FTSE 100 Support 6642 6624 6609 6600 6582 6548
FTSE 100 Resistance 6660 6673 6690 6693 6737

Good morning. Was a bit of a shame that the bulls didn’t quite manage to reach the 6700 and 6717 areas yesterday before the bears appeared and drove the FTSE down to 6630. Decent support there though that has been tested twice – the next test is likely to break and we should see the 6600 level. We have a 9.6 dividend today so we will more than likely see a rise towards the close – usually starts around 4pm though some weeks has started earlier.

Buying a one touch binary can work well if you buy it early in the day if the FTSE dips, and be a lower risk way of being long for any rise later in the day. Say the price is around 6615 at 3pm, buy the binary for the “FTSE 100 to touch 6650” which will probably be fairly cheap at that stage and leave it till it expires at 4:30pm or close just before.

US & Asia Overnight from Bloomberg

• Disappointment in Japan fiscal package also drives declines
• U.S. crude halts decline before report on stockpiles

Asia stocks extended their drop as oil’s selloff revived concerns over global growth and after Japan’s fiscal stimulus package fell short of what some investors had expected. High-yielding currencies retreated.

Japan’s Topix index slipped for a third day after the yen, which typically moves at odds with local shares, jumped 1.5 percent last session. Crude halted losses below $40 a barrel before an update on U.S. oil inventories, while gold was near its highest price since July 11. The Malaysian ringgit and New Zealand’s currency slid at least 0.6 percent versus the dollar.

A four-week advance in global equities has faltered as crude descended into a bear market. With investors looking to central banks and governments around the world to shore up growth, Japan’s announcement Tuesday that it would boost spending by 4.6 trillion yen ($45 billion) in the current fiscal year failed to ignite optimism that Prime Minister Shinzo Abe can revive the world’s third-biggest economy. The Bank of England is projected to cut rates Thursday.

“After all the build-up, it’s a disappointment,” Shane Oliver, a global investment strategist at AMP Capital Investors Ltd. in Sydney, which manages more than $110 billion, said by phone, referring to Japan’s fiscal stimulus announcement. This will be negative for Asian stocks Wednesday, “reflecting the negative response we’ve already seen in the U.S. and Europe overnight,” he said.

A slew of services purchasing managers’ indexes were due Wednesday, with figures from China showing a slower pace of expansion in July than in June. Thailand is projected to hold benchmark rates in a policy review.

Stocks

The MSCI Asia Pacific Index fell 1.3 percent as of 12:41 p.m. Tokyo time, set for its lowest close in almost a week, as all 10 industry groups declined.

Australia’s S&P/ASX 200 Index slipped 1.1 percent amid losses in banks. The Kospi index in Seoul slid 0.7 percent. Hong Kong’s Hang Seng Index sank 1.7 percent as trading resumed after the market was shut on Tuesday because of a storm. The Topix lost 1.5 percent, and is down more than 3 percent this week.

“A risk-off mood is coming to the forefront,” said Chihiro Ohta, a senior strategist at SMBC Nikko Securities Inc. in Tokyo. “In Japan, where many companies, especially in the auto sector, are easily affected by currency moves, the strength in the yen weighs on the overall profits for listed firms.”

E-mini futures on the S&P 500 retreated 0.1 percent to 2,150.50 after the underlying index slipped 0.6 percent Tuesday, led lower by retailers and industrial stocks. The S&P 500 Index notched its first back-to-back declines since the aftermath of the U.K.’s decision to quit the European Union.

Currencies

The yen weakened 0.3 percent to 101.19 per dollar, after touching 100.68 on Tuesday, its strongest level since July 11.
The government’s plan incorporates 13.5 trillion yen of fiscal measures — including 7.5 trillion yen in new spending starting this year, and 6 trillion yen in low-cost loans.

The Bloomberg Dollar Spot Index, a gauge of the U.S. currency against 10 major peers, added 0.1 percent, after sliding 0.6 percent in the previous session amid waning bets on the Federal Reserve raising interest rates in 2016.

The kiwi retreated 0.6 percent to 71.97 U.S. cents after jumping 1 percent last session, while the ringgit declined 0.7 percent.
Bitcoin fell after one of the largest exchanges halted trading because hackers stole about $65 million of the digital currency. Bitcoin lost 3.7 percent against the dollar, bringing its three-day drop to 17 percent.

Bonds

Australian notes due in a decade yielded 1.93 percent, up 11 basis points after they slid to an all-time low on Tuesday. The Reserve Bank of Australia delivered its second quarter-point cut for 2016 that day, taking the cash rate to a record-low 1.5 percent, as expected by a majority of economists and investors.

Yields on 10-year New Zealand debt added four basis points to 2.2 percent, while rates on similar maturity Treasuries held at 1.56 percent, following a two-day advance of about 10 basis points.

Bill Gross, the former chief investment officer of Pacific Investment Management Co., reiterated his warning on government debt Tuesday after yields touched all-time lows in the past month. The danger of the unprecedented rally, as Gross sees it, is that any reversal will be painful for investors.

Commodities

West Texas Intermediate crude added 0.6 percent to $39.76 a barrel, after falling 5 percent over the past two sessions.

“The decline is not totally unexpected, but the speed and severity of the fall has been a surprise,” said Daniel Hynes, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Sydney. “Disruptions tightened the market during the second quarter and the sustainability of those was always going to be relatively short lived. There are still relatively high inventories but the market is approaching a balance.”U.S. oil inventories dropped by 1.34 million barrels and gasoline stockpiles fell, the American Petroleum Institute was said to have reported. Government data out Wednesday is forecast to show crude and motor fuel supplies decreased.

Gold for immediate delivery was little changed at $1,363.25 an ounce. [Bloomberg]

FTSE 100 Outlook and Prediction

The biggest news will be the US ISM at 3pm, while the largest dividend for a while on the FTSE 100 at 9.6 will more than likely see some buyers at the close. Worth watching it from about half 3 to see when it starts to move upwards. Next weeks dividend is 36 points so will have an even bigger effect. However, if you are holding a short at the close (or whenever your broker adjusts for the divi) bear in mind that your account balance will be effected. Some more info here

So, for today we have the daily pivot at 6660 for initial resistance then the 2 hour chart has some at 6673. Above this 6690 is R1 and 6693 is the 200ema on the 30min. So there are a few resistance levels in play too start the day off, and the bears will be keen to push on with the declines from 6770, and break below 6630. If they do that opens up 6600, but there is still decent support around that area with S1 and the 10 day Raff at 6624, and then the 25ema on the daily at 6609.

For today I am expecting an initial rise that may well falter around the 6673 area, then a decline to test those lower supports, before a divi driven rally towards the close. The FTSE held up pretty well yesterday really, as the S&P and Dax looked a lot weaker. Could be an interesting day today as it feels like we are starting to get more bearish overall after that Brexit rally of just over 1000 points.