Good morning. Well we got the dip and then the slow rise yesterday though it didn’t unfortunately dip as far as the pivot for the optimum entry. The bulls were trying to go for 6656 but unfortunately failed at 6647 before profit taking dropped the price back to 6620. We are still above the 10 day Bianca channel so breaking out of that, though a back test support level is 6617 for today. The rise was very slow so though the bulls tried, it was pretty weak. There is quite a large divi today, 21 points, which may see some divi hunters towards the close, as this week backdrop is a bit more postiive than last weeks!
Asia Overnight from Bloomberg
Asian stocks rose, with the regional index heading for its biggest two-day jump since May, while the dollar climbed against the euro, New Zealand currency and yen. The cost of insuring Asian debt declined with wheat.
The MSCI Asia Pacific Index added 0.4 percent by 1:39 p.m. in Tokyo following yesterday’s 1.2 percent increase. Australia’s S&P/ASX 200 Index rose 1.2 percent. Standard & Poor’s 500 Index futures climbed 0.1 percent after a second day of gains in the U.S. stock measure. The Bloomberg Dollar Spot Index strengthened and New Zealand’s dollar slid against all major peers. A gauge of Asian credit-default swap prices dropped a second day. Wheat retreated.
Global equities are rebounding amid speculation a proposed Red Cross aid mission in eastern Ukraine may help to ease tensions and on optimism U.S. bombing will help push back militants in Iraq. Shanghai shares retreated from a eight-month high before China reports July lending and industrial-production figures this week. The ZEW Center for European Economic Research issues surveys of investor confidence in the euro area and Germany today, before U.S. data on job openings in June.
“It looks like some of the geopolitical concerns are easing,” Nader Naeimi, head of dynamic asset allocation at AMP Capital Investors Ltd., which manages about $131 billion, said by phone from Sydney. “Overall, it will be a good day, we should see stabilization in the equity market and markets should be able to gain some of the lost ground.”
Volatility Drops
The S&P/ASX 200 Index climbed in Sydney after adding 0.4 percent yesterday. BHP Billiton Ltd., the world’s biggest miner, led gains with a 1.5 percent advance. The Kospi (KOSPI) gauge in Seoul rose 0.1 percent, increasing a second day.
Japan’s Topix index added 0.4 percent after climbing 2 percent yesterday, its biggest gain since April. The Nikkei Stock Average Volatility Index of options prices for Nikkei 225 stocks dropped a second day. Markets in Thailand remain closed today for a holiday.
Hong Kong’s Hang Seng Index slipped 0.1 percent and a gauge of Chinese shares in the city retreated after jumping 1.9 percent yesterday amid speculation that below-target inflation in China allows room for more economic stimulus. The Shanghai Composite Index, which closed at the highest since Dec. 10 yesterday, declined 0.2 percent.
China
China will release other July data on industrial production, fixed-asset investment and retail sales tomorrow. Factory output probably rose 9.2 percent from a year earlier while retail sales growth accelerated to 12.5 percent from 12.4 percent a month earlier, according to median estimates.
World Equities
The MSCI All-Country World Index, down 3.2 percent from a record close on July 3 through yesterday, was less than 0.1 percent higher after its steepest advance since April yesterday. The S&P 500 rose 0.3 percent to 1,936.92 last session. Futures on the Dow Jones Industrial Average were 0.2 percent higher after the gauge climbed 0.1 percent yesterday.
FTSE Outlook
I am thinking a similar pattern to yesterday for today, that is a dip and a rise. The dip to the support area at 6610/6615 then a climb back towards 6647. If the 6647 level is broken then then next resistance levels to watch are 6654 and possibly as high as 6676. Though based on the speed of the rise yesterday that might be stretching it! Below 6610 the next support is 6580 then 6520.
I have plotted the arrows for todays direction on the 10 minute chart as it showed the support a bit clearer. We have the daily pivot at 66115 (live charts) and 6622 (IG) as well as the extension bottom of the 10 minute channel that is currently in play at 6610. With S1 monthly at that level too I think the FTSE will find support between 6610 and 6620 so will set 2 orders at half stakes at each of those figures. The 30 minute 200EMA is also 6619.