Good morning, the FTSE felt like it spent most of the day doing not a lot yesterday with a slow drift up after nearly getting to the 6736 are (it stopped at 6746) and then proceeded to take all day till 9pm to hit the 6790 area I was waiting for! Since hitting that level we have dipped a little but it doesn’t feel too bearish just yet. There is still a possibility of 6815, maybe even 6830 before it really kicks in but the general vibe is that all is good at the moment. Just need the press to start getting bullish and a few articles about now being the time to buy shares for the year-end rally and that will be the catalyst for the dip! 6815 is the top of the 10 day Bianca channel so worth a short today if seen. 6753 is support so if that breaks then the bears could start to gain some control. Feels like they are still hibernating at the moment!
Asia Overnight from Bloomberg
Asian stocks outside Japan dropped for a fourth day before China’s leaders meet to map out the nation’s economic policies. Australia’s dollar weakened while copper snapped three days of losses.
The MSCI Asia Pacific Excluding Japan Index slid 0.3 percent by 2:24 p.m. in Tokyo, poised for the longest stretch of losses in more than two months. Hong Kong’s Hang Seng Index fell 0.6 percent and the Shanghai Composite Index lost 0.5 percent. Standard & Poor’s 500 Index futures were little changed. Copper added 0.5 percent while natural gas declined for a fourth day. Australia’s currency weakened 0.4 percent versus the dollar and the yen climbed 0.2 percent.
China’s leaders will meet in Beijing Nov. 9-12 to discuss a blueprint for reform as the country heads for its slowest annual growth in more than two decades. Australia’s central bank kept its key rate at a record-low 2.5 percent today and said the currency was still “uncomfortably high.” The U.S. Institute for Supply Management issues its non-factory measure today.
“All eyes are on the third party plenum this weekend,” Tim Moe, a Hong Kong-based strategist at Goldman Sachs Group Inc., told Bloomberg Television. “The market has priced in a fair amount of expectation about this and therefore from a tactical standpoint, the market is vulnerable.”
USA
In the U.S., Federal Reserve Bank of Dallas President Richard Fisher said yesterday the nation should resume normal monetary policy as soon as possible. The Fed currently buys $85 billion a month of bonds to bolster the world’s largest economy and damp borrowing costs.
The ISM non-manufacturing composite index for the U.S. will drop to 54.0 for October from 54.4 the previous month, according to a Bloomberg survey of economists.
A government report Nov. 7 is forecast by economists to show the U.S. economy grew at a 2 percent annualized rate in the third quarter, compared with a 2.5 percent increase in the previous three months. Economists predict a report the next day will show payrolls climbed by 120,000 in October and the unemployment rate increased to 7.3 percent from 7.2 percent in the previous month, according to a separate survey.
FTSE Outlook
Today’s pivot is 6759 so I expect that to act as initial support, and with the lack of any major bear action off 6790 I expect that we may well break through 6800 early this morning. I have the top of the Bianca 10 day at 6815 though so I feel that a short there is a fairly decent bet. that said, as with the Dax, we are within a pretty decent ProTrend channel on the 30 minute chart, with the extremes at 6805 and 6763, so a long at the bottom of that range (and also the pivot) could also be a bet worth taking.