Good morning. Damn FTSE – short order sat at 6647, misses it by 2 points then drops to 6570. Sods law! Anyway, as expected, we had a little dip then the rise yesterday before a dose of reality saw indices drop, a few points we got within the live trading room, even if we did miss the “top”. Interestingly though gold didn’t rise much, instead dropping to the 1298 support level mentioned. Thats interesting as it might well mean that the indices bounce back just as fast as they dropped as there was no flight to safety. If 6555 area holds as support on the FTSE I can see us back above 6600 today, maybe ready for a drop tomorrow if GDP under delivers.
Asia Overnight from Bloomberg
Asian stocks pared losses after U.S. President Barack Obama said complacency on Russia’s annexation of Crimea would ignore the lessons of two world wars. New Zealand’s dollar advanced after a bigger-than-estimated trade surplus, while platinum rose.
The MSCI Asia Pacific Index slid 0.1 percent by 1:25 p.m. in Tokyo trimming a 0.7 percent decline earlier. Japan’s Topix index pared a loss of as much as 2 percent as most stocks traded without the right to their latest dividend. Information technology shares plunged. Standard & Poor’s 500 Index futures rose 0.2 percent. The so-called kiwi climbed to the highest in a week. Platinum snapped a three-day drop.
Obama said after a meeting with European leaders that the global order is at “a moment of testing” and vowed to increase Russia’s economic and political isolation if it doesn’t alter course on Ukraine. China reported industrial profit growth slowed to 9.4 percent year to date as money-market rates increased the most since January. The U.K. releases retail sales data before the U.S. publishes initial jobless claims figures and a final reading for fourth-quarter economic growth.
“There’s definitely the chance that things will escalate on the fact that the U.S. has been speaking increasingly strongly about actions,” Angus Gluskie, managing director at White Funds Management Ltd. in Sydney where he oversees about $550 million, said by phone today. “It’s likely that the market will get nervous.”
USA
U.S. stocks extended declines in the last hour of trading as investors sold companies that have led the S&P 500’s bull market. The S&P 500 closed at 1,852.56, a 1 1/2-week low, after climbing during the session to within three points of its last record closing level, reached March 7.
Leading Declines
Technology, health-care, consumer and mining shares, all up more than 170 percent since March 2009, slipped0.7 percent in the final hour of trading in New York, while the Russell 2000 gauge of smaller companies saw about one-third of its 1.9 percent drop come during the period.
“It was probably a continuation of the past few days, with investors selling off some of the winners and high fliers,” Sean Sun, an equity research analyst at Santa Fe, New Mexico-based Thornburg Investment Management Inc., which oversees $94 billion, said by phone. “It definitely feels like the markets re more volatile recently than they have been.”
Ukraine
Obama said there is no military solution to the situation in Ukraine and that the door remains open to diplomacy with Russia. Ukraine will receive an assessment today from the International Monetary Fund on its bailout request.
FTSE Outlook
I have some resistance at 6582 today so we may get an initial dip from there, probably down to the 6555 (6548 is S3 on live charts so with a stop below this) level to start with. If that holds as support then a rise to the pivot at 6616 is likely, possibly even 6650. Further upside after that will depend on GDP tomorrow I think. With the drop yesterday we have dipped from being above the 20 day raft channel on the daily chart as expected, just from not quite the level I had penciled in. Which was annoying, anyway, moving on…..
I think that the 6555 level will hold today, though if S3 goes at 6548 the next level of support might not be till 6490 looking at the ProTrend on daily….
Its worth mentioning that there will be ISA money coming into the FTSE early April as you know which will keep it up for a while, then I think it will start dropping, its being kept up so as not to scare that retail money from entering.