Good morning. Thank you for all the emails and kind messages following my hospital visit. All went well and I was able to come home on the evening of the 24th so back home in time for Christmas. Still all looks good for the 6800 year end, possibly more. Obviously its going to be a pretty low volume day today so the price might be a little jumpy, and movements will be exaggerated.
Asia Overnight from Bloomberg
Asian stocks climbed with metals, while the yen weakened to a five-year low against the euro, on speculation the Bank of Japan will sustain monetary easing, while an improving U.S. jobs market allows the Federal Reserve to taper stimulus. China’s money market rates fell.
U.S. initial jobless claims declined more than forecast last week to 338,000, underscoring confidence as the Fed begins slowing its bond purchases amid improving economic data. Japanese Prime Minister Shinzo Abe drew criticism from China and South Korea by visiting a war shrine yesterday.
“The U.S. data has been coming in quite strong since the Fed decided to start tapering, while the market has expectations that in Japan stimulus could be increased,” said Etsuko Yamashita, the chief economist in New York at Sumitomo Mitsui Banking Corp. “A lot of people think dollar-yen will keep pushing higher.”
“Overall the U.S. recovery seems to be doing well,” said Andrew Sullivan, a Hong Kong-based director of sales trading at Kim Eng Securities. “There is the worry about the impact of export sales to China from Abe’s visit to the war shrine.”
“Given what’s happening in the U.S., the performance for Asian markets has been a little bit disappointing,” said Khiem Do, the Hong Kong-based head of Asian multi-asset strategy at Baring Asset Management Ltd., which oversees about $60 billion. “U.S. economic data continues to surprise on the upside whereas data in Asia is in line with expectations.”
U.S. consumer confidence climbed last week to a four-month high. The Bloomberg Consumer Comfort Index rose to minus 27.4 in the period ended Dec. 22, the fifth straight gain. The S&P 500 is up 29 percent in 2013, the most since 1997. A separate report showed Japan’s industrial production expanded less than economists forecast last month.
Today’s pivot is 6692 and as we are currently above that I expect that will act as initial support on any dip. After a decent bounce from the 6400 the bulls are still in control and the top of the 10 day channel on Bianca at 6761 is a likely target for today’s rise if there is one. After that the top of the 20 day Raff channel is 6820 so the next area to watch. We are above the 20 day Bianca channel at 6701, but with some Santa rally action and low volume we will probably stay above that for the moment.
The key level will be to hold above the 6725 resistance that we have had pencilled in for a while and is the thicker red line on the 30 minute chart below, preferably with a close above that today. There is a 30 minute channel with the bottom at 6680 and the top at 6750 which will be worth trading off if you are trading today