Good morning. Hope you had a good weekend. Well the low on Friday was 6785 and the long order was….. 6785 so just missed with the spread, and the S&P 2085 level held well too. Bit annoying really as I have 6782 pencilled in as the support so thought that was a good enough entry. Doh! With Greece deferring and bundling their payments they should be out the news for a couple of weeks now, till we are back where we were last week at the end of June. Presuming (a little bit dangerous), those 2 levels are the short term lows we might be on for a bit of a bounce now, at least until interest rate rises are back as the hot topic. China was bullish overnight, with shares rising to the highest level in seven years in volatile trade as bets that MSCI Inc. will include mainland shares in its indexes overshadowed weaker shipments data.
US & Asia Overnight from Bloomberg
Asia’s benchmark stock index held at a two-month low after better-than-forecast U.S. employment data bolstered the case for the Federal Reserve to raise interest rates this year.
The MSCI Asia Pacific Index slipped less than 0.1 percent to 147.83 as of 9:03 a.m. in Tokyo. The measure slid 2.3 percent last week, closing Friday at the lowest since April 3. Bets in interest-rate futures showed the odds the Fed will boost borrowing costs in September rose to 33 percent on Friday after the best U.S. jobs report in five months, from 27 percent before the data.
“The market will continue to consolidate,” said Khiem Do, Hong Kong-based head of multi-asset strategy at Baring Asset Management Ltd. “There are a number of uncertainties out there, especially since equities have performed very well this year. If bond rates continue to increase, that will rock equity markets. Investors have to be prepared for a U.S. rate hike this year given that the U.S. economy has been doing pretty well.”
A gauge of global bonds erased its 2015 gains last week as signs of price growth in the euro area reignited a fixed-income selloff. Yields on 10-year Treasuries rose on Friday to the highest since October.
Japan’s Topix index added 0.3 percent. New Zealand’s NZX 50 Index was little changed. South Korea’s Kospi index fell 0.2 percent. Markets in Australia are closed for a holiday, while those in China and Hong Kong have yet to open.
The Shanghai Composite Index climbed 1.5 percent on Friday, capping a 8.9 percent advance last week, the most since December. Price swings are widening, with the Shanghai index’s 100-day volatility measure at the highest level in more than five years.
China Rally
Record growth in margin debt helped add more than $4 trillion to the value of mainland Chinese shares this year as the Shanghai Composite surged 55 percent. While bulls say gains are fueled by confidence President Xi Jinping will succeed in turning the nation from an export-led manufacturer into a consumer-spending powerhouse, bears point to valuations as evidence of a bubble.
E-mini futures on the Standard & Poor’s 500 Index were little changed Monday. The underlying equity measure dropped 0.1 percent on Friday, posting its second consecutive weekly retreat. [Ref]
FTSE Outlook
I feel slightly bullish for the start of this week as I expect the market will be glad to not hear about Greece and their financial woe for the time being. With that 6785 area on the FTSE and 2085 S&P holding well on Friday I think we might have formed a bottom there for the moment. Buy the dips could be back, at least till the end of June when Greece rears back up. For today we have the top of the 10 day Bianca at 6930 and I am expecting a rise to that level. Just above that we have the 25ema on the daily at 6946. With the pivot as support at 6819 and the bottom of the 20 day Bianca for today at 6816 I think this area is worth a long initially, for a rise to the 200ema and top of the 30min channel at 68708/6870 respectively. Above that 6892 is the PRT major horizontal resistance so the bulls will be keen to break that to text the 6930 level. Support wise, below the pivot we have 6804, then 6765 for the bottom of that 30min channel and an area that might well be worth a long if seen (not sure it will be though).The bottom of the 20 day Raff is also 6770.
market hasn’t got a clue this morning
Looks like last week’s low is going to hold. Famous last words
The longer it holds, the bigger the hole underneath if it does break.
I’ve gone back to my scalping, that Masters of the Universe stuff is too stressful, I’ll leave it to the experts 😉
The more times it holds, the bigger the hole underneath when it does break.
I’ve gone back to my scalping, that Masters of the Universe stuff is too stressful, I’ll leave it to the experts 😉
Ooops, so profound I said it twice 🙂
tmfp. What size hole do you expect?
🙂
100 points or so?
That would leave it oversold on the daily rsi and around the March lows, so then maybe a bounce.
If that area doesn’t hold or just dead cat bounces, then technically I don’t see why a test of 6200 isn’t on the cards by the end of the summer.
This would imply some fundamental mayhem going on, there’s plenty to potentially choose from.
Nobody ever talks about the Ukraine any more…
These increasingly feeble bounces off 85/90 must be concerning for bulls.
The 5 min says to me that, unless we start posting some short term higher highs soon, starting with 15 and 26 then 34, then by noon we will be seeing heavy pressure on the lows.
A break above 65 on the 3 min 10 rsi might be the start of a rally, if it’s to come this morning.
Thanks for that. yes very clear.
you might add 09 to 15, 26 and 34 now
Very short term, if we get a 1 min candle to open and close above 04 it may be the start of some upside.
So does it mean anything that the above failed?
Yes, it means I made 13 points lol.
There’s obviously still more buying than selling around 85/90, but it peters out pretty quickly hence the inability to break the 3min 65 rsi or make even a short term new high.
The morning’s downtrend line has been broken, so I’m playing it purely 20-25/70-75 on the 1min 10 rsi with 7 point stops, looking to take another 11 pts now at 92 on my 12 o’clock short and long for another small bounce.
Scalping directionless markets: love it 🙂
Great work!!!
Doesn’t always work, shorted at 04, stopped at 11 🙁
Now 3min rsi has broken 65, will be looking to long a pullback to ~50, while it stays above 40 the theory is there’s some more upside to come, or short 6820+, too far too quick.
Short 25 stop 34
took 13, 57 rsi.
That’s the morning downtrend cleared then. 4 minutes after after a little stop hunt lower
Can you be sure? All the other Euro indicies dow and SNP are down almost to day lows.
Dangerous waters out there
Shark infested, I’d say!
Make up your mind Ftse …
The bulls are out in force!
Ftse holding well. Clawed some funds together for a decent S&P long.
2087 could hold…. otherwise 2083
What next Nick?
Hopefully nick! Is 2040 next support?
Guys, anyone see a big drop coming this week?
Big move*