Good morning. Well the long was rather better than the short yesterday with the latter taking then being stopped out as unfortunately it coincided with Draghi speaking. I did debate removing the order but left it on in the end. The long off the pivot worked better though! As I write this we are testing yesterdays high at 6578, and a close above 6555 would keep things bullish for a push to the top of the daily channels – 6650+. Its NFP news today so going to be choppy at 13:30 when that is released.
Asia Overnight from Bloomberg
Most Asian stocks rose, paring a weekly decline on the regional index, after a drop in American jobless claims bolstered optimism in the world’s largest economy before a government report on employment.
More than three shares climbed for each that retreated on the MSCI Asia Pacific Index (MXAP), which gained 0.1 percent to 140.18 as of 9:03 a.m. in Tokyo, before markets opened in Hong Kong and China. The measure is headed for a 1.2 percent decline this week. The European Central Bank vowed yesterday to increase stimulus efforts if needed, less than one week after the Bank of Japan decided to bolster already-unprecedented easing. The yen held at 115.21 per dollar after falling 0.5 percent yesterday.
“U.S. data continued to tick along with unemployment claims falling more than expected,” said Stan Shamu, Melbourne-based market strategist at IG Ltd. “Optimism is running hot heading into today’s official non-farm payrolls.”
The number of Americans filing jobless claims for the first time dropped to a three-week low of 278,000 in the week to Nov. 1, below the 285,000 median forecast of 50 economists surveyed by Bloomberg. Today’s data may show nonfarm payrolls rose by 235,000 last month, after climbing 248,000 in September, according to the median of 100 estimates compiled by Bloomberg. The jobless rate probably held at a six-year low of 5.9 percent in October.
ECB President Mario Draghi said policy makers will be ready to implement further measures if needed as he signaled officials may cut growth forecasts next month. Speaking at a press conference in Frankfurt yesterday after the ECB left interest rates unchanged, Draghi said that the Governing Council “is unanimous in its commitment to using additional unconventional instruments within its mandate.”
Japan’s Topix index gained 0.7 percent. Australia’s S&P/ASX 200 Index rose 0.5 percent and New Zealand’s NZX 50 Index advanced 0.3 percent. South Korea’s Kospi index slid 0.1 percent.
FTSE Outlook
We are currently testing the level hat we spiked to yesterday at 6578 so I expect a bit of resistance here first thing today, most likely with a dip down to the pivot at 6545. If that holds then the bulls should be able to push on again, and if we break 6578 then 6592 and 6610 are the next levels of note. If it were to get uber bullish then the top of the Bianca channels at 6625 (10 day) and 6649 (20 day) are more longer term resistance. If the bulls manage to close above 6555 today then that will give the FTSE some strength for the foreseeable and probably invalidate most super bear predictions of drops to 4000! I think a long off the pivot today could work out, though if that breaks then the next support is 6524 – and if that goes then a 40 point drop to 6480, along with the bigger bearish picture remaining valid. It feels like its being under-pinned at the moment so it doesn’t all goes pearshaped with eh cutting of the US QE, so it will be interesting to see how long this rise lasts. I am watching the top of the daily channels with interest as I think once we get near those levels we will see profit taking – 6650 FTSE, 2067 S&P, 9700 Dax.
If the bulls fail to break 6578 today then we could be in for a run down for the next few sessions. That level, as well as being the top of yesterday’s spike on the ECB news, is also the top of the 30min and 10min channels.
Support so entry levels for a possible long
- 6545 daily pivot
- 6524
- 6495
- 6480
Resistance so entry levels for a possible short
- 6578
- 6592
- 6625
- 6649