Good morning. Well that was rather close, had 6617 as resistance for yesterday and the high was 6616.8! Unfortunately that meant that the short order just missed, and the rest of the day was spent in decline, to se a low at 6528 -which will be a support area for today. The daily trends are still down, and the next Bianca support level of note is the bottom of the 10 day at 6508. Certainly been a weak start to October though will probably end strongly!
Asia Overnight from Bloomberg
Asian stocks fell, with the benchmark index heading for a fifth day of losses, amid concern over the end of the Federal Reserve’s stimulatory bond-buying program and signs of weakness in the euro-area economy.
The MSCI Asia Pacific Index (MXAP) slid 0.1 percent to 139.64 as of 9:02 a.m. in Tokyo after retreating to a four-month low yesterday. The measure capped its biggest monthly drop in more than two years in September amid concern Chinese growth is slowing and that the Federal Reserve may increase U.S. interest rates sooner as it ends asset purchases. U.S. stocks tumbled yesterday, sending the Russell 2000 Index into a correction.
“The volatility in the global markets is likely to overwhelm risk assets,” Evan Lucas, a market strategist at IG Ltd. in Melbourne, said by e-mail. “Equities are going to feel the pinch of a market pullback.”
Japan’s Topix index dropped 1.3 percent, the biggest decline in almost two months. South Korea’s Kospi index lost 0.5 percent. Australia’s S&P/ASX 200 Index fell 0.4 percent, while New Zealand’s NZX 50 Index slid 0.3 percent. Markets in Hong Kong remain closed today, while those in mainland China are shut through Oct. 7.
Futures on the Standard & Poor’s 500 Index were little changed. The measure lost 1.3 percent yesterday to its lowest close since Aug. 12. The Russell 2000 lost 1.5 percent, extending losses to more than 10 percent from a record reach in March, meeting the definition of a correction.
More than $200 billion in assets was erased from U.S. equity markets during the past three months, as stronger economic data fueled concern the Fed may raise interest rates sooner than anticipated. Hiring in the U.S. accelerated for the first time in three months, according to a private report before monthly payrolls figures due tomorrow.
Euro Stagnation
While U.S. factories capped their strongest quarter in more than three years, a gauge of manufacturing for the 18-nation euro area pointed to near stagnation. The European Central Bank is expected to announce today details of its plan to buy asset-backed securities after unveiled a series of stimulus measures to boost credit lending and combat the threat of deflation.
Hong Kong’s pro-democracy student leaders threatened to besiege government offices if demands for free elections and the resignation of the city’s top official aren’t heeded, as the government sought to start talks. Demonstrations swelled for a sixth day yesterday, with one student leader estimating the crowd at 9 p.m. at close to 200,000 people.
FTSE Outlook
Todays pivot is 6573 so I am expecting resistance there today, with 6600 and the top of the 10 day Bianca at 6611 above that. I am not convinced it will break the pivot though as we also have the weekly PRT horizontal resistance at that level, and also the top of that 30 minute channel at around 6585. As such a short off the pivot could be good. Short the rallies for the moment still! The daily trends are still down and the bottom of the 10 day Bianca is 6508 – as such a long at this area might be good if you want to catch a bounce. It is also the bottom of the 30 minute channel. if that 6500 level breaks then the bottom of the Raffs at 6450 area will be the next likely stop!
I have put in an early rise to the pivot, mainly as the 10min looks a weak bull to start, but only if 6541 holds.