Good morning. A better day yesterday that played out pretty well, despite not dipping down to the target area at the start. Short from 6465 then long 6430 worked out well, though the last leg was tempered a bit by the US, stalling at 6480, rather than reaching the 6510 area.
For today the bulls will want to hold that overnight low at 6416, and need to exceed 6480 to get some momentum (6485 is the top of the 10 day Bianca channel). We got the bounce yesterday, though today’s pivot at 6448 might be an initial stumbling block.
Quite a bit of news out today but nothing really market moving, the main one will be the 09:30 PMI, forecasted at 59 versus 58.8 previously.
Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index rebounding from its biggest slump since June, after U.S. shares advanced d and Japanese companies posted earnings that cheered investors.
The MSCI Asia Pacific Index climbed 0.5 percent to 130.87 as of 1:29 p.m. in Tokyo, after plunging the most since June 20 yesterday. U.S. equities rebounded as 21 of 24 emerging-market currencies advanced against the dollar and data showed factory orders fell less than estimated in December.
“The market is breathing a sigh of relief,” said Masaaki Yamaguchi, equity market strategist at Nomura Holdings Inc., Japan’s biggest brokerage by market value. “Confidence is coming back after emerging-nation currencies stabilized and U.S. data weren’t as bad as expected. The U.S. rebound gave a good reason for the market to rise after slumping.”
The MSCI Asia-Pacific gauge plunged 4.6 percent in January for its worst start to a year since 2009 as the Federal Reserve pressed ahead with cutting stimulus even amid concern over China’s economic slowdown and volatility in developing markets.
S&P Futures
Futures on the Standard & Poor’s 500 Index slid 0.3 percent today. The measure gained 0.8 percent yesterday, rebounding from a three-month low as investors assessed corporate earnings. Data from the Census Bureau yesterday showed factory orders slipped 1.5 percent in December, compared with the average economist estimate of a 1.8 percent decline in a Bloomberg survey.
FTSE Outlook
I have put a brief expectation at the top of this email but there are some resistance levels not that far away – the pivot at 6448 then the 10 day Bianca channel top at 6485. The bottom of the 10 and 20 day Bianca channels are quite far below so if 6400 breaks I expect that we will see that 6326 (10 day) and 6345 (20 day). If we get an initial dip and 6400 does hold then the bulls might gain some momentum to take the price to 6479 and possibly the top of that 30 minute channel at 6500. There is also the bottom of that 30 minute channel at 6365, a level that might be worth a long if it gets below 6400. If the bulls can gain that momentum and break 6479 then 6515 and 6580 are possible upside targets.
Generally then I think a dip and rise. Its been quite weak overnight again, dropping off the 6480 area, the 30 minuet coral and ema’s are bearish still, however 6400 is likely to be defended. But should it break then I think that 30 minute channel is a good one to trade off.