Support 6175 6170 6145 6115 6097 Resistance 6197 6205 6235 6297 6352 6374

Good morning. I can’t say Im surprised that they didn’t raise rates as it still feels a bit early, however Yellen inferrered that they may well come this year. US data is fairly positive at the moment, though globally not quite so much. There was the usual volatility as the decision was announced with a move higher to 6250 quickly reversing to 6155. Overnight the FTSE has hovered around the 6175 area. Unfortunately both my longs yesterday got stopped out as the FTSE dropped below 6200 before bouncing off the 200ema at 6183 prior to the rate news. The gold long at 1116 came good though so not all bad.

US & Asia Overnight from Bloomberg
Asian stocks outside Japan rose as the Federal Reserve’s decision not to raise interest rates fueled concerns about the strength of the global economy.

The MSCI Asia Pacific Ex-Japan Index added 0.7 percent to 411.49 as of 11:13 a.m. in Hong Kong. Japan’s Topix index slid 1.4 percent after the yen gained against the dollar. U.S. rates will remain near zero for at least another month after the Fed’s decision, which showed policy makers are reluctant to end record monetary stimulus at a time when uncertainty over China and other developing nations is whipsawing global markets. Odds of an increase this year have fallen below 50 percent, with Fed Chair Janet Yellen saying the recent turmoil may restrain the U.S. economy and suppress already slow inflation.

“It’s a supportive outcome for markets and provided a reminder the Fed’s not going to do anything stupid,” Shane Oliver, global strategist at AMP Capital Investors Ltd., which manages $112 billion, said by phone from Sydney. “If you’re overweight equities, you probably say: the Fed’s not going to harm us. It’s quite possible that this gets pushed out further and further, into next year.”

China Housing
Chinese stocks in Hong Kong rose as improving property data boosted developers. The Hang Seng China Enterprises Index of mainland stocks traded in the city advanced 0.5 percent, while the benchmark Hang Seng Index gained 0.3 percent. The Shanghai Composite Index slipped 0.2 percent, after climbing as much as 1 percent earlier.

Data released today showed China’s home prices rose in August in half of the 70 cities monitored by the government. Signs of an strengthening real estate market may alleviate some concerns about China’s economy after recent data showed weakness in manufacturing and industrial output.

South Korea’s Kospi index increased 0.5 percent, while Australia’s S&P/ASX 200 Index added 0.6 percent. New Zealand’s S&P/NZX 50 Index added 0.4 percent and Singapore’s Straits Times Index climbed 0.7 percent. Taiwan’s Taiex index gained 0.2 percent.

U.S. Futures
E-mini futures on the Standard & Poor’s 500 Index gained 0.2 percent. The underlying U.S. equity benchmark gauge dropped 0.3 percent on Thursday.

Yellen said most Fed officials still expect a rate increase this year and that the U.S. economy is performing well. She reinforced that the path of rate increases would be gradual. Odds of a hike in October are now at 17 percent, and bets on one in December have slumped to 45 percent, from 59 percent a week ago, according to fed funds futures.

“The reality is that the rate hike is still going to come, whether it’s before the end of the year or in 2016,” Tai Hui, the Hong Kong-based chief Asia market strategist at JPMorgan Asset Management, which oversees about $1.7 trillion, told Bloomberg TV in Hong Kong. “So I don’t believe we’ve cleared anything.” [Bloomberg]

FTSE Outlook

We are starting the day with 2 declining channels on the 10 minute and 30minute chart, and with the daily pivot at 6197 I think we may see an initial dip. The bulls failed to hold onto the 6250 area that we rose too during Yellen’s press conference yesterday, so might need a bit more momentum next week to see that level again. The daily channels (10 day at least) are still heading up, with the Bianca one showing resistance at 6297, and support at 6097. The 30minute trend is currently down so I think a short around that pivot area could well be worth a go today, while the markets digest the Fed keeping rates on hold for a while longer. Might well be next year till they rise now. It will be interesting to see if the bottom of the 10min channel holds at 6145 as if not then the 30 day one is down at 6117, with the bottom of the 10 day Bianca at 6097. We bounced well of this earlier this week at 6035ish, so this second test might be worth a long as well (its the third test of a key level thats the one to watch as it usually breaks).