Good morning. Well todays the day that sees the launch of the super ISA’s with over £1billion expected to be deposited in the next 72 hours, as everyone has been waiting till today to move cash into them.
Not too bad yesterday; the bulls failed to break the 6775 level so the short ran down to target at 6753 (and a bit more in the end); the Dax 9890 level was nailed perfectly for a decent run down as well, though I closed a bit early at 9850. Unfortunately the long off the pivot failed, though we did get a bounce from lower down – 9800 Dax and 6730 FTSE. We are looking at opening pretty much on the daily pivot at 6750 today. Todays dividend is 1.27 so be aware of that.
Today remains with the 6775 resistance, though if the bulls can get above 6800 then they would be above the daily EMAs and the potential for 6900 soon increases.
Asia Overnight from Bloomberg
Asian stocks rose, with the regional index headed for a six-year high, driven by a rally in Japanese stocks as investors weighed a survey of business sentiment.
The MSCI Asia Pacific Index (MXAP) gained 0.4 percent to 146.21 as of 12:57 p.m. in Tokyo, heading for the highest close since June 9, 2008, as nine of its 10 industry groups rose. The gauge climbed 5.6 percent in the quarter ended yesterday. Japan’s Topix (TPX) index added 1.2 percent today as the central bank’s Tankan survey showed companies raised their investment plans more than forecast even as a sales-tax increase dented sentiment.
“There are still some positive numbers we can look at in the Tankan,” Takuji Okubo, chief economist at Japan Macro Advisors, told Bloomberg TV from Tokyo. “They have revised up capital expenditure growth. Japanese companies are enjoying profit growth, they are flush with money and they are deploying and spending that.”
South Korea’s Kospi index lost 0.3 percent. Australia’s S&P/ASX 200 Index fell 0.2 percent before theReserve Bank of Australia is projected to keep its key interest rate at a record low today. New Zealand’s NZX 50 Index climbed 0.2 percent.
Democracy March
Taiwan’s Taiex index rose 0.6 percent, while Singapore’s Straits Times Index slid 0.4 percent. The Shanghai Composite Index lost 0.2 percent. India’s S&P BSE Sensex Index rose 0.4 percent.
Markets in Hong Kong and Thailand are closed for holidays. Tens of thousands are set to march in Hong Kong today to demand full democracy on the anniversary of its return to Chinese rule.
Large Japanese companies across all industries plan to increase capital spending by 7.4 percent this fiscal year through March, more than a 0.1 percent gain they signaled three months earlier, the Bank of Japan report showed today. That beat a median 6 percent boost forecast in a survey of economists byBloomberg News. A gauge of sentiment among large manufacturers fell to a reading of 12 from 17 in March.
China Manufacturing
China’s manufacturing expanded in June at the fastest pace this year. The Purchasing Managers’ Index was at 51, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today, matching the median estimate of analysts surveyed by Bloomberg News. May’s reading was 50.8, with numbers above 50 signaling expansion.
The final reading of a purchasing managers’ index from HSBC Holdings Plc and Markit Economics rose to 50.7 in June from 49.4 in May.
Futures on the Standard & Poor’s 500 Index gained 0.1 percent today. The stock measure was little changed yesterday, capping the longest string of quarterly gains since 1998, as a jump in pending home sales offset weaker-than-forecast manufacturing data.
Home Sales
The number of contracts to purchase previously owned U.S. homes jumped 6.1 percent in May, the most in more than four years. The Institute for Supply Management-Chicago Inc.’s business barometer fell to 62.6 in June from 65.5 in May. The median forecast of economists in a Bloomberg survey projected the index would drop to 63.
The Institute for Supply Management’s U.S. manufacturing index today will probably rise to 55.9 for June from 55.4 in May, according to economists surveyed by Bloomberg.
FTSE Outlook
If 6750 holds as support today, being the daily pivot, then the bulls we be able to test 6778 again (yesterdays high), with 6804 (top of the 20 day Bianca) and then 6815 bull targets after that. IF (big if) the bulls hold above 6800 then I think we will see 6900 soon. Even though we have drifted down the bears haven’t really “grabbed the bull by the horns” (ha ha) and prices are still holding up pretty well. 6700 is still the lower line in the sand for the moment – if that were to break then we wont rise, and in fact could start a summer drop to 6500. I am favouring a bit more upside first though.
This morning I am going for the pivot holding, a break of that 30 minute channel as its the start of a new month and as such we should see some share buying. For a run to the top of the Bianca channel at 6804. I think we will stumble a bit there, but if the bulls can hold on then push to the higher target at 6815 is possible. So buy the dips really today, though the slight hiccup to this is that both the Bianca channels are around the 6800 area – 6792 for the 10 day and 6804 for the 20 day – as well as the Raff channels. So the 6804 shorting area should be good for a few if those daily channels hold.