Good morning. The breaking of that support yesterday and flipping to a short paid off. I took half off at the bottom of the Raff channels around 6330, and just as well as we then had a really good bounce…. that didn’t last long! Volatile? Just a bit! The bottom of the Raffs today are 6250 and 6230, and with the pivot at 6382 as initial resistance we might well see them. Most of the news flow at the moment is pretty negative so that will probably swing to more positive news in a week or so, though Oil continues to drop, weighing on the FTSE. The Bianca chart is back updating now, and the 10 day channel bottom is 6321, so thats decent support, whilst resistance is 6420.
Asia Overnight from Bloomberg
Asian stocks fell, after yesterday sinking the most in nine months, as U.S. equities extended declines and the slump in crude oil deepened.
The MSCI Asia Pacific Index (MXAP) declined 0.3 percent to 134.57 as of 9:03 a.m. in Tokyo, with energy companies dropping the most. The Asian gauge slumped 1.7 percent yesterday and the Standard & Poor’s 500 Index fell for a fifth day, extending the longest losing streak in 13 months. West Texas Intermediate oil sank below $48 a barrel in New York amid speculation data on U.S. supplies today will fuel concern over a global glut.
“With the U.S. markets again under pressure, the lead for Asia looks bleak,” Evan Lucas, a markets strategist in Melbourne at IG Ltd., wrote in an e-mail to clients today. “Until oil finds bottoms, the markets will remain in a downward trajectory.”
Japan’s Topix index dropped 0.5 percent. Short-selling on the Tokyo Stock Exchange reached 37.8 percent of total trading value yesterday, the highest since at least October 2008, when bourse data became available.
South Korea’s Kospi index fell 0.2 percent. Australia’s S&P/ASX 200 Index slid 0.6 percent, while New Zealand’s NZX 50 Index lost 0.2 percent. Markets in China and Hong Kong have yet to open.
The Shanghai Composite Index (SHCOMP) gained less than 0.1 percent yesterday to extend a five-year high. China’s equity benchmark index rallied 53 percent in 2014 amid speculation the government will take steps to boost growth in the world’s second-largest economy.
A correction in mainland shares will occur “sooner or later” as investors will look for strong earnings growth to support the rally’s momentum, Ted Pulling, chief investment officer of the Pacific Regional Group at JPMorgan Asset Management, said yesterday.
FTSE Outlook
The 2 main levels I am looking at today at support at 6321 and resistance at 6423. The resistance is the top of the 30 minute down channel that we are in at the moment, whilst the support comes from the 10 day Bianca. If that breaks then I expect a dip to 6290, and maybe even the bottom of the Raffs at 6250 (10 day) and 6223 (20 day). Trades off both those levels are worth a go and see how it plays out. Initial resistance though come from the pivot at 6382 – pretty much where we are as I write this, hence the little initial down arrow I have plotted to start off, down to that major PRT line at 6363. If the bulls were to come out to play today then above 6423 looks like 6475, 6514/24 (this is the 25ema on daily, and also the top of the 10 day Raff). A short at 6524 could be good if it got that high (doubt it though!). If the volatility continues today then we may see those 2 main levels break, in which case, trading that break (as we did yesterday with the short from 6363) should work out fine.