Good morning, hope you had a good weekend. Friday wasn’t so bad in the end prediction rise, we got the dip from 6852 though it went a bit lower than the 6821 (and typically hit the stop on that alert I SMS’d, before climbing as expected – and nearly reached my upper target at 6880! Thus making Friday bullish as expected! The bears haven’t got it all their own way just yet……. But the week is young! We have some very definite resistance at 6885, and the S&P at 1882, so I am thinking shorts at those levels could be good.
Most of the financial news over the weekend was about the fast rising house prices and what the BoE might do to calm it – though they did say the other day that there wasn’t a bubble! Ha ha! I still think interest rates will have their first rise in Q4, though maybe Q3 isn’t out of the question.
Asia Overnight from Bloomberg
Asian stocks fell, led by Chinese shares after weaker home-price data added to concern that the economy’s slowdown will deepen. The ringgit strengthened after Malaysia’s economy grew faster than economists estimated while wheat fell and nickel led gains in industrial metals.
The MSCI Asia Pacific Index lost 0.3 percent by 1:26 p.m. in Tokyo, with a measure of Chinese companies inHong Kong slumping as much as 1.4 percent and Shanghai shares retreating. Standard & Poor’s 500 Index futures were little changed. The ringgit climbed 0.5 percent after data on May 16 showed the economy expanded at the fastest pace in five quarters. Wheat headed for its longest losing streak since 1998, while corn dropped 0.9 percent. Nickel rose 2.1 percent and copper touched its highest price since March.
China’s home prices rose in the fewest cities in 1 1/2 years in April, according to data issued yesterday, while the central bank ordered banks to curb interbank lending as it seeks reduce so-called shadow banking. The government is evacuating citizens from Vietnam after violent protests and damage to factories there, China’s official Xinhua News Agency said yesterday. Clashes continued in Ukraine’s east between government forces and pro-Russian rebels who have declared an independent state.
“Overall, people can see a number of negatives out there, which is sufficient enough to keep them cautious about the investment outlook,” said Angus Gluskie, a fund manager at White Funds Management in Sydney that oversees more than $550 million. “We might be in for a soft couple of months in the meantime.”
Rebel Killed
Ukrainian government forces continued their offensive in the former Soviet republic’s east, killing one rebel and losing a police station before the presidential election scheduled for May 25. Separatists prepared for a vote in the fall after declaring independence, saying they want to join Russia. The insurgents hold buildings as well as radio and television towers in about 15 Ukrainian cities.
U.S. Stocks
West Texas Intermediate crude oil was little changed at $102.05 a barrel today, after gaining 2 percent last week. Brent crude futures added 0.1 percent to $109.88 a barrel. Escalating tensions in Ukraine and signs of improvement in the U.S. economy stoked WTI’s second straight advance last week.
In the U.S. May 16, the S&P 500 rose 0.4 percent to all but erase its weekly decline. The Russell 2000 Index (RTY) of smaller companies added 0.6 percent, trimming its second straight weekly drop to 0.4 percent as data showing growth in housing starts overshadowed a drop in consumer confidence.
The pace of U.S. home construction jumped in April to its highest level since November, Commerce Department figures showed May 16. Consumer confidence in the world’s No. 1 economy fell in May from a nine-month high, signaling Americans are being shaken by rising grocery bills and elevated fuel costs.
Ten-year Treasury yields were little changed at 2.52 percent today, after halting a three-day drop May 16, rising three basis points, or 0.03 percentage point. Treasuries retreated May 16 amid speculation their rally went too far given the economic recovery.
FTSE Outlook
There was certainly a bit of strength on Friday once it had hit the lows at 6812, the bounce finishing around 6870. The 10 day Bianca channel still has the top at 6909, and support at 6835, so am looking at these levels as wider resistance and support. For today in the short term, closer support is 6845, whilst movement above 6867 is showing 6885. Shorts at these levels could come good today, as the S&P failed to break the 1880 on Friday and has now dropped back a bit as well. The Dax wasn’t quite as bullish on Friday as these other two, only climbing form 9570 to 9620.
I have 3 main trades today, mainly with a short bias as you can see below. There is support at 6845 so a little long there is also worth a go – a break of that support will see a move lower this week. the bears tried to break the bottom of the daly channels last week, I think they will try again this week. I was watching for 1910+ for the S&P for the rise prior to that bearishness at the end of last week – its now looking like that might be optimistic, and its topped out at 1902.
The good thing about 6845 is that it is the bottom of the 30minute channel that is rising, hence the long at that area.
I have put bullish arrows with dips off the resistances – I am in 2 minds as to whether it will push on to the upper target so have put short trades at the 2 main resistances instead.