Good morning. What a perfect day yesterday that followed the prediction to a tee. Based on the emails I got I think most benefitted in some capacity. Only slight regret was closing the long around the 6500 area, only to see the US drag it higher. The trade plan had target 6515 then 6580 so well done anyone that held for both those targets. I wimped out far too early but the analysis was sound in the end! Still, combatting greed is one of the main things in spread betting. Hindsight is a wonderful thing…
Today is of course NFP day (forecast to be 180k vs 74k previously) so its going to be spikey at 13:30 today. Plus its Friday so a day to stay nimble or side-lined. Pretty bullish in the end yesterday though of course there is now the scenario where we are testing the top of the 20 day Bianca channel at 6604 for today. Looking at the daily Raff’s for FTSE, Dax and S&P below, you could say that we might have climbed a bit far too fast yesterday, as they are all at or near the top of the channels…. Looking at the FTSE I’d say a dip from this area is likely initially (6590 as I write)
Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index paring its sixth straight weekly loss, as U.S. jobless claims fell and investors weighed company earnings.
The MSCI Asia Pacific Index added 1.1 percent to 132.95 as of 12:48 p.m. in Tokyo with all 10 industry groups rising. The measure has pared its weekly drop to 1.4 percent.
“Fundamentals still look good and the global economy is expected to grow faster this year than it did last year,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about A$170 billion ($152 billion). “That’s a positive environment.”
Japan’s Topix (TPX) index rallied 1.7 percent after the yen dropped 0.7 percent against the dollar yesterday. South Korea’s Kospi index added 0.5 percent. Australia’s S&P/ASX 200 Index added 0.6 percent as the nation’s reserve bank raised its economic-growth and inflation forecasts. New Zealand’s NZX 50 Index advanced 0.6 percent as the market reopened following a holiday.
U.S. Futures
Futures on the Standard & Poor’s 500 Index advanced less than 0.1 percent today. The measure rose 1.2 percent yesterday, the biggest rally since Dec. 18, as claims for unemployment benefits fell and earnings from Walt Disney Co. to Akamai Technologies Inc. surpassed estimates.
Initial jobless claims dropped for the first time in three weeks, falling 20,000 to 331,000 in the period ended Feb. 1, according to the Labor Department. The median forecast of economists surveyed by Bloomberg called for a decrease to 335,000.
The Labor Department may report today that U.S. nonfarm payrolls grew by 180,000 last month after a 74,000 gain in December, according to the median forecast of economists surveyed by Bloomberg.
FTSE Outlook
The FTSE is just above the 20 day Raff channel and testing the 10 day as I write. Therefore I’d say that an initial dip from this 6590 area is likely initially, maybe as far down as support at the daily pivot at 6514, though that’s quite a drop I admit. Upside targets while prices remain above 6567 are 6653 and 6730. Lower support is at 6490 then 6432. I wouldn’t be looking to load up large long positions while the price is at the top of the daily channels, though as mentioned above with NFP its going to get spikey anyway.
The EMAs on the 30min chart are still in bullish mode so for any bearish action the price would need to break the 10ema, currently at 6576. There is a narrow 10 minute channel in play with resistance at 6590, and support at 6570.
An initial dip to 6570, if that holds as support then a climb to the 25 daily EMA at 6808 then further downside. We might see some profit taking ahead of the NFP (it wasn’t great last month so might repeat). A day to stay nimble anyway, I am not a big fan of trading too much on Fridays or around NFP – it always seems to behave a bit unpredictably. Its certainly tempering my bullishness the fact that we are testing the top of so many daily channels across the board.