Good morning. A little frustrating that the bears didn’t drive the price down to the 6570 area for a decent bounce potential, instead only managing 6600 before the buy the dippers came in. Still, the early long from 6620 came in OK so cant be greedy! It feels like we are just slowly drifting down with the various bits of uncertainty in the air – Ukraine/Russia, and a slowing China (more negative news out last night from them, with weakened industrial output growth and cooling retail sales). It has been known though for a slow drift down to be sharply corrected up so we could well see some lows in the not too distant future. Was thinking 6570 FTSE and 1852 S&P would be that level…
Asia Overnight from Bloomberg
Asian stocks trimmed a rebound, with gauges in Hong Kong and Tokyo reversing, and copper declined as China reported slower-than-estimated growth in industrial production, retail sales and fixed-asset investment. Gold increased and the yen advanced a fourth day.
The MSCI Asia Pacific Index climbed 0.2 percent by 3:02 p.m. in Tokyo, paring a rebound of as much as 0.6 percent after its biggest loss since Feb. 4 yesterday. The Hang Seng Index erased a gain of 0.6 percent in Hong Kong and the yen rose 0.1 percent after China’s data. Standard & Poor’s 500 Index futures rose 0.3 percent. The currencies of South Korea, Malaysia and Indonesia rallied versus the greenback, while the Aussie surged 0.7 percent. Copper dropped 0.7 percent and gold traded near a six-month high.
China said industrial output expanded 8.6 percent through January and February, less than the 9.5 percent estimate of analysts surveyed by Bloomberg, underscoring fears of a slowdown that’s fueled a rout in global equities and industrial metals. Premier Li Keqiang pledged to control systemic risks in the financial system and provide a stable environment for growth at the conclusion of China’s annual meeting of lawmakers today. Simmering tensions over Russia’s incursion into Ukraine’s Crimea region helped push wheat into a bull market yesterday.
“The markets are very fragile around China,” Peter Esho, Sydney-based chief market analyst at Invast Securities Co., said by phone. “Both industrial production and retail sales numbers today are soft, but not as bad as they could have been.”
FTSE Outlook
I am feeling a buy the dip day today and as such have put 3 possible long entry points below. As mentioned above I was hoping for the 6570 area yesterday which would have been a good entry, but alas it wasn’t hit. The S&P has had a solid bounce of the bottom of the 20 day Raff channel in the end, at 1854 (also just missing the lowest target 1852 mentioned yesterday), and now looks like it could get as high as 1920.
With regard to the FTSE the key resistance level to break initially will be the top of the channel on the 30 minute, sitting at 6660. Break that and 6700 and 6729 (top of the 10 day Bianca channel) are looking likely.