Good morning. A day when not a lot happened really on the FTSE. I do have to thank the fat fingered oaf at HSBC though who spiked the price up to my short order at 6550 before price returned back to 6520 for some nice profit. The bulls tried again but still failed to break that 6474 level, not quite reaching the 6578 mentioned in the afternoon yesterday on the email. shame really as it dropped back to 6530 again! With today’s pivot at 6538 and looking at an open below that we might see some downside today. 15650 still beckons for the Dow, and that may coincide with a double bottom 6490 on FTSE. I still expect 6460 before too long though.
Asia Overnight from Bloomberg
Japan’s Topix index fell as the yen strengthened against the dollar, with the equity gauge capping its largest monthly decline since May 2012.
The Topix index slid 0.3 percent to 1,220.64 at the close in Tokyo. The measure dropped 3.5 percent this week and 6.3 percent for the month as weak economic data from China and a sell-off of emerging-market currencies sparked a global equities rout. The Nikkei 225 lost 0.6 percent today to 14,914.53. The yen gained 0.3 percent to 102.46 per dollar, poised for its steepest monthly rise since April 2012.
“It’s hard to tell just how far the chaos from the emerging-market currencies will spread globally,” said Yoshihisa Okamoto, the Tokyo-based head of equity research at Mizuho Asset Management Co. “In the FOMC statement, the Fed didn’t suggest there’s concern about emerging markets, and that’s causing unease among investors.”
The Federal Open Market Committee this week left unchanged its statement that it will probably hold its target interest rate near zero “well past the time” that unemployment falls below 6.5 percent, “especially if projected inflation” remains below the committee’s longer-run goal of 2 percent. The U.S. central bank said it will cut monthly bond purchases by a further $10 billion to $65 billion.
Futures on the Standard & Poor’s 500 Index sank less than 0.1 percent. The U.S. equity measure rose 1.1 percent yesterday erasing this week’s loss, as earnings topped estimates at companies from Facebook Inc. to PulteGroup Inc. and consumer spending climbed. The index had lost 1 percent the previous day as the Fed decided to cut monthly bond purchases by $10 billion.
Exporters fell. Toyota lost 1.3 percent to 5,922 yen. Nikon Corp. (7731), a camera maker, declined 2.1 percent to 1,769 yen.
Toshiba retreated 7.5 percent to 432 yen after posting third-quarter operating profit of 47.8 billion yen ($467 million). Analysts surveyed by Bloomberg had expected 72.5 billion yen.
Fujitsu surged 13 percent to 578 yen, the largest one-day gain since May 2009. Third-quarter net income of 12 billion yen topped the 7.9 billion yen estimate of analysts surveyed by Bloomberg.
6574 seems to be the line ion the sand still and the level that the bulls need to break, and if so then 6614 and 6662 are the likely resistance points. Today’s pivot is 6538 where we are slightly below as I write this, so that may act as initial resistance, for a dip to 6524. If that were to break then the double bottom at 6490ish looks possible. I am still mindful of 2 levels – the 6460 support, and the weekly scenario posted last year which had a drop to 6200. There is no really decent channel on the 30 minute chart at the moment, though the 10 minute has support at 6520 and resistance at 6545/50ish for an initial channel.
The bulls really need to get prices above 6650 to invalidate the drop potentials, but I think another dip is on the cards first, probably to the 6460 area.