FTSE Trade Alerts | Support 7042, 6999, 6989, 6862, 6856 Resistance 7070, 7090, 7120, 7170, 7218

Good morning. Well we got the rise first thing then spent the rest of the day meandering around 7050 yesterday, the FTSE unsure whether to resume its upward trajectory or to drop with a continuation of Fridays action. Generally it was a strong start to the week, especially with the Dax rising 2% over the day, all mostly helped by the China news with their reserve requirement cut. As I mentioned in yesterdays email, the daily EMAs are still bullish and its a bit of shame that the price didn’t dip just 10 points lower on Friday for a perfect long entry off the 25ema. If only! There were some more rumblings from the US Federal Reserve about preparing to raise interest rates. Bill Dudley, Head of the New York Fed, said interest rates in the US should be around 3.5pc once inflation returns to 2pc. While the comment was tucked away at end of his speech, it is a warning shot that should send shivers down a great many spines.

US & Asia Overnight from Bloomberg
Asian stocks rose for the first time in three days as Hong Kong’s benchmark index rallied from its biggest drop in four months and Japanese exporters gained. The dollar strengthened, while oil held near the highest this month.

The MSCI Asia Pacific Index climbed 0.8 percent at 2:10 p.m. in Tokyo. Hong Kong’s Hang Seng Index rose 2 percent, rebounding from a 2 percent drop on Monday, while Japan’s Topix index advanced 1.4 percent. Standard & Poor’s 500 Index futures increased 0.2 percent. The Australian dollar slid 0.4 percent versus the greenback and the yen depreciated 0.2 percent. Oil in New York traded at $56.34 a barrel.

Stocks in Hong Kong and China have surged this month amid speculation that government stimulus will revive a mainland economy expanding at the weakest pace since 2009. New York Federal Reserve President William C. Dudley said he’s optimistic a rebound in U.S. growth will warrant higher interest rates this year. Greek Prime Minister Alexis Tsipras ordered local governments to move their funds to the central bank as the country’s cash crunch intensifies.

“The gains in Chinese stocks have helped bolster sentiment among emerging stocks,” Isara Ordeedolchest, an investment strategist at SCB Securities Co. in Bangkok, said by phone. “Still, those equities will be very volatile because the rally has been too quick and speculative. Greece’s debt problem is likely to only be noise for the market. It’s unlikely to be a big risk.”

Hong Kong
The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong gained 1.9 percent. China Mobile Ltd., the world’s biggest carrier by users, jumped the most since January 2009 after reporting earnings. The move accounted for almost 25 percent of the Hang Seng Index’s net advance.

The Hong Kong dollar was little changed at 7.7501 to the greenback after the city’s defacto central bank injected 11.586 billion ($1.49 billion) to defend the currency’s peg against inflows on Monday.

The Shanghai Composite Index fluctuated after falling from a seven-year high on record turnover Monday. A subindex of property shares fell as much as 4 percent after Kaisa Group Holdings Ltd. became the first Chinese real estate company to default on its U.S. currency debt.

All 10 industry groups in the Asia-Pacific stock gauge rose Tuesday. The measure trades at 14.5 times estimated earnings, versus 17.8 for the S&P 500 and 17.1 for the Stoxx Europe 600 Index.

Australia’s S&P/ASX 200 Index added 0.5 percent and New Zealand’s NZX 50 Index slipped 0.1 percent. The Kospi index was 0.2 percent lower in Seoul.

Dollar Index
The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 of its most-traded peers, climbed 0.1 percent. The euro bought $1.0736.

The Aussie weakened to 76.95 U.S. cents after the Reserve Bank of Australia said households’ response to easy monetary policy was “unusually uncertain” and it saw an advantage in waiting for more economic data before deciding on further rate reductions.

The S&P 500 added 0.9 percent on Monday as International Business Machines Corp. jumped before reporting earnings that beat estimates. A gauge of technology shares surged 1.8 percent, rebounding from a 1.4 percent drop, as Apple Inc., Microsoft Corp. and Facebook Inc. increased at least 2.3 percent.

Greek bonds fell Monday, sending the three-year yield 193 basis points higher to 28.69 percent. Euro-area finance ministers meet this week to review what policy changes Greece can deliver by mid-May as the nation seeks to unlock new aid payments and avoid a default.

The Greek government issued a decree that forces local governments to transfer cash balances to the central bank, as debt to the International Monetary Fund and month-end salary payments come due. [Ref]

FTSE Outlook

Todays pivot is 7040 and I think that will hold as support, certainly first thing. The 30 minute chart looks good for a push up to 7070 where we have the first resistance level and the top of that declining 30minute channel, with 7090 above that. 7120 is a slightly bigger picture resistance, with the top of the 10 day Bianca above that at 7170, though i don’t think we will see that today… but it is bull Tuesday! If the bulls fail though then support today is at the pivot as mentioned, 7040, with 7000 below that, and the bottom of the 10 day channel at 6989 – so a decent area to try a long. The 25ema on the daily has now risen to 6982 so support is here, so longs wouldn’t need very big stops. Below this the bottom of the 20 day Raff is at 6950, along with the daily coral line. Generally feeling a bit bullish today, as long as the pivot holds and a rise to 7100 looks possible. Yesterday was buy the dips, especially to the 34sma on the 10minute and 25ema on 30minute and I think that today is the same, so support around 7046 and the pivot. Interestingly the 30min EMA cross overnight to bear didn’t last long so it will certainly be interesting to see if bulls or bears proper today.