Good morning. Thanks for all the comments posted on the site by everyone, its great that we all help each other out in what is a very hard pastime, despite what you read about how to make millions doing 10 minutes a day. On that note, please can you refrain from boasting about how much money you make and stake per point. Its all relative and doesn’t really mean anything and I feel that it helps the community spirit by talking analysis and strategy rather than shouting “loads a money” while twanging your red braces. Mostly it just pi**es everyone off!
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I think its fairly safe to say that the 6480 level held on Friday… Big question is whether this is the start of the Santa Rally or not, and certainly the decent NFP news on Friday added fuel to the rally and that scenario. In that case, good news was good! We could still be on track for the 6800 year end close. Seems a bit of confidence is returning that the global economy could actually support itself if stimulus is reduced. As indeed should be the case, and as the Fed have said all along, QE will only be reduced if the data (US and globally) supports it. Personally, I still think tapering will start at the beginning of Q2 2014.
Asia Overnight from Bloomberg
Asian stocks climbed after better-than-estimated data on U.S. jobs and Chinese exports. A gauge of Indian equities headed for a record close and the rupee gained as the nation’s main opposition party won state polls, while rubber advanced.
The MSCI Asia Pacific Index increased 0.7 percent by 2 p.m. in Tokyo, rebounding from the biggest weekly drop since August. Standard & Poor’s 500 Index (SPX) futures added 0.2 percent after the gauge snapped a five-day slump Dec. 6. India’s benchmark S&P BSE Sensex Index gained 1.8 percent and the rupee rose to its strongest level since August. Rubber futures jumped to the highest in more than two months, while natural gas gained as much as 1.5 percent in New York.
U.S. employers added more workers to nonfarm payrolls than economists had expected in November and Chinese exports climbed the most in seven months, spurring confidence that the global economy can withstand a reduction in Federal Reserve stimulus. India’s main opposition party is gaining momentum ahead of a 2014 national election, winning four local polls held over the past month. German industrial production rose 0.7 percent in October from a month earlier after falling 0.9 percent the prior month, according to economists surveyed before data due today.
“A solid payroll report boosted confidence that the U.S. economy is strong enough to withstand tapering,” Shane Oliver, who helps oversee $131 billion as head of investment strategy at AMP Capital Investors Ltd. in Sydney, said by e-mail. “Market valuations are reasonable, monetary conditions are set to remain very easy and profits will improve next year.”
U.S. Payrolls
U.S. employers added 203,000 workers to nonfarm payrolls last month, more than the 185,000 increase predicted in a Bloomberg survey. The jobless rate dropped to a five-year low of 7 percent.
The Federal Open Market Committee will probably start cutting its $85 billion in monthly asset purchases at its Dec. 17-18 meeting, according to 34 percent of economists in a Bloomberg survey conducted Dec. 6, up from 17 percent in a Nov. 8 poll.
China Data
China today reported inflation slowed more than estimated last month, after data yesterday showed export growth helped swell the nation’s trade surplus to $33.8 billion, the widest since January 2009. Outbound shipments rose 12.7 percent from a year earlier, topping projections from 41 of 42 analysts surveyed by Bloomberg News.
“China’s exports points to a recovery in the world economy,” Mark Matthews, the Singapore-based head of Asia research for Julius Baer, which oversees about $377 billion in client assets, said on Bloomberg Television.
FTSE Outlook
Resistance initially is 6573 which is the level we are looking at opening at, and after Fridays decent rise we are actually nearing the top of the 10 day Raff channel at 6605. The Bianca channel tops are also in play, having exceeded the 10 day at 6556 for today, the 20 day is 6624, so we may see some dipping from this sort of area. If it was to go really pear shaped for the bulls today (or this week in fact) then support is still at that 6480 level, but if that breaks then 6403 is likely. I think it might be a tad early for the Santa Rally to kick in, but you never know! Looking at the daily chart we do have a few resistances coming up soon that will need to be jumped to maintain that rally. Namely, a ProTrend at 6585, and then the Raffs and Biancas.