FTSE 100 Support 6685 6670 6645 6600 6586 6550
FTSE 100 Resistance 6753 6769 6795 6811 6815

Good morning. Well hats the end of that bull run for the moment then. Fridays shorting level at 6859 was bang on the money and even saw double top for a second bite of the cherry. Draghi’s speech didn’t really help the bulls, as the value of stimulus is questioned and then futures were rattled by concerns over Clintons health in the presidential race following her sharp exit and collapse on Sunday. Federal Reserve Bank of Boston President Eric Rosengren spurred bets on an interest-rate hike on Friday, saying the U.S. economy could overheat should policy makers wait too long to tighten. All in all, the bulls had a salvo of news that they couldn’t fight off. However I imagine there are quite a few bulls currently waking up to fairly underwater positions today. Time to squeeze the bulls this time.

US & Asia Overnight from Bloomberg

Global selloffs in stocks and bonds resumed in Asia, while commodities slumped amid concern central banks in the world’s biggest economies are questioning the benefits of loose monetary policy.

The MSCI Asia Pacific Index dropped by the most since June and S&P 500 Index futures fell, after the U.S. benchmark ended last week with its steepest loss since Britain’s vote to leave the European Union. Regional debt tracked a selloff in Treasuries, pushing 10-year yields in Australia and New Zealand to the highest levels this quarter. Oil sank toward $45 a barrel as nickel led declines among industrial metals and gold fell for a fourth day. South Korea’s won slid more than 1 percent versus the dollar, while the yen gained.

Financial markets have been jolted out of a period of calm by an uptick in concern over the outlook for central bank policies. Federal Reserve Bank of Boston President Eric Rosengren spurred bets on an interest-rate hike on Friday, saying the U.S. economy could overheat should policy makers wait too long to tighten. The comments came a day after European Central Bank chief Mario Draghi surprised markets by playing down the prospect of further stimulus. The S&P 500 slumped 2.5 percent Friday, breaking out of a range that hadn’t seen it move more than 1 percent in either direction for 43 days.

“Central banks are reluctant to add additional stimulus and that’s causing a lot of concern,” Niv Dagan, executive director at Peak Asset Management LLC in Melbourne, told Bloomberg Radio. “We expect additional downside in the near term. You want to wait and see and remain cautious,” he said.

Fed Governor Lael Brainard, seen as a leading opponent of rate increases for much of the past year, will speak Monday in the last scheduled appearance by a U.S. central banker before the traditional pre-meeting quiet period. Comments are also due from regional Fed chiefs for Atlanta and Minneapolis. The next policy review will be held in Washington Sept. 20-21, with the probability of a hike then at 30 percent, from 20 percent a month ago, according to Fed funds futures tracked by Bloomberg.For more on what to expect from Brainard, click here.

Stocks

The MSCI Asia Pacific Index tumbled 1.9 percent as of 11:32 a.m. Tokyo time, led by losses in raw-materials producers. Japan’s Topix index fell 1.2 percent as of 9:21 a.m. Benchmarks in Australia, Hong Kong and New Zealand all sank more than 2 percent, while markets including Indonesia, Malaysia and Singapore were shut for holidays.

Samsung Electronics Co. plunged as much as 6.7 percent in Seoul — its biggest intraday drop in four years — after U.S. regulators and the company asked users of its Note 7 smartphones to turn off the devices because of fire risk. BHP Billiton Ltd., the world’s biggest mining company, fell more than 3 percent in Sydney.

S&P 500 futures fell 0.5 percent, following a 2.5 percent drop in the U.S. benchmark, and contracts on the FTSE 100 Index slid 1.3 percent.

“Markets have awoken to the fact that the days of further monetary stimulus may be numbered,” Jason Wong, a currency strategist in Wellington at Bank of New Zealand Ltd., said in an e-mail. Markets are primed for “a good old-fashioned bout of risk aversion,” he said.

Bonds

Australia’s 10-year bond yield climbed nine basis points to 2.06 percent, after surging 10 basis points on Friday. Rates on similar-maturity New Zealand debt jumped 10 basis points to 2.45 percent.

Yields on benchmark Treasuries declined one basis point to 1.66 percent, after increasing by eight basis points on Friday. Rates on 10-year German debt rose above zero in the last session for the first time since July.

Commodities

The Bloomberg Commodity Index fell 0.7 percent, after sliding 1.3 percent in the last session.

Crude sank 1.8 percent to $45.06 a barrel in New York after American producers increased drilling, adding to a glut. U.S. rigs targeting crude rose for a second week to 414, the most since February, according to data from Baker Hughes Inc.

Nickel fell 2.2 percent in London, dropping for the first time in eight days, while lead and zinc declined more than 1 percent. Gold was down 0.1 percent, after retreating 1.6 percent over the last three sessions.

Currencies

The Bloomberg Dollar Spot Index advanced for a fourth day. The yen edged up 0.1 percent versus the greenback, while the Australian and Canadian dollars weakened 0.2 percent.

The won slumped 1.1 percent, the worst performance among major currencies, after Yonhap News reported that U.S. and South Korean intelligence authorities see a high chance that North Korea will conduct an additional nuclear weapons test after holding one on Friday. [Bloomberg]

FTSE 100 Outlook and Prediction

Slightly tricky one to call today with the sell off since Friday gathering pace. There is support at the 6685 level start with so if that area holds then i think that we will see a retrace upwards the daily pivot at 6750, and we also have the 30min coral here. If the bears then reload there then we could well dip down to the 6645 level where we have S1, and maybe a bit lower – 6600ish. Sometimes when the FTSE opens already considerably down, it usually bounces back to close some or all of the gap. Currently 88 points down as I write this, and its quite rare for the FTSE to lose more than 100 points in one session (does happen, just not very common). As I am writing his the Dax has already climbed a bit off the S1 level at 10340.

So, my plan for today is for an initial rise from the 6685 area (the bottom of the 20 day Raff) to target the 6750 and then further downside. I think now the bears are in control they will want to squeeze the bulls, having had it tough for the past few months since Brexit. That said, I don’t think its the end of the world just yet – we will have this pull back then climb again and probably be at 7000 before too long. The market just needed some reason to retrace some of that Brexit rally and bring the daily RSI back down – currently at 33, as opposed to sitting at 60/70 like it has for ages.