FTSE 100 resistance 6675 | support 6640 | Asia rises | Theresa May PM

FTSE 100 Support 6650 6637 6560 6489 6426
FTSE 100 Resistance 6676 6679 6683 6782 6784

Good morning. Seems like every slight dip gets bought up at the moment – the 6695 short started off pretty well, however it failed to reach the pivot area at 6650, instead bouncing back up from 6670 which held for most of the day. Late evening saw a bit more bearishness and for the first time in a while my 30min chart is showing some bearishness in terms of what the moving averages are doing. If the bears can break 6637 today then we might be on for a bit of a pullback (just as the press go mad announcing a new bull market – handy timing to suck in a few retail buyers). Todays big event will be Theresa May being announced as the new PM, whilst we await the Fed tomorrow and possible interest rate clues.

US & Asia Overnight from Bloomberg

Asian stocks rose toward their high for the year, copper gained and sovereign bonds fell as prospects for stimulus in some of the world’s leading economies spurred risk-taking. The pound strengthened before Theresa May takes over as the U.K.’s prime minister.

The MSCI Asia Pacific Index rallied for a third day after global equities returned to levels seen before the U.K.’s June 23 vote to leave the European Union. Japan’s shares led the gains as the government prepares measures to revive the world’s third-largest economy. The yen rose following its steepest two-day slide since 2014, while the pound advanced for a fourth day. Copper led industrial metals higher as iron ore climbed. Oil retreated after its biggest jump in three months, while Australian bonds fell for a fifth day.

Stocks globally have regained the almost $4 trillion in value that was obliterated in the days following the Brexit vote as investors bet officials in the world’s major economies will stem any fallout from the decision. Economists expect the Bank of England to cut interest rates on Thursday, while Japanese Prime Minister Shinzo Abe has ordered up more fiscal stimulus. Federal Reserve Bank of St. Louis President James Bullard said Tuesday he expects the U.K.’s EU decision to have near-zero impact on the U.S., where traders are pricing in less than 50 percent odds of an interest-rate hike this year.

“We could see more monetary stimulus and quantitative easing that will help boost global growth,” Jonathan Ravelas, chief market strategist at BDO Unibank Inc., said in Manila. “The party goes on but it is prudent for investors to re-balance their portfolios by taking some money out.”

China is due to report June trade figures on Wednesday, after Premier Li Keqiang said its economy maintained steady growth momentum in the second quarter and can achieve the annual target of at least 6.5 percent. Industrial output data for the euro area is also coming, while central banks in Canada and Malaysia are forecast to leave interest rates unchanged at scheduled policy reviews.

Stocks

The MSCI Asia Pacific Index climbed 0.9 percent as of 2 p.m. Tokyo time, moving to within 1 percent of its highest close this year.

Japan’s Topix index gained 1.3 percent, building on a 6.3 percent jump over the last two sessions. Abe has ordered his economy minister to compile stimulus measures this month, while the Sankei newspaper reported government officials are considering “helicopter money” as a policy option. The Topix pared its advance after Chief Cabinet Secretary Yoshihide Suga said such a policy, which involves the central bank directly financing government spending, was not being looked at.

Posco climbed to a one-month high in Seoul as increases in Chinese steel prices brightened prospects for South Korea’s largest producer. Yamaha Motor Co.jumped as much as 13 percent in Tokyo after the Japanese maker of motorcycles and boat engines was chosen to replace Sharp Corp. in the Nikkei 225 Stock Average. Sharp dropped 4.6 percent.

Futures on the S&P 500 Index fell 0.1 percent, after the benchmark ended the last session at a record high. Alcoa Inc. jumped on Tuesday by the most since April after it reported better-than-expected earnings. Analysts predict S&P 500 members will report a fifth straight quarter of shrinking profits, with BlackRock Inc., JPMorgan Chase & Co. and Citigroup Inc. among companies set to release results this week.

Currencies

The yen strengthened 0.5 percent to 104.14 per dollar, after sliding more than 4 percent over the last two days.
The pound climbed 0.4 percent, set for the longest run of gains since May. British Prime Minister David Cameron will face questions in parliament for the last time as premier at noon in London before traveling to Buckingham Palace during the afternoon to inform Queen Elizabeth II of his resignation. The Queen will then ask Theresa May to form a government.
New Zealand’s dollar retreated from a one-year high and Australia’s currency fell from near its strongest level in two months before Chinese trade data that’s forecast to show slides in both exports and imports for June. The two countries count China as their No. 1 export market.

