50 Index and South Korea’s Kospi index were little changed.
E-mini futures on the Standard & Poor’s 500 Index were little changed. The underlying gauge slipped 0.1 percent on Thursday in New York as semiconductors declined on SanDisk Corp. results to offset a rally in Netflix Inc.
Investors are weighing economic reports for clues on the timing of the Federal Reserve’s first rate increase since 2006. Fed Chair Janet Yellen has said that while rates will probably rise this year, any decision depends on economic data. Housing starts rose less than forecast in March, while jobless claims increased in the week ended April 11. [Ref]
FTSE Outlook
Its a Friday and also option expiry today so expect a bit of chop at 10:10ish as various contracts roll over. todays pivot is initial resistance for the bulls at 7087 (IG), 7079 (live charts), whilst the 30minute chart has a fairly decent looking rising channel currently in play. With the bottom of the 10 day Bianca a 7059, this area might hold for an initial test this morning. I have plotted in some weak bull today, as I think the bulls will be keen to defend this area, but if 7059 break then the next support levels to look for are 7051 (yesterdays low), 7035 and 7026. Resistance as mentioned is initially at the pivot 7087, with 7127, 7145 and 7160 above that. I don’t think today will be bullish enough to reach those upper levels, but longs off the support around 7050 could be worth a go.