Good morning. Nice for yesterday to follow the plan with the dip to the pivot and then rise again, though it topped at the 6606 area very late in the day, rather than the ultimate target of 6626. 6670 is still on the radar though for the short term! Todays pivot is 6574, same again? Last day of the week today of course before 4 days off with the FTSE closed Friday and Monday. The US is open and trading on Monday though. The FTSE has dropped back a little overnight after breaking that 6600 level so the bulls weren’t keen to break the 10 day Bianca channel in the end (sits at 6609 today).
Asia Overnight from Bloomberg
Asian stocks rose for a second day after U.S. industrial production increased more than forecast in March and Federal Reserve Chair Janet Yellen said the central bank remains committed to supporting the economic recovery.
The MSCI Asia Pacific Index added 0.1 percent to 138.63 as of 11:53 a.m. in Hong Kong as all but one of its 10 industry groups rose. U.S. industrial production climbed last month after a February gain that was twice as big as previously estimated.
“The global economic cycle is gradually improving and monetary conditions are easy,” said Shane Oliver, who helps oversee about $130 billion as Sydney-based head of investment strategy at AMP Capital Investors Ltd. “The trend in share markets is likely to remain up.”
Japan’s Topix index swung between gains and losses after yesterday capping its steepest rally in two months. GungHo soared 9.4 percent to 583 yen and Canon gained 1.7 percent to 3,232 yen.
Hong Kong’s Hang Seng Index added 0.3 percent and the Hang Seng ChinaEnterprises or mainland shares traded in the city climbed 0.4 percent. The gauge rebounded 9.1 percent through yesterday since entering a bear market on March 20 amid speculation that China policy makers will act to stabilize the economy amid the worst slowdown since the global financial crisis.
The MSCI Asia Pacific Index traded yesterday at 12.6 times estimated earnings compared with 15.9 for the Standard & Poor’s 500 Index and 14.5 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
The Fed has a “continuing commitment” to support the recovery even as policy makers now see the economy reaching full employment by late 2016, Yellen told the Economic Club of New York yesterday. Investors should pay attention to shortfalls in both inflation and the jobless rate for signals on the Federal Open Market Committee’s decisions on the policy rate, she said.
Unwinding Program
Fed policy makers are unwinding the bond-buying program they have used to support the economy while keeping their target for overnight lending between banks in a range of zero to 0.25 percent since 2008.
The U.S. economy continued to expand in most regions as businesses benefited from a rebound from harsh winter weather earlier in the year. Eight of 12 Fed districts characterized growth as “modest or moderate,” the Fed said in its Beige Book business survey, based on reports gathered before April 7.
Futures on the S&P 500 slid 0.2 percent today after the equities gauge yesterday capped its best three-day rally in two months on optimism over corporate earnings and the strength of the world’s largest economy.
FTSE Outlook
Todays pivot is 6574 and the bulls, after all their hard work defending 6507 the other day, will need to defend this level to enable a push higher, most likely to 6626. I still have 6670 on the radar (probably not today today but sometime soon if the bulls can keep their strength up). We do have the Bianca 10 day channel top at 6609 today which is likely to present a hurdle to the bulls so it will be interesting to see if they can break that if tested. It certainly dropped off that 10 day channel last night, though admittedly not by that much. If the pivot is broken by the bears then dip to 6530 is my thinking.
The other reason for expecting support at the pivot area is that we are within pretty decent 30 min channel and the bottom of that is also at that level. I am treating today a bit like a Friday though as its the last day of the week and doing reduced stakes as don’t want to give back the gains from earlier this week, so bear that in mind too.