The yuan strengthened 0.12 percent to 6.6887 per dollar in offshore trading, extending its rebound from a six-month low of 6.7084 reached on Friday. The gains prompted speculation China’s central bank is limiting the supply of the currency in Hong Kong to deter bets on depreciation, as it did in January to halt the yuan’s slide to a five-year low. The currency’s overnight interbank rate in Hong Kong more than doubled to 4.83 percent, the highest since February.

“It feels like the People’s Bank of China is quite serious about defending the 6.7 level,” said Tommy Xie, an economist at Oversea-Chinese Banking Corp. in Singapore. “This reminds me of what happened in January.”

Commodities

Crude oil fell 1 percent to $46.35 a barrel, after jumping 4.6 percent on Tuesday. U.S. industry data showed the nation’s stockpiles increased by 2.2 million barrels last week, adding to concerns about oversupply. Government figures on Wednesday are forecast to show supplies slid.

Copper climbed 2.4 percent in London, building on a 3.9 percent advance over the last three trading days. Nickel rose to an 11-month high and zinc was headed for its best close since May 2015.

Iron ore rose to the highest level since April on the Dalian Commodity Exchange as steel rebar traded near a 10-week high in Shanghai. Macquarie Group Ltd. said it is skeptical that the rally will be sustained as more supply is on the way just as steel production is set to moderate.

Cotton jumped as much as 5 percent to a two-year high in China after the U.S. Department of Agriculture cut its projections for world output and stockpiles by more than analysts forecast. Rubber surged by about 4 percent in Tokyo, supported by supply concerns as rains disrupt production in Thailand.

Bonds

Australian sovereign debt fell for a fifth day, with yields on 10-year bonds rising four basis points to 1.99 percent. Yields on similar-maturity debt in Hong Kong and New Zealand rose at least three basis points. Japan’s rate was little changed at minus 0.28 percent, near the record of minus 0.30 percent reached on Friday.

Yields on Treasuries due in a decade took a breather, falling two basis points to 1.49 percent. The rate, which sank to an unprecedented 1.32 percent a week ago, surged 15 basis points over the last two sessions as demand at auctions of three- and 10-year weakened to levels last seen in 2009. Investors who rushed into bonds last week will face a hard time making money as the market finds a bottom and rates begin to rebound, according to Jeffrey Gundlach, chief executive officer of DoubleLine Capital.“There’s something of a mass psychosis going on related to the so-called starvation for yield,” Gundlach, whose firm manages $102 billion, said during a webcast Tuesday. “Call me old-fashioned, but I don’t like investments where if you’re right you don’t make any money.”

Pacific Investment Management Co.’s Total Return Fund — the world’s biggest actively run bond fund with $86.4 billion in assets — increased its holdings of U.S. government and related debt in June to the highest level since 2014. [Bloomberg]

FTSE 100 Outlook and Prediction

FTSE 100 Prediction
FTSE 100 Prediction

Everyone and everything suddenly seems rather bullish – I expect we will get a leg down shortly. It certainly struggled a bit at 6700 yesterday – which was a shame as I was hopeful for the 6715 short to kick in when it bounced back up from 6670. We are not too far away from the top of the 10 day Raff and Bianca channels with their resistance at 6780ish so if we were to pop this high then that level looks worth a short. However, if the bulls have an early go then a short form the pivot at 6675 area looks to be a good play. As mentioned above the 30min chart moving averages I use went bearish yesterday evening, though we haven’t had a proper entry signal yet – 6663 is a possible, but bear in mind it might pop up to the pivot. For the downside to gain some momentum the bears need to break 6637 where we have support on the 2 hour chart, but interestingly (for the bears anyway) the Hull moving averages went bearish last night, again showing resistance at 6679. Might we be about to see a correction to 6430 as some longs cash in and profits removed? I am thinking short the rallies today.

60 Comments

  1. morning all.
    Looking bullish so far, though not exactly storming up, wonder if it has the legs to breach 670x today..

  3. Morning chaps…. Readded to my short at 93…… Average to BE now 6610…. Let’s see….good luck all.

    1. Removed my two recent additions to my short with some blue remaining……I’m thinking there could be a surprise in store on the upside….

  4. my short average is 6594 and currently sitting on a nasty loss…

    expecting a push up tomorrow also…:(

    when she pops though it should be a big fall…..I hope

  5. should think the market has priced the 0.25% interest cut but anything more will send the markets rocketing, but in reality don’t matter how much money they throw at it, just helping the rich get richer won’t solve the growth problems, or the low wages or housing bubble.

