6291,6280, 6230, 6200 Support, 6349, 6365, 6457, 6462 Resistance

Good morning. Messy! Well we got the rise and dip as expected yesterday but the dip came from higher up with a rather large sell off at the end of the US session. Turned out the US was open yesterday, it was just the bond market that was closed. 6300 provided some overnight support, but it was quite a drop from 6390 in just a few hours – still a lot of fear opiut there and the bears are still in control really. I have 6230 or lower, still on the radar despite a low of 6243 on Sunday night. If 6290 gets taken out today then I expect we will see those lower levels, as that is the bottom of the 20 day Bianca channel.

Asia Overnight from Bloomberg
Asian stocks fell, with the regional benchmark index heading for a six-month low, extending a rout in global equities after the Standard & Poor’s 500 Index capped its biggest three-day loss since 2011.

The MSCI Asia Pacific Index (MXAP) fell 0.6 percent to 135.60 as of 9:04 a.m. in Tokyo before markets in China and Hong Kong open. The gauge dropped 8.8 percent from its year high in July through yesterday as the Federal Reserve contemplates when to raise interest rates and a faltering recovery in Europe sparked concern global economic growth will slow.

“Pessimism is coming back into the market amid the slump in U.S. equities,” said Nader Naeimi, who helps manage about $125 billion as head of dynamic asset allocation at Sydney-based AMP Capital Investors Ltd. “It’s been a while since we had a gut-shaking correction in the U.S. It will take a while before the market can build a firmer base. There are a lot of worries about global growth.”

Japan’s Topix index tumbled 2 percent after markets reopened from a holiday. South Korea’s Kospi index was little changed. Australia’s S&P/ASX 200 (AS51) Index gained 0.4 percent. New Zealand’s NZX 50 Index lost 0.8 percent.

Futures on the S&P 500 added 0.4 percent. The underlying gauge declined 1.7 percent yesterday in New York, bringing losses the past three days to 4.8 percent, the most since November 2011.

A rout in global equities wiped $1.54 trillion from shares last week, with the S&P 500 tumbling 3.1 percent for its worst drop in two years, amid growing concern of an international economic slowdown. Fed officials said over the weekend that the threat from overseas may lead to rate increases being delayed. The International Monetary Fund cut its forecast for global growth last week and said the euro area faces the risk of a recession.

Tensions escalated in Hong Kong yesterday as a mob tried to tear down barricades erected by pro-democracy protesters near the city’s business district, and student leaders vowed to defend front lines under threat of police moves to clear them.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

For today there is a fairly decent 30 minute channel in play, with resistance just above the daily pivot (6349) at 6360/65ish depending on when it might hit the top of that channel. As such I think that channel will be decent to play off today, so a short at the top of it for a dip down to the 6291 area. If that breaks then i can see the bears getting a bit of momentum and breaking through the other supports that are just below, namely the 10 day Bianca at 6280. If they do then the downside level for support is 6205ish, then the bottom of the Raffs at 6100ish. With the sell off at the US close last night the bears are still in control and there is a lot of fear out there, the daily trends still firmly down, and Gold still rising. That said, the FTSE has fought back a bit from the 6300 overnight low, and is looking at opening around 6340ish. I have put in an initial rise this morning to the top of that channel and just past the pivot, but if that breaks then 6390 being yesterdays high will be resistance, before the Bianca channel tops at 6440 – maybe a bit too optimistic for today but you never know! Still short the rallies really, with most indices breaking below their 200 day moving averages now.