FTSE trade alert service – Support 7007, 6995, 6966, 6949, 6940 Resistance 7020, 7034, 7044, 7077, 7091

Good morning. I hope you had a good weekend. Another day another day of will they won’t they with regards to Greece. Friday saw German and French stocks drag European shares to their biggest decline in a month amid investor concern Greece won’t reach an agreement with creditors in time for a debt repayment.Greece is under pressure to make stronger commitments to overhaul its economy and strengthen public finances before any further funds are released. The Mediterranean nation hasn’t yet said how it will make almost 1.6 billion euros ($1.75 billion) in International Monetary Fund payments scheduled for next month, with the first transfer due on June 5. That said, both of Friday’s order trades worked well, with the long at 7005 first thing and then the 7070 short running for a decent amount of points for the day. Today is the start of the new month, traditionally would see some new money coming in, though a lot of it is staying out while Greece develops – there was rumour of a deal being done by Sunday but that hasn’t materialised and with technical talks yielding no breakthrough, Greek Prime Minister Alexis Tsipras is seeking the intervention of German Chancellor Angela Merkel and French President Francois Hollande. The three leaders held a “constructive” call on Sunday on the next steps, a German government official said.

US & Asia Overnight from Bloomberg
Asian stocks fell amid concern about the strength of U.S. economic growth and as investors awaited manufacturing data from China.

The MSCI Asia Pacific Index lost 0.4 percent to 150.75 as of 9:01 a.m. in Tokyo. The Standard & Poor’s 500 Index declined 0.6 percent on Friday in New York as May economic data raised concern over the strength of the world’s largest economy after a first-quarter contraction.

Asian shares last month lost 1.3 percent, paring this year’s gain to less than 10 percent. Japan’s Nikkei 225 Stock Average climbed for 11 straight days through Friday, extending its longest rally since 1988. Chinese stocks ended a volatile week of trading with a second day of losses amid concern that nation’s world-beating rally has gone too far, too fast.

“The market has run a little bit too hard,” Karl Goody, a Sydney-based private wealth manager at Shaw Stockbroking Ltd., where he helps oversee about A$10 billion ($7.6 billion), said by phone. “We’re seeing much more worry about the downside and more bearishness. The first Fed rate hike is still weighing on people’s minds. Recent data in the U.S. has not been that hot.”

A gauge Friday showed Chicago-area manufacturing activity contracted last month to its lowest level since February, raising concerns that the rebound from a weak first quarter lacks vitality. Data also showed gross domestic product in the U.S. shrank, amid harsh winter weather, a strong dollar and delays at ports. A separate report said consumer sentiment in May fell the most since the end of 2012.

Regional Gauges
Japan’s Topix index slid 0.7 percent. Australia’s S&P/ASX 200 Index declined 0.2 percent. South Korea’s Kospi index retreated 0.4 percent. Markets in Singapore, Thailand and New Zealand are closed for holidays.

Futures on Hong Kong’s Hang Seng Index fell 0.3 percent and contracts on the Hang Seng China Enterprises Index of mainland firms listed in the city lost 0.6 percent.

The Shanghai Composite lost 1 percent last week. Thursday’s rout ended a seven-day, 15 percent surge for the gauge that saw it almost breaching the 5,000 level for the first time in eight years. The index is still up 126 percent over the past year, the biggest advance among major global benchmark indexes tracked by Bloomberg. [Ref]

FTSE Outlook and Prediction

Greece is really going to play on minds at the start of this month, though I am sure a deal will get done, most likely at the last minute as is so often the case. I imagine that “they” don’t want Greece to default and/or leave the EU as it opens the way for Italy, Spain, Portugal and probably a few others to do the same, and would be the beginning of the end for the EU. I imagine the US are starting to lose a bit of patience with the ongoing saga too (aren’t we all!). I have put in resistance at 7030 for today, but if we break that level then we should see a rise to 7077 and 7090 where we have the top of the 2 Bianca channels. I have resistance at 7030 and with no Greek deal I think the market might be reluctant to push on, especially as the extreme “Left Platform” faction of Syriza, who make up a third of the party’s membership, have promised to defy creditor powers, and called for a reinstitution of the drachma, as the government enters its fifth month of arduous bail-out negotiations. Todays pivot is 7007, and as we are just above this level as I am writing this I have put it as initial support. However, support below this is at the bottom of the Bianca channels at 6966 and 6940. 6966 and 7077 look like decent areas to trade off today if either of them is seen. Bear in mind if a rumour or confirmed news of a Greek deal then a rise is inevitable, with he Dax likely to go towards 12200+.

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