Support 6365 6355 6351 6323 6315 Resistance 6382 6419 6453 6470

Good morning. The FTSE traded strongly to the upside after the BOE meeting implied UK interest rates would be on hold for longer than expected. In the afternoon however Wall Street pulled the FTSE100 back on stronger dollar concerns and interest rate worries for the US. This impacted oils, commodities and some banks. An added concern was the US non farm payroll figures which are due today triggering some profit taking after the recent rises.

US & Asia Overnight from Bloomberg
Most Asian stocks advanced as investors awaited U.S. jobs data to gauge whether the economy is strong enough to withstand the first Federal Reserve interest-rate increase in almost a decade.

About three shares rose for every two that fell on the MSCI Asia Pacific Index, which traded little changed at 134.81 as of 9:01 a.m. in Tokyo. Economists expect the October jobs report Friday to show an increase of 185,000 non-farm workers, compared with a 142,000 gain the previous month. Federal Reserve officials from Chair Janet Yellen to Atlanta chief Dennis Lockhart underlined this week that the central bank is still data dependent. The prospect of higher U.S. borrowing costs this year has muddied the rally in global stocks from last quarter’s selloff, with central banks in Japan and the euro area remaining coy over whether they’ll bolster stimulus.

“The market is on tenterhooks ahead of the U.S.. non-farm payrolls,” Angus Nicholson, an analyst at IG Markets Ltd. in Melbourne, said by phone. “U.S. data has been somewhat mixed but the market has been responding more strongly to the Fed statements this week that they could hike rates this year.”

Japan’s Topix index added 0.3 percent as the yen held four days of losses against the dollar. South Korea’s Kospi index slipped 0.2 percent. Australia’s S&P/ASX 200 Index fell 0.6 percent. New Zealand’s S&P NZX 50 Index was little changed. Markets in China and Hong Kong have yet to start trading.

China Shares
China’s Shanghai Composite Index gained 1.8 percent to 3,522.82 on Thursday, taking its advance from its Aug. 26 low to more than 20 percent and entering a bull market. The government took extreme measures to shore up equities as a boom turned to bust in June, including banning major stockholders from selling shares, curbing short selling and directing state funds to purchase equities. Margin debt is also rising and trading volumes have stabilized. The Hang Seng China Enterprises Index of mainland stocks in Hong Kong added 0.5 percent on Thursday.

“Perhaps some healthy gains could continue until the Shanghai index reaches the 4,000 level,” IG’s Nicholson said. “There should be quite a lot of positive economic data coming out of China as we go into the fourth quarter because there has been a significant amount of monetary easing.”

E-mini futures on the Standard & Poor’s 500 Index lost 0.1 percent on Friday. The underlying U.S. equity gauge slipped 0.1 percent on Thursday as investors weighed the outlook for interest rates and the economy. Traders are predicting a 56 percent chance the Fed will raise rates at the December meeting. [Bloomberg]

FTSE Outlook

FTSE 100 Prediction
FTSE 100 Prediction

It’s NFP Friday today with the news due out at 13:30 and forecasted at 184k versus 142k previously. As such we may well see a bit of buy the rumour, sell the news today. I have plotted that accordingly for the prediction with a short off the top of the 10 day Bianca at the 6419 area. We also have the top of a declining PRT channel line at 6415 so this area is worth a small short. Support wise, we have the 6355 area as decent support from a rising PRT line, and yesterdays low at 6353. Initially the bulls need to break the daily pivot at 6382 to push up to the higher resistance levels, so longing a break of that will be worth trying, otherwise if it dips down to the 6360 area a long here. Stay nimble today!

48 Comments

    1. Morning custard, beat you to it, short premarket at 80 and just now at 72, working on the basis that 55 ish should hold for the time being, just taking out half at 57.
      GL.
      Be careful at 13.30, see my theory below 🙂

      1. Jim bearish? What’s going on lol?
        If we see the 40’s soon I reckon we might have a look at 25/30, but expect it to be pretty quiet this morning.

  2. Non Farm Payroll is the biggie today at 13.30 so here’s my thoughts.
    175 to 200k seems to be the expectation, but it’s not as simple as that because of the Fed and interest rates. There’s only one more NFP before the crunch Dec meeting so this one will be important.
    From an interesting page here http://www.fxstreet.com/analysis/research-note-us-nonfarm-payrolls/2015/11/05/ he tries to balance the natural bearishness of bad figures (poor economy) with the bullishness of bad figures postponing an interest rate rise.
    The tl:dr is 200,000 slightly bearish for equities.

