FTSE 100 Support 6789 6788 6787 6776 6752
FTSE 100 Resistance 6832 6839 6847 6856 6983

Good morning. Buying the dips is the right strategy for the moment, as yet again we had a dip and rise day yesterday, but its just dipping a bit further than the supports that I am calculating pre open. Very annoying. Yesterday the 6775 area broke, we hit 6755, then bounced to 6820, stopping just short of the top of the Bianca channels (6838). The top of the 10 day channel today is 6832 – we have had a strong overnight rise helped by a strong Asia session, so I think we will see that level tested. The S&P has broken the 2200 level with the futures prices as well. 2209 for the top of the 10 day channel on the S&P500.

US & Asia Overnight from Bloomberg

Asian stocks climbed, joining a global rally, and metals advanced, while oil extended its advance on optimism OPEC will agree to cut output. The won strengthened against the dollar.

The MSCI Asia Pacific Index of equities climbed 0.9 percent, led by energy and material shares. Copper headed for its highest close since July 2015. Oil surged as Iran signaled optimism that OPEC will agree to a supply-cut deal and Iraq said it will offer new proposals to help bolster unity before next week’s meeting in Vienna. The yen erased an earlier advance sparked by a tsunami warning in the Fukushima region, and South Korea’s currency headed for its biggest gain in two months against the dollar.Asian equities gained after all four major U.S. equity benchmarks climbed to record highs for the first time since 1999. American shares were boosted as companies ended a five-quarter profit slump and Donald Trump’s election fueled optimism that his plans to cut taxes and boost fiscal spending will benefit industries more geared toward economic growth. The outlook for world growth is providing a tailwind to risky assets, with Goldman Sachs Group Inc. saying Monday that a renewed acceleration of global factory activity suggests commodity markets are entering a cyclically stronger environment.

“There’s so many things that are contributing at the moment, the optimism around Trumponomics, and the fiscal stimulus that we have been asking for for years now,”said James Woods, a Sydney-based investment analyst at Rivkin Securities. “That is absolutely helping and also the U.S. earnings growth for the third quarter that beat the earnings recession. The U.S. economy is doing well and it’s a good sign for everyone else for the global economy.”

Stocks

The MSCI Asia Pacific Index headed for its highest level since Nov. 10. Australia’s S&P/ASX 200 Index rallied 1.2 percent, while Hong Kong’s Hang Seng Index advanced 1.4 percent as of 1:27 p.m. in the city.

MSCI’s emerging-market gauge rose 0.7 percent, trimming its monthly slide, as the Kospi index added 0.9 percent in Seoul and Taiwan’s Taiex rose 1.1 percent.

Contracts on the S&P 500 Index increased 0.4 percent. The S&P 500, the Dow Jones Industrial Average, the Nasdaq Composite Index and the Russell 2000 Index rallied to their all-time peaks on Monday.

“It’s a push on the upper end of the equity markets due to this renewed belief that there’s tax cuts and stimulus spending coming in 2017 and 2018,” said Chad Morganlander, a money manager at Stifel, Nicolaus & Co. in Florham Park, New Jersey, where he helps oversee about $172 billion. “The overall equity markets are taking a cue from that and they are trading on the belief that earnings will move higher as well as revenues in 2017.”

Commodities

Copper added 1.9 percent to $5,667 a metric ton on the London Metal Exchange, while zinc and lead rallied more than 1 percent. Investors have piled into industrial commodities in the past month amid signs that the outlook for demand is improving.

Oil climbed to a three-week high. Discussions went well, Libyan OPEC Governor Mohamed Oun said as he left the group’s Vienna headquarters on Monday evening. The two-day meeting, a warm-up for a full OPEC meeting next week, will continue tomorrow. Goldman Sachs said the likelihood of an agreement meant the bank was bullish on oil in the short term.

“Market players are positioning themselves for higher prices, and oil will be in the $50 to $55 range if there is a deal,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “OPEC members are building a lot of expectations and taking too much exposure to let a deal fail.”

West Texas Intermediate crude for January delivery rose 1.4 percent to $48.93 a barrel on the New York Mercantile Exchange.
Gold advanced 0.3 percent, extending its climb from the lowest since February as the dollar declined, boosting demand for the metal as an alternative asset.

Currencies

The yen advanced as much as 0.5 percent to 110.27 per dollar on Tuesday before erasing the gain. Japan downgraded the largest tsunami warnings issued in the country for five years as the risk to life receded following after a magnitude 7.4 earthquake off the coast of Fukushima.

The won rallied 1 percent. The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, fell 0.1 percent, after declining on Monday to halt a two-week surge. [Bloomberg]

FTSE 100 Outlook and Prediction

For today I am expecting the bullishness to continue, however there is the top of the 2 Bianca channels at 6832 and 6839 for them to jump first. As such we may see a bit of a dip back from this area. The bulls will be keen to hold above 6800 now, especially after so many attempts to break it over the past few sessions and the policy of buying the dip is still valid. There is decent support on the 30 minute chart at 6790 where we have the pivot, coral and 200ema so this would be a good area to go long. The S&P bulls have managed to break the 2200 level so will be keen to build on that today.

Resistance above the Bianca channels is on the daily at 6847 – the 25ema that we dropped off just prior to the election (it was that short at 6904 on the 9night of the 8th November) so second test of that, R2 at 6856 and then the daily coral at 6993. We then start seeing the top of the Raff channels as possible levels at 7030 and 7070 – not levels that I think we will see today though!

So, for today, fairly positive session expected again with the bulls likely to pull away from the 6800 level, but if the bears break 6790 then 6735 looks likely as the next support level. And if that goes then that changes the whole picture and it could get pretty bearish quite quickly for 6650 and lower.