FTSE 100 Support 6793 6765 6754 6748 6723
FTSE 100 Resistance 6798 6821 6830 6869 6899 6956

Good morning. That was a decent bounce off the bottom of the 10 day Raff yesterday at 6770 – which held for two tests. The 3rd test of that area might well break though which would open up 6755 and 6732. Gold was a bit unlucky as it dropped from the 1192 to 1183.1, and just missed the long order at 1183 before bouncing to 1195. Frustrating with that one. The FTSE is in an interesting place right now – could well be within a corrective rally which may well see 6869 and possibly 6880, but there is 2 hour resistance at 6821 and 6830 in the way first. Whilst from a bearish point of view, a break below 6770 opens up 6755, 6730 and then 6660. The bulls failed to break the 6830 level yesterday, though a second or third attempt today might well do so. That said, its probably worth a short there with a tight stop!

US & Asia Overnight from Bloomberg

Oil retreated back below $47 as OPEC members haggled ahead of a meeting on production cuts, while a rally in metals ran out of steam. The dollar stabilized after a two-day decline and stocks were mixed as investors weighed Donald Trump’s stimulus plans with threats to the market from Italy’s referendum.

Crude futures swung back to losses as Iraq and Iran raised objections with OPEC officials over how to distribute output reductions, referring the issue to ministers for further consideration. Copper slumped for the first time in seven days. The Bloomberg Dollar Spot Index stabilized after a two-day loss. Emerging market stocks were generally higher, while those in developed nations slid.

“What we are seeing now is a tug of war among OPEC members to get their share of the pie,” Son Jae Hyun, a global market analyst at Mirae Asset Daewoo Co., said by phone from Seoul. “If a deal isn’t made this time, none of them will benefit.”

The impact of President-elect Trump’s surprise victory on the dollar and commodities is waning, and traders are divided on how long China will be able to stabilize its economy while cooling its property market. Investors are also focused on the Organization of Petroleum Exporting Countries’ talks, with Saudi Arabia saying oil output cuts may not be required to stabilize prices.

Commodities

West Texas Intermediate crude slipped 0.7 percent to $46.77 a barrel as of 2:00 p.m. in Tokyo, after rising 2.2 percent on Monday.
OPEC officials are so far failing to reconcile their differences on a pact to cut output and revive prices, with Saudi Arabia damping expectations of a deal by saying production curbs weren’t essential.
Copper futures were down 2 percent on the London Metal Exchange, while zinc declined 1.6 percent and Nickel lost 2.1 percent.
Gold for immediate delivery fell 0.2 percent following last session’s 0.9 percent jump.

Currencies

The euro was down 0.1 percent at $1.0600 and the also pound lost ground, while the yen was little changed at 111.97 per dollar.
Bloomberg’s dollar gauge, which tracks the greenback against 10 major peers, was little changed after a two-day decline.
“Given that he hasn’t even taken office yet, the Trump rally hasn’t become completely obsolete yet as a theme,” said Ayako Sera, a Tokyo-based strategist at Sumitomo Mitsui Trust Bank Ltd. “But given the big events coming up this week, it’s probably the most sensible thing to do for investors to stay away from trading strongly.”
The Chinese yuan gained 0.2 percent after the People’s Bank of China strengthened the fixing versus the dollar for a second straight day
South Africa’s rand weakened 0.6 percent. President Jacob Zuma survived the most serious challenge to his leadership yet, after a contingent of top officials failed to force him from office during a meeting of the ruling party’s National Executive Committee

Stocks

About the same number of stocks fell as rose on the MSCI Asia Pacific Index, which gained 0.1 percent. Japan’s Topix Index, Australia’s S&P/ASX 200 Index and New Zealand’s S&P/NZX 50 Index were all little changed.
The Jakarta Composite Index rose 0.9 percent, the biggest gain among Asian developing-nation equity benchmarks. Stock gauges in China, India and Thailand all advanced
Futures on the S&P 500 were little changed after the underlying benchmark fell from an all-time high Monday, losing at least 0.3 percent.

Bonds

Japan, New Zealand and Australian government bonds were all little changed.
Ten-year Treasuries yielded 2.31 percent, after falling five basis points last session.
[Bloomberg]

FTSE 100 Outlook and Prediction

We are sitting on the bottom of the 10 day Bianca channel at 6793 as we start today, so the bulls will need to be quick out the blocks to get a rise to the 6830 level where we have the 2 hour coral as resistance. There is the 100 Hull moving average just below that at 6821 also for resistance. Above this 6869 is the 10 day Bianca channel, though we are still within what looks like a bit of a corrective move on the FTSE for a possible rise to 6885. A rise in the FTSE this morning would see the US rally later, which would tally with the fact that the S&P is sitting on the bottom of its 10 day Raff channel at 2200. Round number support there too.

So, for today, the FTSE 100 paints a slightly confusing picture. However, the levels I am watching are 6830 and 6869 for resistance, 6757 and 6730 for support, its just the route that it will take to reach this levels (if it does) could follow any path. As such, I have plotted the preferred option with the blue arrows, and plan B with the orange arrows. We also have the Italian referendum on Sunday 4th December, which is likely to create some volatility in the second half of the week – another Brexit style result? – and there are fears for the Italian banks if the referendum result is to leave the Eurozone. Also if they leave as well, is it the beginning of the end for the Eurozone?

Anyway, back to today, and I am expecting a bit of a climb first thing to follow the blue arrows. If 6770 breaks then 6757 is pretty likely. Below that then 6660 is definitely on the cards. If the bulls break 6830 then 6869 and 6885 are the next levels of note.