Good morning, well yesterday worked out exceedingly well didn’t it with the drop to 6565 then long. I am still running this long and have held overnight, the stop was moved to 6575, but I have now brought that up to 6582 – just below yesterdays close in case the FTSE goes for the gap, and below today’s pivot at 6584. With the price now above 6605 I think we should be on for the 6640/50 area as per the trade target. If possible keep taking profit as the trade goes for you. New Fed Chair Janet Yellen speaks today so should set the tone for her tenure – in fact her speech today could have a fairly bullish effect (here’s hoping anyway!). we do appear to have a slight bullish breakout going on the daily chart, with prices getting above the 20 day Bianca channel (6597), but with the 10 day channel top at 6630, our long does still look good. I am expecting today to be bullish but then that to start waning and a bearish end of the week.
Asia Overnight from Bloomberg
A gauge of Asian stocks outside Japan rose, heading for its biggest advance since November, before Federal Reserve Chairman Janet Yellen delivers her first testimony on monetary policy.
The MSCI Asia Pacific excluding Japan Index advanced 1.1 percent to 449.36 as of 1:30 p.m. in Hong Kong. The regional gauge has climbed 3.3 percent from a five-month low on Feb. 5 as equities rebounded from a global rout. Yellen will speak on monetary policy and the outlook for the economy today for the first time since being sworn in as the central bank’s head. Japanese markets are closed for a holiday.
“With U.S. employment data materially deteriorating, there is a building argument that the Fed should ease off tightening monetary conditions,” Gary Dugan, who helps oversee about $53 billion as Singapore-based chief investment officer in Asia and the Middle East for Coutts & Co., the wealth management unit of Royal Bank of Scotland Group Plc, wrote in an e-mail yesterday. “We suspect that Yellen would not want to significantly change policy at her first meeting in March.”
The gauge of Asia-Pacific equities outside Japan dropped 5.2 percent in January for its worst start to a year since 2010 amid concern about the Fed’s stimulus cuts, China’s slowdown and volatility in developing markets. Global equity losses in 2014 peaked at $3 trillion on Feb. 4 and have since narrowed to $1.4 trillion, data compiled by Bloomberg show.
S&P Futures
Futures on the Standard & Poor’s 500 Index gained 0.3 percent today. The equity benchmark rose 0.2 percent yesterday, extending gains for a third day, amid optimism that economic growth is robust enough to weather central bank stimulus cuts.
Fed Stimulus
The Fed has already decided to slow the pace of its asset-purchase program twice, reducing its monthly buying of bonds to $65 billion from $85 billion. A Feb. 7 report from the Labor Department showed that payrolls rose by a less-than-projected 113,000 in January, while the unemployment rate unexpectedly dropped to the lowest level in more than five years.
FTSE Outlook
Well the long from yesterday is still running and looking good, though I think the 6633 top of the 10 day Bianca area could create a bit of a wall; after that the 6650 area is more major resistance. Should those break then 6700 is likely to be reached, but as mentioned above I don’t think the bull will continue for long, in fact I think the end of this week might see some more major bearishness. While the FTSE holds above 6597 then those upside targets are viable, however if the bears start today then a break below that leads to 6546 then 6500. I think a bigger better short is 6730 – top of the 10 day Raff channel and could be on for a 500 point drop. If it reaches this level I will short on a futures contract.
I have plotted a dip to the 6597 area then another bounce. I went for the dip as we are just hitting that ProTrend line on the 30 minute channel. Obviously with my long still running I am hoping it just keeps rising though!
I think an initial rise to 6630, then a dip to 6605 then further rises. 6630, is a decent looking 10 minute channel top.