  7. Afternoon all, long time no see! I’ve been keeping away the last couple of weeks on purpose but also had a bit on in my “real” job. Anyway, many moons ago I posted that I had bought a little bit at 6250, playing the “Investment Trust” game on different account. I’ve just sold them at 6690 and re-invested the cash in a short at the same level. Stake is doubled and stop is profit made on the long (not including divs), ie 440 points divided by 2 = 220. Lets see how many dividends I have to pay before I close it (if I can close it) at around 6400.
    Good luck all.

          2. Thanks Sharma im fighting to keep this short…if the Dow sells off it should drop pretty quick…..trouble is they can keep it up as long as they want….Wish I could lol!:0)

  11. Just wondering if we have seen the top ? Short from 714 will hol untill bell rings !

    2. Its hard to make mind for Long in these circumstances ! but still it goes flying eveyday ..surely oneday will be back to normal!

  12. Actually looking for shares, but the filter includes ‘Indices’, and this popped up. Thought I’d put it on since there still seems to be a shorting tendency here! 😀 Rates of change are in the bottom segment of the chart, and look steady. So I favour the upswing continuing for a bit. The analysis uses weighted averages, periods 10, 20 and 100. GLA.

    https://tc.md.it-finance.com/ProRealTime_V10_2/display_chartimage.phtml?name=34f31dtmiyaix5ivd6gjcctaa&type=png&purpose=file

      1. one can only dream!!

        think we will see a big rise tomorrow based on the new PM speech etc….

        1. It’s being a bit resistant now to falling much below the mid 50s..but you never know….might still come good…

          1. So what happens once we get the news regarding rates and get settle !! Any other major event on Friday

          2. I’m not sure Sharma….it’s giving me the impression it wants to consolidate ….I’m 55 pts away from freedom but ……….That Dow needs to sell off for me….

    1. It’s on the cards I think…….but will we see 6600 before 7000…. It’s just being held up…..it will only drop if it’s allowed too.

      1. It doesn’t usually go anywhere in a straight line……but this seems like a one way trip at the moment…..mind you that’s just the time it sells off sometimes?

  17. Don’t think its a Theresa May rally……….think it’s a Dow authentic Rally spin off….I just love walking round farmers fields in the summer and noticing all the nice smells….

  18. Oh well…..I’m dreaming of Nicks 6430…….Zzzzzzzz. Zzzzzzzzzzz Zzzzzzzzz. good night all.

  19. Just closed my two shorts from 6710 at 76.6 for + 33pts each one…..just in case it goes up overnight…..if it drops …I need lower to B/e but still keep risk down abit….

  20. Morning…….Lol….the bullsh@t continues….probably will see a Dow 19000 soon….it’s laughable …. There’s no other word for it IMO….

  21. Bernanske floated idea of perpetual bonds to Japan, only a idea and the market rallies, lol am convinced now the ft will hit 7000 by the end of july, to many traders betting on more and more and more QE from CB.

      1. The thing is ….once everybody decides…I can’t miss out. And starts buying that’s when it will drop….

        1. Too much QE anstel, after 8 years and they are still propping the market up, its a joke Carney will fire his ammo today which will drop sterling push stocks up and make house even more out of the reach for the younger UK generation… Even the expert are saying Carney needs too leave things alone until he gets the nod that article 50 triggered.

          1. Just hedged again at 21….. We know the problem Smokin ….as tmfp used to rightly say…I’m no economist….but I know one thing….if you where trying to do everything wrong running the global economy you would get a gold star for this performance….it’s just a wealth transfer scheme…..it’s just a computer game to me now….reality has nothing to do with it….

  22. Yeh miss tmfp, he would be screwing at the current madness but also would adopted to the market, great trader hopefully he be back soon.

    1. have not hedge any today, as i keep forgetting to press the force button which then close a position… lol might hedge a small amount later.

    2. I have a feeling tmfp isn’t as far away as he would have you believe….he’s watching alright,and he will be smiling reading this :0) …tmfp much preferred to be short…..he can read the market like a book….no,he’s keeping an eye on this lot alright and he will be back at the all time highs….it’s in his blood….you don’t go cold turkey if you have been involved in the markets all your life I wouldn’t have thought….When you read this tmfp….all the best mate ;0)

  23. Hedged 14.3% of my position so if it drops significantly I will take the small loss…

    1. every small dip getting brought up which tells me that we could be near the top, then the big boys will flip the coin and down we go with all the small investor trying to buy…

Comments are closed.