Support 6139 6128 6125 6123 6084 6031 Resistance 6182 6226 6248

Good morning. Was a bit too early with the 6070 level long yesterday as it dipped dow to the bottom of the Bianca 10 day channel at 6035 (6020 was the low) in the end before rallying for the rest of the day, as the US dragged things up. The S&P closed at its highest level since 28th August after retail sales data bolstered confidence in the U.S. economy. With the Fed rate announcement tomorrow the market is expecting rates to remain on hold, given the recent volatility and poor data. 32% chance currently of them raising rates.

US & Asia Overnight from Bloomberg
Asian stocks rose, following a rally in U.S. equities, as investors sifted through the latest data on the world’s biggest economy before the Federal Reserve’s decision on interest rates.

The MSCI Asia Pacific Index climbed 1 percent to 127.90 as of 9:08 a.m. in Hong Kong, with consumer and industrial shares leading gains. The Standard & Poor’s 500 Index advanced 1.3 percent on Tuesday as a report showed U.S. retail sales climbed for a second straight month, a sign shoppers may be looking past recent volatility in financial markets. The Fed is about to decide whether the economy can withstand higher borrowing costs, with odds on a rate hike on Thursday climbing to 32 percent from 28 percent a week ago. That’s still down from more than 50 percent before China roiled global markets by devaluing the yuan.

“Uncertainty will continue until we get the news from the Fed,” James Lindsay, who helps manage the equivalent of about $3 billion in assets at Nikko Asset Management NZ Ltd. in Auckland, said by phone. “The market is finely balanced on whether the Fed will move or not. There’s been uncertainties about China and global growth, but the U.S. economy looks strong enough to be able to withstand an increase in rates.”

Japan’s Topix index rose 1.3 percent. South Korea’s Kospi index increased 1.6 percent. Australia’s S&P/ASX 200 Index added 1.2 percent and New Zealand’s NZX 50 Index gained 0.3 percent. Markets in China and Hong Kong have yet to start trading.

The Shanghai Composite Index sank 3.5 percent on Tuesday, bringing its two-day loss to 6.1 percent, amid concern government measures to support the world’s second-largest equity market and economy are failing.

E-mini futures on the Standard & Poor’s 500 Index were little changed on Wednesday. [Bloomberg]

FTSE Outlook

Its a little bit tricky at the moment so I have just gone for the one FTSE long off the 6130 support area and will see if we get a rise after an initial dip. The 10min chart is a bit bearish to start with hence why I am thinking a little dip initially. With the Fed tomorrow a lot of people will be in wait and see mode until we know what they are doing with rates. I am still feeling fairly positive for seeing 6400 in September. Today pivot is 6125 and there are a few other supports around that areas as you can see in the support/resistance levels section of this email. The 10 day Bianca channel held well and has 6031 for support today, but I don’t think we will get that low. I expect the bulls to try and build a bit on yesterdays climb, but they will need to break 6180 to push higher. If so then that leads to a test of the 6250 area, where we have the top of the 10 day Bianca and also a PRT line on the daily. It really is all eyes on the Fed at the moment though.