Good morning. Well so much for saying I didn’t think 6641 would get hit but I am very glad that I put the long from there in the trade plan! The initial long off the pivot failed so hopefully you managed to change to a short when the stop got hit which recouped that stop out. The US were really not in the mood to see the indices lower, with a continual rise from the off yesterday, and the S&P is now back testing 2056 – an interesting resistance level though. The Bianca charts have updated now, and are showing resistance at 6746 and 6787, with support virtually were we are around 6680 on all 3 channels. Rochester by election has seen another UKIP MP in another blow to the establishment. The GE next year should be interesting…
Asia Overnight from Bloomberg
Asian stocks rallied, with the regional index paring its weekly retreat, after a report thatChina’s central bank injected funds, while crude oil climbed a second day. Japan’s yen rose for the first time in seven days as Finance Minister Taro Aso said its decline has been too fast.
The MSCI Asia Pacific Index (MXAP)climbed 0.3 percent by 2:28 p.m. in Tokyo. Chinese shares rose after Market News International reported that the People’s Bank of China offered 50 billion yuan ($8.17 billion) of short-term funds to ease a shortage of cash in the financial system. The yen added 0.3 percent to 117.82 per dollar, paring its biggest five-week loss since 1995. Standard & Poor’s 500 Index futures were little changed. Oil in New York added 0.6 percent and is heading for its first weekly gain since September.
Asian equities retreated this week as data showed the region’s two largest economies struggling, with Japan falling back into recession and Chinese factory activity at a six-month low. The yen is the worst-performing major currency versus the dollar this month after Japan’s central bank boosted record stimulus and Prime Minister Shinzo Abe shelved plans for a sales-tax increase. Analysts polled by Bloomberg are split on if Organization of Petroleum Exporting Countries members will cut supply on Nov. 27
“The dollar has gone up so quickly, close enough to the next big round number to encourage profit taking, but it still feels like it’s in a rising trend since Oct. 31,” Greg Gibbs, the head of Asia-Pacific markets strategy at Royal Bank of Scotland Group Plc in Singapore. “The market will search for the right levels to buy again. It’s purely technical, unrelated to any economic news.”
Dollar Gains
The Hang Seng Index added 0.3 percent, paring its drop since Nov. 14 to 2.8 percent, with a gauge of Chinese shares listed in Hong Kong climbing 0.3 percent. The benchmark index’s biggest weekly loss since March coincided with the launch of a trading link between the southern city’s bourse and its counterpart in Shanghai.
The Shanghai Composite Index rose 0.6 percent as all five industry groups advanced. The gauge 17 percent this year as funds flowed into Chinese equities ahead of an the link with Hong Kong, which started Nov. 17. The program allows a net 23.5 billion yuan of daily cross-border purchases.
Stock buying through the exchange link slowed again today. Global investors used up 8.2 percent of their 13 billion yuan daily quota of Shanghai shares through the link. Mainland traders utilized 1.1 percent of the 10.5 billion yuan quota for Hong Kong equities.
Topix Swings
Japan’s Topix index fluctuated and is heading for its first weekly decline since Oct. 24. Eighteen of the 33 industry groups on the gauge advanced today. The Nikkei 225 Stock Average, the best-performing major index this quarter among 24 developed nations monitored by Bloomberg, is down 1 percent this week.
Abe will dissolve the lower house of parliament today for the vote to be held in mid-December. His cabinet will resign as part of procedures required in advance of the election.
The dollar rose to 118.98 yen yesterday, the strongest level since Aug. 9, 2007. That took gains to more than 11 percent since the close on Oct. 17, the last time the U.S. currency finished a week lower against the yen.
The greenback has benefited from a U.S. economy that’s strengthened enough for the Federal Reserve to end its dollar-debasing bond-buying program and consider the timing of its first interest-rate increase since 2006. That contrasts with Japan and the euro region, where officials are battling deflation with further stimulus policies amid record-low interest rates.
The euro rose 0.1 percent t0 $1.2554 today and the won was little changed at 1,114.76 after finishing at the weakest level since Aug. 28, 2013, yesterday.
Crude Rebound
Oil futures advanced as much as 0.8 percent in London and 1.3 percent in New York. West Texas Intermediate crude contracts fell 30 percent from a closing high on June 20 through yesterday and traded at $76.24 a barrel today.
Half of the 20 analysts surveyed this week by Bloomberg forecast OPEC will cut supply at its Vienna meeting to stem a plunge in prices while the other half expect no change. In the seven years since the surveys began, it’s the first time participants were evenly split. The only episode that created a similar debate was the OPEC meeting in late 2007, when crude was soaring to a record.
FTSE Outlook
Will we get the usual Friday shenanigans? Todays pivot is 6672, and we are sitting on resistance at 6690 as I write this so suspect that we may get a little dip to that before another rise. I am not sure how much higher the S&P will go in this leg and if that starts to dip then the FTSE will surely follow – it will be interesting though as its currently sitting on the Bianca channel supports so that would suggest some more upside. Above 6690 the next resistance level is 6712, with 6750 and then the Bianca channels above that. I have a feeling today might be a bit bullish as it hasn’t really given up those gains from yesterday as yet, so any dips to support would be good long entries. As mentioned the Bianca channels are showing support here at 6680, whilst yesterdays low at 6641 is below that. If that breaks then 6600 is next. I don’t think we will see those 2 lower supports today. A short off the top of the Bianca channels at 6746, then 6787 would be worth a go though. Can it add 100 points today? It is option exert today so will get a little choppy at 10:10ish.