Well, I’m still bearish!

Good morning. I hope you all had a good day yesterday which failed to break the Bianca channels. After the pre market rise to 6525 it was downhill most of the day with a pretty decent low at 6435. The Bianca channels are holding the bulls back for the moment, aided of course by the still lingering possibility of military intervention in Syria and eyes starting to look toward NFP on Friday. That said, the 10 Bianca is heading up a bit more now so maybe all is not lost for the bulls and we have had the 6393 level hold very well on two tests. Of course, a third test is likely to fail and we could be on for a 6080 level. A lot will depend on NFP on Friday and I think we will see quite a lot of volatility around this news this week. The Raff channels are still heading down with resistance around the 6525 and 6555 levels.

Asia Overnight from Bloomberg

Asian stocks fell, snapping the longest rally in three weeks, and emerging-market currencies weakened on concern the U.S. is moving closer to striking Syria. Australia’s dollar gained after the nation’s economic growth topped estimates, while crop prices declined.

The MSCI Asia Pacific Index dropped 0.2 percent as of 1:25 p.m. in Tokyo, falling for the first time in five days. Stock indexes in the Philippines and Indonesia sank 1.9 percent. Standard & Poor’s 500 Index (SPX) futures were little changed. South Korea’s won declined from a four-month high versus the dollar, while India’s rupee lost 0.6 percent. The Aussie climbed to a two-week high. Soybeans slid 0.9 percent.

U.S. House of Representatives Speaker John Boehner backed President Barack Obama’s call for action against Syria and leaders of the Senate’s foreign relations panel agreed on a proposal backing military strikes. Australia’s economy expanded 0.6 percent in the second quarter, data showed. Markit Economics will release its euro-area services report today while the Federal Reserve publishes the economic outlook survey known as the Beige Book. Data due Sept. 6 may show U.S. nonfarm payrolls increased 180,000 in August.

“Markets don’t like wars occurring and are concerned about the intervention that could potentially occur in Syria,” James Lindsay, who helps oversee about $21 billion as a fund manager in Auckland at Tyndall Investment Management Ltd., said by phone. “We’re taking a little bit of risk off the table.”

US

The S&P 500 pared gains and oil extended an advance yesterday after Speaker Boehner, an Ohio Republican, said that use of chemical weapons requires a response and only the U.S. has the capability to “warn others around the world that this type of behavior is not going to be tolerated.”

The Senate Foreign Relations Committee will vote on the draft resolution approving military action in Syria as soon as today, the panel’s Chairman Robert Menendez said.

Dax

Near term, further movement below 8150 has the potential of 8127 with secondary, if exceeded, at 8070 points which may prove to be something of an ultimate bottom in the medium term. If it opens up above 8223 I expect a day of gentle relaxation toward 8170.

Outlook

ftse 100 prediction
ftse 100 prediction

I have plotted the arrows for the rise to the 6495 area before more downside. The EMAs are ok for a little bit more upside but sentiment is still for downside, however (why is there always a however with trading?) the bulls certainly bought the dip yesterday. I have also plotted the possible pink arrows, which is a rise to test the top of that 30 minute channel. Based on my trade plan below as you can see I am still fairly bearish for the moment. To get me bullish in the short term the market needs to move and hold above 6495. Looking to the S&P, its hitting resistance at the 1644 area and support at 1627 which If broken could also be seeing a downside risk, possibly to sub 1600!