Good morning, the 6660 level has held for the moment but we had a very flat day yesterday, consolidation really after the rise on Tuesday. I still expe3ct just one more high before we start a down leg, and probably a retest of the 6720 area. FTSE has held up pretty well overnight and regained 6690 as I write this. we have jobs news out in the US at 1330 today and a few other bits so we will get some volatility around then. tomorrow see UK GDP news released which I think will be fairly positive. Talking of news, as you probably saw, news broke last night that the US had been bugging Merkel’s phone – that went down like a lead balloon! Looking at the daily chart, the 10 day Bianca channel is very narrow with the top at 6747 and the bottom at 6686 so I expect that to break sometime soon, and then the 20 day to come into play. I am leaning slightly towards the bottom of that channel breaking once we retest 6720 or maybe slightly higher – so still cautiously bullish for the moment.
Asia Overnight from Bloomberg
Asian shares fell for a second day as a surge in China’s money market rates overshadowed manufacturing that beat economist estimates. The Australian dollar rallied with crude oil and metals.
The MSCI Asia Pacific Index lost 0.2 percent by 1:09 p.m. in Tokyo. Standard & Poor’s 500 Index futures advanced 0.3 percent and FTSE 100 Index contracts climbed 0.4 percent. New Zealand’s dollar and Australia’s currency each gained 0.3 percent. The S&P GSCI Index of 24 commodities added 0.2 percent, rebounding from a 10-week low, as crude, silver and copper increased at least 0.5 percent.
The preliminary 50.9 reading for a private manufacturing gauge in China compared with a 50.4 median estimate from analysts surveyed by Bloomberg News. China’s benchmark money-market rate jumped the most since July for a second straight day as the central bank refrained from adding funds to the market. The euro zone reports factory output today and the U.S. issues jobless claims.
“China’s economy is still on course for decent growth, not the kind of spectacular growth that we were used to in the past but enough growth to keep it above the government’s bottom line,” Louis Kuijs, chief China economist at Royal Bank of Scotland Group Plc in Hong Kong, said on Bloomberg Television. “They would like to see rebalancing over time.”
S&P
S&P 500 index (SPX) futures signaled the gauge may rebound after yesterday falling 0.5 percent from a record. Earnings have beaten analyst estimates at 76 percent of the 182 companies in the S&P 500 that have released their results so far this reporting period, while 51 percent exceeded sales projections, data compiled by Bloomberg show. Dow Chemical Co. and McKesson Corp. are among index members scheduled to report results today.
FTSE Outlook
So, onto the FTSE. Today’s pivot and yesterdays close are both 6675, and with the daily trends still up I think we will still make one more high before we get that down leg. I imagine quite a few went bearish yesterday so Mr Market might want to stop a few out today. I have resistance at 6703 initially today so expect a dip from this level, to probably that pivot level. The bulls made hard work of it but defended the 6660 level yesterday though admittedly not with much conviction. Overnight has been a little stronger, helped by some positive China Manufacturing news. I am still cautiously bullish, not keen to load up large longs at these levels and am starting to swing to bearish for the next few weeks.