Good morning. Yesterdays long didn’t work, with that sharp drop at the open hitting the stops pretty soon after the long order took. It did bounce back though and there are still resistance levels around the 6860/6880 areas. We are getting lower lows with each drive down by the bears so it might only be a matter of time now till 6800 breaks. 6860 looks important at the moment though and if prices hold above that today then we might not get the drop for a little while. The bottom of the Raff channels are what held it again yesterday (10 day as opposed to 20 day) and have done so on a couple of tests now.
Bull Tuesday today with a 5.4 divi, but more importantly the 30 minute chart looks alright for a bit more upside (is that famous last words?). Todays pivot is 6837 so could be initial support on any opening dip.
Asia Overnight from Bloomberg
Asian stocks swung between gains and losses as information technology companies climbed and materials shares led declines.
The MSCI Asia Pacific Index was little changed at 139.39 as of 12:21 p.m. in Tokyo after falling 0.2 percent and rising less than 0.1 percent. Thailand’s army imposed martial law nationwide after months of political turmoil that brought down an elected government and tipped the economy into a contraction.
“The market lacks catalysts,” said Junya Naruse, chief strategist at Daiwa Securities Group Inc., Japan’s second-largest brokerage. The situation in Thailand “doesn’t impose much of a geopolitical risk, but it still weighs on the market when it doesn’t have other catalysts.”
Japan’s Topix (TPX) index rose 0.6 percent, rebounding from a one-month low. The Bank of Japan starts a two-day policy meeting today. South Korea’s Kospi index lost 0.4 percent.Australia’s S&P/ASX 200 Index gained 0.1 percent, and New Zealand’s NZX 50 Index slipped 0.6 percent.
Hong Kong’s Hang Seng Index climbed 0.6 percent. The Hang Seng China Enterprises Index of mainland companies traded in the city rose 0.1 percent. The Shanghai Composite Index added 0.2 percent, while Taiwan’s Taiex index advanced 0.1 percent.
Singapore’s Straits Times Index fell 0.1 percent after the nation’s gross domestic product expanded an annualized 2.3 percent in the three months through March from the previous quarter, when it climbed a revised 6.9 percent, the trade ministry said in a statement today.
US
Futures on the Standard & Poor’s 500 Index were little changed today. The measure added 0.4 percent yesterday as Internet and small-cap shares extended a rebound. About 4.9 billion shares changed hands on U.S. exchanges, the second-lowest level of the year.
“The U.S. markets experienced one of the quietest trading sessions of 2014,” Evan Lucas, Melbourne-based market strategist at IG Ltd., said in an e-mail. “Risk assets saw light trade as a chance to bounce off the lows seen last week, but volume throughout the market suggests the bears were resting, rather than a conviction buy move.”
FTSE Outlook
I was a bit too optimistic yesterday and that initial move down through the supports only found a bottom at the 10 day Raff before bouncing back. Unfortunately the lower short order just missed – one of those days! Resistance is still 6857 today with immediate support at the daily pivot 6837. Above 6857 the other resistances aren’t actually that far away – 6863, 6867, 6883 being the closest and main ones. We do also have the 10 day Bianca channel at 6911. Support on the 10 day is 6832 – around the pivot level also. Yesterdays rise was on quite low volume so I am still wary of being too heavy long, and would prefer bigger shorts off the resistance levels at the moment, but think that 6835 area might hold, with a stop just below the 6828 area, as if that level breaks it suggests that 36804 is likely to be tested again (and if the lower lows continue, maybe broken this time)
In the bulls favour there is a rising channel on the 30minute chart with support at 6845 for today. The 2 main levels I am going to watch for today are a long off the 6835 area, and a short off the 6868 area.