FTSE 1oo Support 6830 6786 6782 6770
FTSE 100 Resistance 6855 6874 6877 6880 6902

Good morning. Was too early with my FTSE short yesterday, instead it rallied to the 20 day Raff channel (6870_ and dropped 50 from there. The Gold short worked a lot better though, running to target for a nice gain. Its always a little bit harder to call in the run up to yet more central bank news. We have had the BoJ one overnight, Fed later on today and likely to keep rates as they are I expect. The BoJ didn’t take their rates negative which has seen a bullish reaction overnight.

US & Asia Overnight from Bloomberg

Japanese stocks surged, leading gains in Asia, as tweaks to the Bank of Japan’s monetary policy weakened the yen and lifted the nation’s 10-year bond yield to zero for the first time since March. Oil rallied on speculation a glut will ease.

The Topix index jumped the most this month in Tokyo, with banks and insurers soaring as the central bank refrained from moving deeper into negative interest-rate territory and shifted the focus of its stimulus to controlling the yield curve. The yen tumbled by the most this month and the nation’s long-term bonds dropped. An MSCI gauge of Asian shares advanced for a fourth day and U.S. stock index futures rose. The dollar strengthened versus the majority of its major peers before a Federal Reserve meeting, while oil jumped toward $45 a barrel on prospects major producers will agree to cap output.

“Overall the BOJ’s stance is positive for bank shares, and this is making it easier for the market overall to rise,” said Ryuta Otsuka, a strategist at Toyo Securities Co. in Tokyo. “If there is a problem it might be the issue over directly meddling with the yield curve. First there’s the issue of whether they’ll succeed, and there’s probably going to be views that say it’s better to leave these things to their natural course.”

The Bank of Japan’s decision had the potential to jolt financial markets regardless of the outcome as opinion was fairly evenly split over whether policy makers would take action. The Fed meeting is being viewed with greater certainty and all but four of 102 economists surveyed by Bloomberg predict the central bank will hold off from raising interest rates after U.S. employers added fewer jobs than forecast in August and growth in services slowed.

Monetary authorities will continue to hog the limelight on Thursday with speeches due from the new governor of the Reserve Bank of Australia as well as the heads of the European Central Bank and the Bank of England. In addition, central banks in countries including New Zealand, Norway and South Africa have policy decisions due the same day.

Stocks

The MSCI Asia Pacific Index rose 0.5 percent as of 1:52 p.m. Tokyo time, after rallying 1.6 percent in the last three sessions.
The Topix index jumped 1.8 percent, with gauges of banks and insurers soaring more than 4 percent on optimism higher long-term bond yields will boost their earnings. BOJ Governor Haruhiko Kuroda is due to speak at a press briefing after the close of trading in Tokyo and local investors will have plenty of time to digest his comments with Japanese markets shut Thursday for a holiday.

“The equity market looks at it as being a relief with no further negative deposit rates,” said Sean Darby, Hong Kong-based chief equity strategist at Jefferies Group LLC. “But generally the market will take it as there having been monetary tightening because the yield curve has moved up,” he said, referring to the BOJ’s policy decision.

Futures on the S&P 500 Index added 0.3 percent, after the underlying gauge barely moved in each of the last two sessions. Contracts on the U.K.’s FTSE 100 Index rose 0.1 percent.

Currencies

The Bloomberg Dollar Spot Index climbed 0.2 percent, having been little changed ahead of the BOJ announcement. The yen slid 0.9 percent to 102.60 per dollar, leading declines among major currencies.

Commodities

Crude oil climbed as much as 2.5 percent to $45.14 a barrel ahead of a government update on U.S. stockpile levels. Inventories fell by 7.5 million barrels last week, the American Petroleum Institute was said to have reported late on Tuesday ahead of the official figures. Algeria’s energy minister said OPEC may turn its informal talks next week into a formal session, a hint that major producers may agree measures to limit output and support prices.“History suggests that OPEC action is unlikely, but there will be talk and that will move the market,” said Evan Lucas, a market strategist at IG Ltd. in Melbourne. “The API data gave the market a boost, but prices are coming from a low base.”

Nickel fell 0.8 percent in London, after jumping 6 percent in the last two sessions, ahead of the results of a mining audit by the Philippines. It has climbed about 16 percent in 2016 as the Philippines — the biggest supplier of the mined metal — shutters sites for failing to meet environmental standards. The government could tell more mines to stop operating, Environment and Natural Resources Secretary Gina Lopez said on Monday. [Bloomberg]

FTSE 100 Outlook and Prediction

Its all going to be about the Fed rates decision at 7pm today. I have some fairly decent resistance at 6875ish on the daily charts as we have the 10 day Bainca and both the Raffs here, as well as R1 so I think that any early rise to the this area is worth a short, however if this level gets broken then I am expecting to see the 6902 area. Support wise, we have the pivot at 6830 and the 25ema on the 30min at 6832 – so off the back of the BoJ driven rise, this area could hold. A break below this is likely to see S1 and the 200ema (30min) at 6785. Its always slightly tricky with news, the usual pattern (and most well known) is “buy the rumour, sell the news” – but I expect there will still be a reaction at 7pm so expect some spikiness then. If the bulls were to break 6900 then I am fully expecting us to test 7000 again – as the bulls managed to break the daily resistance at 6785 pretty easily the other day, the daily chart moving averages have gone bullish, with support at 6785 now so its distinctly possible.