Good morning. Wow, whats a day that was yesterday – not one for the faint hearted at all. Really didn’t expect to get an alert on my phone while out that said the price had hit the bottom of the 20 day Bianca at 6350 – which has held really quite well and now we are at 6465 as I write this! Certainly arrested the fall at that level. The early long did alright for a few points but once again, it was tricky trading – though when is it ever that easy. If it was, everyone would do it! US bullishness was dampened by a poor retail result yesterday, dollar weakened and equities fell. However, all eyes remain on the US to drive the global economy at the moment, with the American economy growing at its fastest pace in over a decade in the third quarter of 2014, reaching an annualized rate of 5 percent. With Brazil stagnating, Russia entering a recession, and India struggling to implement economic reforms, you can see why. The Davos meeting could be interesting this year!
Asia Overnight from Bloomberg
Most Asian stocks rose as a rebound by Japanese energy companies and exporters outweighed disappointing U.S. retail sales.
About two shares rose for each that fell on the MSCI Asia Pacific Index (MXAP), which lost 0.1 percent to 137.35 as of 9:16 a.m. in Tokyo, before markets opened in China and Hong Kong. Japan’s Topix index added 0.6 percent as the yen weakened after crude rose the most in 2 1/2 years yesterday.
“Given the return in oil prices and the deep sell-off yesterday in Japanese stocks, the conditions could be there for a rebound,” Mitsushige Akino, an executive officer at Ichiyoshi Asset Management Co. in Tokyo, said by phone. “The risk-off sentiment pushed the dollar-yen pair to as low as 116, but that was probably going too far in the short term.”
The steepest drop in U.S. retail sales in almost a year heightened concern over the global slowdown after the World Bank downgraded its own prediction for the world economy this week. The Bloomberg Commodity Index of 22 energy, agriculture and metal prices plunged to a 12-year low this week as oversupply spurred a rout in oil and as slowing economic growth in China and Europe means less demand for raw materials such as copper, which has tumbled to the lowest since 2009. Global shares are on course for a third weekly slide.
Australia’s S&P/ASX 200 Index declined 0.7 percent and New Zealand’s NZX 50 Index slipped 0.4 percent. South Korea’s Kospi index added 0.1 percent. South Korea and Indonesia are projected to keep interest rates on hold in policy reviews today, and Australia is due to report jobs data.
Futures on the Standard & Poor’s 500 Index rose 0.1 percent. The underlying gauge dropped 0.6 percent yesterday in a fourth day of losses, paring a slump of as much as 1.7 percent after a Federal Reserve survey indicated gains in consumer spending and as a rally in U.S. crude sent energy stocks higher.
West Texas Intermediate crude futures gained 0.6 percent today after advancing 5.6 percent yesterday. [ref]
FTSE Outlook
It was certainly interesting that the 20 day Bianca held so well yesterday, and we have bounced pretty well – the bulls are not done in just yet. We managed to break above the pivot for today which is 6428 so that is now support for todays session, whilst the first level of resistance is 6480/6490 where we have the top of the declining 30min channel. If the bulls break above this then 6510 and 6525, where we have a major PRT resistance line. I think we will get an initial dip from the 6480 area, to partially close the gap to yesterdays close level, most likely finding support at the pivot at 6428. A break below the pivot and the 6420 level will likely see more bear and probably a retest of the 20 day Bianca at 6322; we also have the bottom of the 10 day at 6318. Good area to go long if it were to be seen (not ruling anything out these days!). There is also some support at 6340 from the bottom of the 10 day Raff.