Good morning. Well the 6774 short didn’t really do much after its initial 10 point drop and I spent most of the day watching it hover around the entry price. I have in fact held it overnight and its showing a little bit of profit this morning (half of the divi hit regained anyway). I do think that this 6780 area is fairly key resistance, and corresponds with the 1982 S&P level. Am watching this level keenly today as if it breaks then 6800 is pretty certain, possibly a run to 6900 brewing. Certainly bounced back well after the wobble the other week. Even the various wars aren’t dampening the bulls! UK inflation dropped to 1.6% in July, ruling out a rate rise this year.
Asia Overnight from Bloomberg
Asian stocks fell after valuations reached the highest level this year and as BHP Billiton Ltd. (BHP) slumped, dragging materials shares to the largest decline on the regional gauge.
The MSCI Asia Pacific Index fell 0.2 percent to 148.59 as of 12:06 p.m. in Hong Kong, with seven of its 10 industry groups declining. The gauge closed yesterday within 1 percent of a six-year high as concern eased over global political conflicts. American data yesterday showed inflation pressures remain limited and housing starts jumped as the Federal Reserve watches economic reports to help gauge the timing of interest-rate increases.
“With valuations full, it doesn’t take much to disappoint the market,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “Short-term traders are reversing their position on BHP today. Economic news from the U.S. last night did nothing to dispel the picture of a favorable macro environment for stocks.”
Japan Trade
Japan’s Topix index climbed 0.1 percent after exports rose more than than estimated in July while imports unexpectedly increased. Hitachi Metals Ltd. added 3.2 percent to 1,789 yen after unveiling plans to pay $1.3 billion to acquire Waupaca Foundry Inc.
Hong Kong’s Hang Seng Index gained less than 0.1 percent, heading for the highest close since May 2008. The Hang Seng China Enterprises Index, which tracks mainland Chinese companies listed in the city, lost 0.5 percent. The Shanghai Composite Index and India’s S&P BSE Sensex Index declined 0.1 percent.
Singapore’s Straits Times Index gained 0.4 percent and Taiwan’s Taiex index added 0.2 percent. South Korea’s Kospi index slipped 0.2 percent. New Zealand’s NZX 50 Index gained 0.6 percent, while Australia’s S&P/ASX 200 Index was little changed.
Futures on the Standard & Poor’s 500 Index were little changed today after the gauge yesterday closed within 0.3 percent of an all-time high. The Nasdaq Composite added 0.4 percent, its fifth straight day of increases, to the highest closing level since 2000. Apple Inc. closed at a record high.
U.S. Inflation
U.S. inflation weakened to the slowest pace in five months in July, holding below the Federal Reserve’s target. Minutes of the Fed’s July 29-30 meeting, when the stimulatory bond-buying program was reduced by $10 billion for a sixth time, are released today and Fed Chair Janet Yellen will speak to global central bankers later this week.
Yellen, who has said key rates will stay low for a considerable time after the conclusion of asset purchases, will speak on labor markets Aug. 22 at the Fed Bank of Kansas City’s economic symposium in Jackson Hole, Wyoming. Policy makers including European Central Bank President Mario Draghi will attend.
The U.S. consumer price index rose 0.1 percent in July from the previous month and was up 2 percent from a year earlier, matching median economist estimates compiled by Bloomberg.
FTSE Outlook
Well I am still holding the short for the moment, though wight he daily pivot offering support at 6767 I am not hopeful of a really big drop but you never know! I should have taken the 10 on that initial drop after the level got hit. Hindsight is wonderful isn’t it! Anyway, for today, we still have resistance at 6780, though unless its bearish front he off then it looks like that will be broken and we get a rise to 6800. We have the top of the 10 day Bianca at 6612, so thats the next level to watch.
We have a fairly decent 30 minute channel in play, with resistance at 6785, so I’ll keep my stop as is (6792) for that channel to hold for a dip then to the bottom of it at 6757. If 6785 breaks then I think we will see 6800+. I am really only holding the short as the S&P is off its highs and could dip a little bit further from that 1982 area, as well as the fact the we are at, near or exceeding the Bianca daily channels. If the bears broke below the daily EMA levels at 6712 then the upside potentials are invalidated.