    Also, the HFT programs haven’t made much money in the recent range bound trading, so be on high alert for shennanigans. We could see stop hunting in both directions so be very careful if you’re going into 13.30 with an open position.
    I probably won’t be here, so good luck all and remember, there’s always another trade.

    1. and lost a bit of text there
      under 150,000 is seen as slightly bullish because interest rates will likely stay unchanged.
      Evan Lucas on IG writes well this morning about the ongoing effect of CB activity on equities and makes the case that, although P/E’s are not historically high, the E bit needs improving because they can only consolidate, streamline and cut capex for so long before diminishing effect comes in.

  3. Morning all, tricky weak, but ftse still playing the overall range 6450-6350 all week, hopefully NFP provides a breakout from this range? Agree with TMFP, be careful with NFP time and not worth the risk of giving weeks gains back in seconds during NFP…GLA

    1. Morning all,there seems to be a spread of about 90’000 on estimates to give the Consensus range and then the high and the low from that as Bearish/Bullish eg Consensus 190k from a range of 150 to 240 and 150 to 200 neutral,less than 150 Bullish and greater than 250 Bearish.Then there is the argument about Seasonal stuff.Last time it was 142000 so maybe this could be more of a non event than usual, given that the Yellen stuff is already out there,unless we are a way above 250 for Bearish or below 142 for Bullish ?
      Given what Draghi has already said re Europe and QE and the likely effect on USD vs Euro of a slight raise in U.S rates,when the dust settles,a bit of a swing either way might not move us anywhere.Last Friday close was 6361.

  4. Forget NFP … Nick’s running his seminar today. 100% chance (based on previous statistical evidence) that we’ll be going down this afternoon 😉 Surprised he didn’t forecast it himself. DO NOT TRADE ON THIS ADVICE!

  6. Oh dear dear. Story in Balamory today. It’s all very scary. I had long 10874. Did I win anything. No. When it burst up and I thought, that’s great it’s going to shoot to 10980. The second I thought that I was in -13 and thought f.it and closed -13 cos I looked at Dow – it looks really wrong. Then I noticed the price started going up on Dax after all and I went long and got 20 odd points. So now tell me, is there any reason to go into this in the first place?

    1. Dax and Dow look completely opposite in terms of layout of my indicators. So I wouldn’t bet there’s any directions now. FTSE is a complete mess.

  7. I don’t think these figures out today will have any bearing on market sentiments. You can read them positively (economic recovery) or negatively (interest rates). I think the reaction will be neutral.

      2. lol nice one.
        Getting tempted for a short yet (91)? My finger’s itching…..I think I’d like to see the DOW have a go at 920 first.

          8. When you said a keeper I thought you meant for 6320 later 🙂
            No, 85 was a red herring really just about as soon as I said it (with hindsight).
            I do reckon if 40 goes then 20 is on the cards.
            Could get a bit messy later.

            Excuse me while I kick the cat.

          9. RSPCA here,kindly refrain from mistreating our feline friends when they are feeling a bit delicate.

          10. yes I thought it was a keeper – you put me off! waiting for a little bounce to close flat my 52

          11. Do you really want to be long, or do you think it will retrace, cos I think this is a dead cat and there’s more downside short 50

          18. I was looking for more weakness into the close but it didn’t happen and came out with pennies.
            Still think it’s not over yet today on the downside, but I am.

            Good weekend all.

  9. That’s me finished for the day.I’ve transferred the afternoon to my Current account 🙂 and I’m off to buy a case of Liebfraumilch 🙂 thank you Dax,have a good weekend everyone.

  10. Afternoon chaps I was feeling a little uncomfortable going in the NFP with long positions on Ftse and Dow so I closed my Dow long from 901 for a loss of 57.5 points then I bought it back at 789 nearly at the bottom of the sell off at NFP and I sold it again at 905.5 for +116.5 points overall gain of 59 points and my FTSE long is into profit now,nice when it comes together good luck all.

      1. No I’m too greedy I had 70 pts but planned for 895 it reversed at 885,still think I will get it again at 900 ish , well you have to think positive :0)

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