FTSE 100 Support 7006 6988 6986 6970 6965 6944 6907 6899
FTSE 100 Resistance 7009 7013 7023 7065 7107 7110
Good morning. Felt like the markets had already started their Christmas holidays yesterday with a very flat and lacklustre day across the board. There was a little dip to start with as the FTSE 100 went below 7000, then rallied back to 7010, gold hovered around 1339, Dax around 12400, and the S&P around 2265. Even a day of some fairly major news events didn’t inject much life,with an assassination of the Russian ambassador to Turkey, a mass killing in Germany and trouble in Switzerland. The Chinese have now also returned the US drone they nicked last week. The ASX200 (Australia) was fairly flat today ahead of the BoJ announcement shortly on further stimulus, and they have kept rates on hold. I think the FTSE 100 has a little further to pop up this week before the year ends, despite the geopolitical incidents yesterday.
I am just starting to roll out my Ayondo Social Trading set up. You can sign up here and follow me here. Will be sending more details round in due course.
US & Asia Overnight from Bloomberg
Asian shares declined as geopolitical concerns intensified after the assassination of Russia’s ambassador to Turkey and violent incidents in Germany and Switzerland. Japanese equities and the yen weakened after the Bank of Japan’s left its monetary policy unchanged.
The MSCI Asia Pacific Index slid to a two-week low and the Topix index of Japanese shares edged lower, led by energy and financial-services companies. Chinese equities fell to a six-week low amid waning turnover. The yen traded at 117.39 per dollar as of 1:26 p.m. after hitting a 10-month low last week. Gold held two days of gains as the geopolitical concerns stoked demand for haven assets.
The killing of Russia’s envoy added to a sense of geopolitical uncertainty after China last week seized a U.S. naval drone and fighting escalated in Syria. Equities have struggled to add to a month-long, post-election rally that took major American benchmarks to records, with investors favoring haven trades again after a bond rout left Treasury yields at the highest since 2014. Japan’s central bank upgraded its assessment of the economy while keeping policy unchanged in its first decision since Donald Trump’s election victory
“Markets are a bit overbought, we’ve seen huge gains since the election of Donald Trump,” said Shane Oliver, AMP Capital Investors head of investment strategy, speaking with Yvonne Man and Ramy Inocencio on “Bloomberg Daybreak: Asia.” “At some point we will see a bit of a pullback. I suspect that’s probably going to come some time in the first two months of the New Year. The real issues will be tension between the U.S. and China, and of course eurozone breakup risks which will come into focus with various elections across Europe over the next 12 months.”
Stocks
The Topix Index lost 0.3 percent as 1:21 p.m. Tokyo time. The Nikkei 225 Stock Average rose 0.2 percent, erasing earlier declines before the BOJ decision.
The MSCI Asia Pacific Index was down 0.2 percent, while the Shanghai Composite lost 0.5 percent.
Australia’s S&P/ASX 200 Index advanced 0.7 percent and the Kospi rose 0.2 percent in Seoul.
The S&P 500 Index rose 0.2 percent to 2,262.56 in New York, trimming a gain that reached 0.4 percent. The measure has advanced almost 6 percent since the Nov. 8 election, while the Dow Jones Industrial Average is up 8 percent.
Currencies
The dollar climbed 0.1 percent to 117.38 yen, after declining 0.7 percent in the previous session; the Australian currency was little changed, buying 72.55 U.S. cents.
A broader Bloomberg gauge of the greenback was little changed, heading for a rally of more than 7 percent this quarter.
The euro climbed 0.1 percent to $1.0417, holding its 0.5 percent slide.
Bonds
Yields on 10-year Australian government bonds fell three basis points to 2.83 percent, while those on similar-dated New Zealand debt retreated three basis points to 3.40 percent.
Yields on 10-year Treasury notes were up one basis point to 2.55 percent after dropping five basis points on Monday.
Commodities
Gold was little changed at $1,138.38 an ounce, after advancing the previous two days as the dollar weakened.
Oil declined 0.3 percent to $51.95 a barrel, after climbing 0.4 percent.
Zinc fell 0.5 percent, sliding for a third day.
[Bloomberg]
FTSE 100 Outlook and Prediction
The FTSE 100 closing above 7000 suggests that there is some strength still in it and as such I think that buying the dip this week is probably a good move, if only to catch the seasonal Santa Rally move. Its possible we get a bit more of a push higher this week, but the bulls will need to break 7023 where we now have resistance on the 2 hour chart. If they can then a trip to the top of the Bianca channels at 7100 looks possible, with a stutter at the 7080 area.
Support wise today we have the 200ema on the 30min chart at 6986, with the 10 day Bianca channel below that at 6970. A dip to this level represents a good spot to go long on. I think the S&P will push to 2300 before the year is out as well, before the tide turns and it retreats back towards a much lower level.
So, my plan today is to short around 7023 for a dip down to 6970 then see if we get a bounce from around that area.
DOW 20k coming today I think!