Good morning. Well that was close, had the short order in for 6727, having said the high for the day was probably going to be around the 6725/6730 area and low and behold it just missed the order, topping at 6725.8. Still, not too far out and judging from the email quite a lot of you managed to get on it anyway. Thanks to the Ukraine situation again the bears managed to get some downward strength bottoming at around the pivot area and hitting the long order at 6677 before the bulls brought it back up again. Even if I do say so myself, the gold analysis was rather spot on too, with the support at 1271! Also thanks to Ukraine that took off to 1300! Not too bad yesterday in the end.
Unless the Ukraine situation really spirals out of control I would say that the FTSE trend is up still for the moment with a potential 6900 on the cards. 6665 support will need to hold today, being yesterdays low, though with it being Friday it could in fact do anything, especially with US consumer confidence data out later (13:55).
Asia Overnight from Bloomberg
Asian stocks fell, with the regional benchmark index heading toward a weekly loss. Wheat climbed and nickel traded near a 14-month high as the U.S. warned Russia of an “expensive mistake” in Ukraine.
Hong Kong’s Hang Seng Index dropped 1.4 percent by 1:07 p.m. in Tokyo, with the MSCI Asia Pacific Index heading to a 0.8 percent loss for the week. Standard & Poor’s 500 Index futures were little changed. China’s yuan touched a 16-month low. Wheat contracts rose for a fourth day, adding 0.3 percent as soybeans and corn rallied at least 0.2 percent. Nickel was little changed at $18,348 a metric ton in London and is headed for a 15 percent jump this month as tensions rise over Ukraine.
U.S. Secretary of State John Kerry said Russia will be making a “grave mistake” if it doesn’t halt provocations in Ukraine. Russia is the world’s fifth-biggest wheat exporter, followed by Ukraine. Tokyo’s consumer prices rose 2.7 percent in April from a year earlier, the biggest jump since 1992, driven by a sales-tax increase and stimulus from the Bank of Japan. The U.K. releases retail sales figures today.
“The level of tension between the U.S. and Russia is obviously fueling concern among investors, lending support for assets like nickel, wheat, palladium and oil,” said Kazuhiko Saito, a Tokyo-based analyst at commodities broker Fujitomi Co. “Even though we may see some technical retreat after a strong rally, the trend is likely to continue as the situation isn’t going to resolve itself anytime soon. Commodity prices aren’t much help for the global equity market.”
Liquor Slump
The Hang Seng Index is heading for its biggest weekly retreat since March 14, having lost 4.5 percent this year. The Hang Seng China Enterprises Index (HSCEI) slid 1.2 percent and is headed for a second straight weekly drop.
The Shanghai Composite Index swung between gains and losses. Kweichow Moutai Co., the country’s biggest producer of baijiu liquor, plunged 7.9 percent after first quarter profit growth plummeted. The company joins other global makers of premium spirits including Pernod Ricard SA, Diageo Plc and Remy Cointreau SA in reporting slumping sales amid a crackdown on extravagant spending among mainland officials.
The Kospi index in Seoul fell 1 percent, while Taiwan’s benchmark index dropped 1.9 percent. Markets and Australia and New Zealand are closed for a holiday.
The S&P 500 rose 0.2 percent in New York to near a record. Equities climbed in the U.S. as earnings from Caterpillar Inc. to Apple Inc. beat estimates, with data on services and consumer confidence in the world’s largest economy due later today.
FTSE Outlook
Looking at the Bianca chart for today we still have 2 channel tops at 6725, and with yesterdays high there that will be the level that the bulls will need to break. As I mentioned above it does feel slightly optimistic for a rise to 6900, and that might actually set up well for a drop from May time for the old “sell in May and go away” saying.
For today, we have support at 6665 and below that at 6615. Unless Ukraine kicks off again or some other event I expect the 6660 area to hold. Todays pivot is now above the current price so likely to act as resistance initially, being 6698.
The 200 ema on 30minute held well yesterday as well and if we get a test of that today it could do so again, maybe with a little overshoot to 6662. As such I am thinking once again the familiar dip and rise for today as we also have a fairly decent 30minute channel in play, the bottom of which is at that level too. the top of the channel is 6730, but with the Bianca channel at 6725 I expect it will stall around that area.