Good morning. What is it with July 2014 and trending days?! Another one way street yesterday that popped through the resistance levels then failed to reach the 6807 short order after all that! That 6808 is still resistance for today, though yesterdays high at 6794 is now the line in the sand in the near term. Yellen repeated her speech from Tuesday so the market didn’t need to react as much this time, though has come off a bit overnight. Todays pivot at 6762 should act as initial support, though looking at the S&P that wasn’t as strong as one would think after that FTSE action -though it popped above the 1982 resistance it didn’t really hold and has dropped back to 1975.
Asia Overnight from Bloomberg
Asian stocks were little changed, after the regional benchmark index briefly touched a six-year high, as material and industrial shares advanced, while technology firms retreated.
The MSCI Asia Pacific Index (MXAP) gained less than 0.1 percent to 147.20 as of 12:32 p.m. in Hong Kong, paring gains of as much as 0.4 percent. About as many shares rose as fell. Federal Reserve Chair Janet Yellen yesterday said asset valuations in general aren’t out of line with historical norms after the central bank the day before indicated prices for smaller U.S. social-media and biotechnology companies are substantially stretched.
“The market can still rally in front of an improvement in earnings,” Donald Williams, Sydney-based chief investment officer at Platypus Asset Management Ltd., which oversees about A$1.3 billion ($1.2 billion), said by phone. “With interest rates very low, equities are still a pretty good place to be. The thing that keeps holding up equity valuations is that bond yields are so low globally.”
Regional Gauges
Japan’s Topix index gained 0.1 percent and South Korea’s Kospi index rose 0.5 percent. Taiwan’s Taiex index and Singapore’s Straits Times Index sank 1 percent.
Hong Kong’s Hang Seng Index declined 0.2 percent and the Hang Seng China Enterprises Index (HSCEI) of mainland Chinese stocks slipped 0.4 percent. The Shanghai Composite Index dropped 0.8 percent. New Zealand’s NZX 50 Index and India’s S&P BSE Sensex Index added 0.1 percent.
Australia’s S&P/ASX 200 Index gained 0.4 percent. The nation’s Senate voted to scrap a price on carbon today, dismantling a law introduced by the previous Labor government that initially charged polluters A$23 ($21.50) per ton of greenhouse gases emitted.
The MSCI Asia Pacific Index traded at 13.5 times estimated earnings at the last close compared with 16.7 for the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.
Profit at members of the S&P 500 probably rose 4.5 percent in the three months through June, while sales gained 3.1 percent, analyst estimates compiled by Bloomberg show.
Futures on the S&P 500 declined 0.2 percent today after the U.S. equities benchmark rose 0.4 percent yesterday.
FTSE Outlook
Yesterdays high of 6794 is the first level of resistance today, and we have the daily pivot at 6762 to act as support on this dip we have had overnight. Updating the Bianca channels with yesterday figures gives us a new channel high on the 10 day at 6793 – the same level it topped at yesterday. There is a pretty decent rising channel on the 30minute chart, with the top at 6803 ands the bottom at 6720ish, along with that red PRT line at 6723. A move below this level would invalidate the rising potentials and a drop to 6636 is on the cards. The main news of note is at 10am, with Eurozone CPI, expected at 0.8%.
So, today I am thinking this initial overnight dip will find support at 6762 daily pivot, then put in a bounce, which will either stall at 6787 where we have the falling PRT line from yesterdays high, or push on to 6808 and the top of the 20 day Bianca channel at 6834.