FTSE Support 6960 6942 6895 6848
FTSE Resistance 6960 6980 6981 6993 7010 7019 7021

Good morning I hope you had a good weekend. Fairly large out of hours spike overnight on the news Saudi will cut oil production was probably the final nail in the coffin for the shorters that have been mercilessly squeezed over the past week. Having sent the FTSE 100 spike up to 7020 (funnily enough bang on the 10 day Bianca channel) and drop back t 6974 where it closed Friday it was probably mostly the algorithms that had fun! Blow off top anyone? Could drop back now ready to spring up again nearer Christmas for the Santa Rally.

US & Asia Overnight from Bloomberg

Crude oil surged to the highest in 17 months as efforts to cut production boosted oil-linked currencies while weighing on debt. Chinese equities slumped the most in three months, while Japan’s Nikkei Stock Average erased losses for the year.

Oil in New York and London jumped more than 5 percent after Saudi Arabia signaled it will cut output by more than was previously agreed amid a weekend deal to tackle oversupply with competitors such as Russia. The dollar slipped, following a 1 percent advance over the previous two sessions, before an anticipated interest-rate hike from the Federal Reserve. Copper jumped while government bonds from Australia to America retreated. Shares in Shanghai slumped the most in three months as property companies declined.The oil deal has lit a fire under crude prices, exacerbating the pressure on bonds amid the implications for global price pressures. Strong U.S. economic data and Donald Trump’s election win have further stoked expectations the Fed will pull the trigger on Wednesday. The prospect of higher U.S. borrowing costs by the end of 2016 has bolstered the dollar while adding to a rout in government debt since the Nov. 8 election.

“As a statement to the world, OPEC has probably done all they could have possibly done,” said Chris Weston, chief market strategist in Melbourne at IG Ltd. “This is a very powerful message that producers want to balance the market higher. This is about as bullish as it gets.”
Markets in India and Thailand are shut for holidays. China may report on foreign direct investment, money supply and lending between now and Thursday. Retail sales and factory output are due Tuesday.

Commodities

West Texas Intermediate crude gained 4.7 percent as of 1:57 p.m. Tokyo time, climbing to $53.92 a barrel as Brent added 4.2 percent to $56.60. Both are headed for their highest settlement prices since July last year
The deal between OPEC members and outside nations, including Russia, was agreed at a meeting in Vienna at the weekend. It should usher in the first global petroleum cuts in 15 years and covers about 60 percent of the world’s output
Copper futures rallied as much as 1.4 percent in New York, before paring gains to 0.8 percent
Gold fluctuated, trading down 0.2 percent in the spot market at $1,157.14 an ounce

Stocks

The MSCI Asia Pacific Index was down 0.3 percent, even as energy shares climbed 0.7 percent. Technology companies fell the most as a group
Shenzhen shares tumbled 3 percent and the Shanghai Composite Index lost 2.1 percent as curbs on insurers’ stock trading and concern about the outlook for the property market spurred selling. Hong Kong’s Hang Seng Index slipped 1.1 percent
The Nikkei 225 Stock Average jumped 1 percent, erasing losses for the year, while Japan’s Topix index gained 0.4 percent, paring an earlier rally of 1.2 percent
S&P 500 Index futures were little changed
Banks and technology shares drove the S&P 500 to a 3.1 percent climb last week, with the U.S. benchmark reaching successive all-time highs as the Dow Jones Industrial Average also rose to records

Currencies

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, slipped 0.1 percent after gaining 0.5 percent on Friday to finish the week higher. The greenback dropped more than 0.4 percent against the Mexican peso, Canadian dollar and Norwegian krone
The Korean won retreated for a second session, losing 0.2 percent amid concern the political instability sparked by President Park Geun-hye’s impeachment could hurt the economy
The Turkish lira tumbled for a third day, slumping 0.9 percent after twin bombings in Istanbul on Saturday killed 38 and wounded more than 150 people

Bonds

Yields on Australian bonds due in a decade added four basis points, or 0.04 percentage point, to 2.86 percent, while those on New Zealand debt added four basis points to 3.31 percent
Ten-year Treasury yields rose two basis points to 2.49 percent, after climbing eight basis points last week
[Bloomberg]

FTSE 100 Outlook and Prediction

We have had a large move up overnight that has since retraced, from exactly the top of the 10 day Bianca channel at 6721. I think we may well try to push up again initially, but can see a dip down towards 6850 on the cards before the “Santa Rally” proper begins. The rises over the past week will have stopped out most of the shorters now, most people will be thinking now is the time to go long, so the market will probably turn to squeeze them at some point soon.

For today, we have resistance at 6980, 7020, 7070 with support at 6960, 6942 and then S3 and the 200ema on 30minute chart at 6890. Bigger picture support is 6850, and as mentioned I think any test of this is likely to hold to start off the Santa Rally. Which could us all the way back to the 7130 level and beyond. Brexit and Trump jitters? What were they?