Good morning. Yesterday played out as per the arrows till later in the day when the bulls managed to break the 6744 level and we have had a slow climb since. This has brought the 6674 level into play as the next resistance now as we have the Bianca 10 day channel top at this level now. We are breaking out of the 20 day, 6724, but also nearing the top of the 20 day Raff. As such I am still thinking we will get a dip shortly, maybe from this 6774 area? The S&P is just testing its coral line now at 1973 (though slightly above). Couple of intersesting things on twitter yesterday, I take both with a pinch of salt though – Barclays sees the S&P running out of steam here and London has been crowned the most influential city in the world by Forbes. Makes a change from reading about wars doesn’t it! Today is divi day, expected to be 11.1 points.
Asia Overnight from Bloomberg
Asian stocks rose after confidence in the U.S. housing industry climbed to the highest level in seven months and tensions eased over global political conflicts. Hong Kong shares headed for the highest close in six years.
The MSCI Asia Pacific Index (MXAP) gained 0.6 percent to 148.86 as of 12:06 p.m. in Hong Kong, with all of its 10 industry groups rising. The gauge jumped 2.7 percent last week, the most in four months, as concern eased over global conflicts from Ukraine to Gaza and Iraq. A measure of U.S. homebuilder sentiment yesterday showed confidence rose in August, indicating the industry is making more headway as the Federal Reserve watches economic data to help gauge adjustments to monetary stimulus.
“Improvements in the situation in Eastern Europe and better homebuilder sentiment has heightened optimism,” Matthew Sherwood, head of investment markets research at Perpetual Ltd. in Sydney, which manages about $29 billion, said in an e-mail. “U.S. activity is progressively improving.”
Regional Gauges
Hong Kong’s Hang Seng Index advanced 0.1 percent, heading for the highest close since May 2008. The Hang Seng China Enterprises Index of mainland stocks traded in the city was little changed. The H-share gauge rose 20 percent from this year’s low in March through yesterday amid speculation China will add stimulus to meet its growth forecast.
Japan’s Topix index increased 0.6 percent and Australia’s S&P/ASX 200 Index rose 0.5 percent. Taiwan’s Taiex index and New Zealand’s NZX 50 Index both added 1 percent. Singapore’s Straits Times Index rose 0.1 percent and India’s S&P BSE Sensex Index advanced 0.5 percent. South Korea’s Kospi index gained 0.9 percent.
Futures on the Standard & Poor’s 500 Index advanced 0.1 percent today after the gauge rose 0.9 percent yesterday. An S&P index of stocks of U.S. homebuilders gained 2.1 percent to the highest in three weeks. The Nasdaq Composite Index climbed to a 14-year high.
Israel and Palestinian militants agreed to extend their five-day truce by 24 hours. In Iraq, Kurdish and government forces retook the nation’s largest dam from rebels. The Red Cross is close to working out details of a safe-passage plan for a Russian aid convoy intended for southeastern Ukraine. Ukrainian Foreign Minister Pavlo Klimkin met Russian counterpart Sergei Lavrov for more than five hours of talks in Berlin as they sought to ease tensions.
FTSE Outlook
We have a load of resistance around the 6774 level today looking at the daily charts, and the S&P is also hitting 1974 resistance too. I think the bears will have a go at this 6774 area, though how far they can drag it down remains to be seen. We have support at 6748, and the daily pivot below that at 6725. There is an 11.1 divi today, not massive and probably won’t bring the divi hunters out in the closing minutes, but you never know! We are not far off this key level as we look to open so I think we will see a bit of a dip initially.
Not too much more to say really, looking to short at 6774 for a decent drop and hopefully the bears can break 6748, as that will then lead to 6684. I’ll try a small long at 6748 with a tight stop just in case it does bounce. All a bit counter trend initially though as there is a slow rising trend since yesterday.