Good morning. Well that worked out yesterday with the dip to the pivot at 6810 and then the bounce. However, the bounce was a bit weak – i was hoping to 6854, but it stalled at 6830, around the the coral line on the 30 minute chart. The situation in Thailand escalated a bit yesterday with martial law leading to curfews as there was yet another coup. The situation in Ukraine continues with 16 killed at a road block yesterday.That said, i think if the 6810 level continues to hold then we should see a bit of bullishness today.
Asia Overnight from Bloomberg
Asian stocks rose, with the regional index set for the first back-to-back weekly gain in two months, on signs of growth in the world’s largest economies. Palladium retreated from a 33-month high, while Thailand’s baht advanced, regaining some of yesterday’s losses following a military coup.
The MSCI Asia Pacific Index added 0.6 percent by 12:48 p.m. in Tokyo, bringing its weekly gain to 1 percent. Futures on the Standard & Poor’s 500 Index (SPX) were little changed after the gauge rose 0.2 percent in New York. The euro headed for a third week of losses, while the baht strengthened 0.3 percent. Palladium fell for the first time in six days and platinum slid 0.3 percent. Credit risk in Asia declined for a third day.
The U.S. reports new home sales today after yesterday following China with better-than-estimated manufacturing data, while German business confidence due today is forecast to fall. Thailand’s army staged its 12th coup in eight decades as the army chief said he was seizing control to restore peace. In Ukraine, 16 soldiers were killed in an attack by pro-Russian insurgents, before the presidential election this weekend.
“Most people view that the U.S. will be the growth engine of the world this year,” Chris Weston, chief market strategist at IG Markets Ltd. in Melbourne, said by phone. “If you look at everything on an adjusted basis, the equity market probably continues to be the most compelling place to be in at the moment.”
Thailand Coup
Thailand’s baht strengthened to within 0.2 percent of the level it was trading at before yesterday’s announcement of a military coup. The currency gained as much as 0.43 percent to 32.46 per dollar in Bangkok, having been at 32.40 immediately prior to the takeover by the army.
“The baht has held up pretty well,” said Sanjay Mathur, head of research and strategy for Asiaexcluding Japan at Royal Bank of Scotland Group Plc in Singapore. “The fact that its broader fundamentals are in shape has obviously helped the baht, but I think the biggest issue for Thailand right now is they need to revive growth.”
Ukraine Poll
Platinum slid to $1,486.25 an ounce after climbing to $1,496.38 yesterday, the highest level since September. Palladium retreated to $834.25 an ounce after reaching $839 yesterday, the highest price since August 2011, on concern that supplies may be disrupted from Russia and South Africa, the largest producers. An 18-week pay strike at the world’s biggest platinum producers in South Africa has crippled output.
The pro-Russia insurgency in Ukraine, which has been racked by instability since the nation’s president was ousted in February, is intensifying, even after Russian President Vladimir Putin said he would ease the path for the May 25 presidential vote by pulling back his troops.
FTSE Outlook
Looking at the 30minute chart we are just starting to get the EMA cross over and if yesterdays low at 6810 holds (good news coming for anyone still holding that from yesterday) then I think we will see some more upside today. A test of the top of the 10 day Bianca channel at 6865 would be ideal. Today’s pivot level is 6825 so bulls will need to break above that asap, otherwise a slip below 6810 will lead to the next support at 6779 which is the bottom of the 10 day Bianca channel.
Movement above the pivot at 6825 should lead to 6846 initially, then 6858/6865 area providing stronger resistance. There is an outside chance of resistance at 6875 being hit. As I mentioned support is 6810 then 6782. I am therefore thinking another long at this same level but with a fairly tight stop as if it breaks it will drop that 30 points, though 6782 might be worth small risky long as well, though I haven’t put that on the trade plan.