6866, 6846 Support, 6892,6899, 6936 Resistance

Good morning. Well yesterdays started well with the long gaining some points, hit resistance, go short and then 10 minute later a ceasefire gets announced! That was a bit of a kick in the teeth! Anyway, needless to say, the short got stopped out. Once the days starts being sentiment or news driven rather than technical I tend to stand aside and leave it to its own devices – better to stand aside and come back the next day I find. The bulls were frothing there to get the all time highs at 6930, but fell short at 6898, dipping back to 6860 at the close. The FTSE closed just below 6875, ideally for the bulls it would have closed just above. The US wasn’t quite as exuberant yesterday, after the initial excitement wore off Apple weighed things down and the S&P is back below 2000 as I wrote this. ECB announcement today to watch – will they announce QE? Doubt it.

Asia Overnight from Bloomberg
Asian stocks fell, with the regional index retreating from a one-month high, while emerging-market currencies climbed as central banks from Japan, Europe and England decide monetary policy. Samsung (005930)Electronics Co. rose after product releases, and oil retreated.

The MSCI Asia Pacific Index slipped 0.2 percent by 12:21 p.m. in Tokyo, as five stocks fell for every three that advanced after the gauge’s highest close since July 30. Samsung rose for the first time in five days. Nasdaq 100 Index futures were little changed after Apple Inc. (AAPL) led a 0.6 percent drop in the U.S. technology gauge in New York. The South Korean won and Malaysia’s ringgit strengthened 0.2 percent against the dollar. Crude oil fell in New York and London after surging yesterday.

The Bank of Japan left its record stimulus unchanged, while the European Central Bank and Bank of England will announce their monetary-policy decisions later today. Samsung’s release of two new Galaxy Note phones helped fuel Apple’s steepest drop since January, amid concerns over account security. Ukraine and Russia made differing statements about a cease-fire in their conflict.

“There are a couple of exogenous shocks that could trigger the market to break out of its comfort zone,” Toby Lawson, head of futures, options and cash equities trading for Asia-Pacific at Newedge Group SA in Sydney, said by phone. “While investors are looking at geopolitical risks in Ukraine and Iraq, there’s a sense of calm in the markets as the U.S. economic data is strong. There’s expectation that the European Central Bank will provide some stimulus as Europe in general seems to be in a deflationary situation.”

Jackson Hole
ECB chief Mario Draghi told fellow central bankers at Jackson Hole Aug. 22 that policy makers will use “all the available instruments needed to ensure price stability.”

Gauges of euro-region manufacturing and services industries unexpectedly fell this week, underscoring concerns over the 18-nation economy. The ECB cut key rates in June, pushing the deposit rate below zero, and initiated a lending program for banks in a bid to stoke price growth.

BOJ Governor Haruhiko Kuroda said in Jackson Hole that central bankers should use any and all means to ward off deflation.

Ukraine Confusion
Ukrainian President Petro Poroshenko said yesterday that he’d hammered out a deal with Vladimir Putin, Russia’s president. He later removed the word “permanent” from his cease-fire statement and Putin’s spokesman said there had been no deal.

Putin called for an end to the rebels’ offensive in the former Soviet republic’s east and urged the withdrawal of the Ukrainian military from residential areas as part of a seven-point proposal presented yesterday in Ulaanbaatar, Mongolia. Putin’s spokesman Dmitry Peskov said that while the two leaders mostly agreed on steps needed for a truce, Russia can’t reach such an accord as it’s not party to the conflict.

Ukrainian Prime Minister Arseniy Yatsenyuk dismissed Putin’s peace plan as “window dressing for the international community ahead of the NATO summit” and a ploy to duck sanctions. Putin’s “true plan is to ruin Ukraine and restore the Soviet Union,” Yatsenyuk said in an e-mailed statement.

Beige Book
The Federal Reserve said yesterday that the U.S. economy continued to expand during the summer, with none of the country’s regions experiencing a shift in the pace of growth.

Trends in employment, wages and prices were little changed during the July-August period, according to the Beige Book survey, which is based on reports from the 12 regional banks in the Fed system. U.S. policy makers meet Sept. 16-17. Data on factory orders showed a 10.5 percent expansion for July.

The U.S. economy grew more than previously forecast in the second quarter, propelled by the biggest gain in business investment in more than two years, the Commerce Department reported last month. A Labor Department report Sept. 5 will show payrolls rose by more than 200,000 in August for a seventh straight month, a Bloomberg survey of economists shows.

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

Its going to be quite news driven today with BoE and ECb announcements so expect bit of chop. However, the daily pivot is 6866 so we have initial support there, with 6846 below that. The S&P looks like it might dip and find support at 1995 today where there is the bottom of the 20 day Raff channel, so if that bounced from there it might tally with a FTSE rise to test 6899 again. Above that then the obvious swing short is 6936 which is the all time high. Initially today I can see a dip to the pivot which sing actually that far away, a long there is worth ago, but I don’t think everyone will be piling in longs at these heady levels – unless Draghi does announce more stimulus. Its a bit confusing with the ceasefire between Russia/Ukraine as well, wight he press release being reworded. I also imagine the ISIS issue will be top of the NATO agenda at the moment – escalating quite quickly at the moment with the West being taunted and the possibility of being brought back into a ME conflict.