Good morning. Well the FTSE was dragged down by the mining sector yesterday despite the rest of the world holding up pretty well. The Dax stayed above 9300, the S&P above 1800 yet the FTSE slowly dropped all day, scuppering my 2 longs at the pivot and the 6655 support. We actually; reached my lowest support level at 6628 which has held since and overnight hovered around that level. I did think the 6655 trade was going to be ok as after it fired prices did bounce to 6666, but then stalled. Slightly weaker than forecasted US consumer confidence news out yesterday didn’t have to much effect on the S&P either.
Following the mention of Gold on the past 2 emails, it seems quite a few of you trade that and are interested in my thoughts. I don’t trade it very often but that 1228 support levels has continued to hold for the moment. it stumbled at the resistance level mentioned yesterday at 1253, however, I think it could experience a bounce still and if that breaks potentially hit 1268, possibly even 1303 where we have the coral line. The key level for today is 1262 – if it can break and hold above that then I think its going to remain slightly more bullish for the short term.
Asia Overnight from Bloomberg
Oil fell, with U.S. prices slipping for a fourth day, after an industry report showed crude supplies rose for a ninth week. Chinese stocks rallied and the euro strengthened, while Indonesia’s currency declined.
Crude inventories in the U.S., the world’s biggest oil consumer, increased by 6.9 million barrels last week, the American Petroleum Institute said yesterday, ahead of a government report expected to show oil supplies in the nation increased. Japanese airlines flew through an air-defense zone claimed by China and disputed by Japan today after U.S. unarmed B-52 bombers entered the area. U.S. jobless claims probably increased from an almost two-month low as consumer confidence in the nation unexpectedly dropped.
“Data on balance still looks murky,” Matthew Sherwood, head of investment markets research in Sydney at Perpetual Ltd., which manages about $25 billion, said by e-mail. “Most importantly, there was a surprise decline in the Conference Board’s measure of consumer confidence.”
The MSCI Asia Pacific Index was little changed. Chinese stocks gained 0.9 percent, with those in Hong Kong adding 0.7 percent as the city’s benchmark Hang Seng index headed for its highest close since April 2011.
Consumer Confidence
The Conference Board’s confidence index fell to 70.4 from a revised 72.4 a month that was stronger than initially estimated, the New York-based private research group said yesterday. The median forecast in a Bloomberg survey of 78 economists called for a November reading of 72.6.
Initial claims for U.S. unemployment benefits probably rose to 330,000 in the week to Nov. 28, after falling to the lowest level in almost two months in the previous period, according to the median of 44 economists’ estimates compiled by Bloomberg.
FTSE Outlook
I think that the 6628 level mentioned as a support yesterday is still key for today and in fact the bottom of the 10 day Raff is at that level too, as well as the 10 day Bianca. With the FTSE dropping but nothing else yesterday we could see a rise today, especially if the mining sector climbs. This area could therefore attract the swing traders who would go long and hold for a few days. We should also have a little bit of consolidation after a trending down day, with a slight bullish hint.
If the 6628 level holds then I expect we will get a rise towards the daily pivot at 6656 (and yesterday’s brief support area). If that breaks then the next target is 6685, then 6711. These are the levels to watch today. The 10 day channels have been pretty reliable so I expect that the bottom of them will hold at around the 6625/30 area, even if tested again later; however should they break today then 6607 and 6582 are supports.