Good morning. Well that was quite a drop on Friday from the Bianca resistance area at 6705, and we are looking at opening around the 6650 area this morning. I think the fairly predictable pattern from last week of dip to the pivot and bounce will probably end now, as we won’t be having the ISA money flowing in wight he last minute rush. That said, we will get some today for the new tax year. Therefore is 6645 holds as support its not all major doom and gloom just yet but Asia was weak overnight and ended their winning streak, I expect UK and US to be the same today. Todays pivot is 6683 so most likely we will rise and dip from there. Financial news over the weekend was fairly thin, after NFP on Friday came in at 192k.
Asia Overnight from Bloomberg
Asian stocks fell for the first time in nine days, snapping the longest winning streak on the regional gauge this year, with telecommunication and technology shares leading declines.
The MSCI Asia Pacific Index lost 0.5 percent to 138.63 as of 12:26 p.m. in Hong Kong, with seven of the 10 industry groups on the measure falling. Losses in Asian technology firms follow the Nasdaq Composite Index’s biggest retreat in two months on April 4, as investors pare holdings in Internet companies that have led gains in global equities during the past 12 months.
“Some parts of the high-tech space were looking bubbly and overvalued, so there’s some much-needed profit taking going on,” said Masaru Hamasaki, a senior strategist at Tokyo-based Sumitomo Mitsui Asset Management Co., which oversees about 11 trillion yen ($107 billion). “The rout won’t last long, especially considering the U.S. economic recovery is firm. There may be some change where the selloff in overvalued shares leads to flows into undervalued sectors.”
Regional Gauges
Japan’s Topix index slid 1.2 percent as the yen held gains from April 4, trading at 103.27 per dollar. The Bank of Japan, which begins a two-day policy meeting today, may double purchases of exchange-traded funds as part of a second round of monetary easing, analysts polled by Bloomberg say.
Hong Kong’s Hang Seng Index fell 0.6 percent and the Hang Seng ChinaEnterprises Index of mainland Chinese stocks listed in the city gained 0.3 percent. Markets in mainland China and Thailand are closed for a holiday.
Singapore’s Straits Times Index and Taiwan’s Taiex index dropped 0.5 percent.South Korea’s Kospi index declined 0.3 percent and Australia’s S&P/ASX 200 Index retreated 0.1 percent. New Zealand’s NZX 50 Index lost 0.9 percent. Trading volume on benchmark indexes in Australia and Japan was at least 20 percent below the 30-day average for this time of day, according to data compiled by Bloomberg.
US Futures
Standard & Poor’s 500 Index futures slipped 0.1 percent today. The gauge fell 1.3 percent April 4, its largest decline since the first week of February, after large technology stocks from Google Inc. to Yahoo Inc. plunged as investors sold the bull market’s biggest winners.
The Asia-Pacific stock gauge climbed last week to a two-month high as U.S. data pointed to a recovery from severe winter weather and China outlined stimulus to ward off a slowdown threatening its economic-growth goal.
Payrolls
Payrolls in the U.S. rose 192,000 last month after a 197,000 gain in February that was larger than first estimated, the Labor Department reported April 4 inWashington. The median forecast in a Bloomberg survey of economists projected a 200,000 gain. Private employment, which excludes government jobs, surpassed the pre-recession peak for the first time.
U.S. Rates
“We should stand by for an expectation that the first rise in rates in the U.S. will be the first quarter of 2015,” Richard Gibbs, global head of economics at Macquarie Group Ltd., Australia’s largest investment bank, told Bloomberg TV in Sydney. “The data reaffirmed that trajectory.”
FTSE Outlook
We have now dipped below the pivot level for today so the patten of dip to pivot and bounce has come to an end. Which is a shame as that worked pretty much every day last week! I do expect a bit of bearish to creep in now over the next few sessions as we were testing the top of various daily channels for most of last week. We are now at the bottom of the 10 day Bianca channel at 6647 so ideally this level will hold this morning and set us up for an initial climb to the daily pivot at 6683. However, if 6645 support goes then the next support is 6623 and 6600.
On the upside, if the daily pivot were to break (6683) then that 6715 is still possible, and maybe even a test of the top of the Bianca channels again around 6730. The bottom of the daily Raff channel at 6630 is still intact so the bears won’t have it all their way just yet.