Support 6368 6360 6325 6322 Resistance 6418 6423 6462 6468 6480 6505

Good morning. We got a decent rise on the FTSE first thing, that triggered the 6330 buy level to reach the first target at 6355. Unfortunately that rise stopped just short of the 6365 order to short, which was a shame as it then dropped 40 odd points. The US bulls were out in force for the afternoon session though and the second rise saw 6365 break and to reach a high of 6404. With 6376 breaking yesterday the tide has turned bullish and Im looking at a possible rise towards the top of the Bianca channels today at the 6460 area. With a new month starting and investors perhaps expecting the usual pre Christmas rally any dips now could be buying opportunities. The commodity sector was the worst performer yesterday on the back of the China data but banks pushed forward on the back of good results in the sector.

US & Asia Overnight from Bloomberg
Asian stocks climbed after signs of stabilization in global manufacturing activity helped drive the Standard & Poor’s 500 Index to levels not seen since before China’s yuan devaluation in August. Australia’s dollar extended gains as the central bank held interest rates steady.

The MSCI Asia Pacific excluding Japan Index rose for the first time in six days amid signs of resilience in U.S. and European manufacturing and after measures of factory activity in China stabilized, albeit at levels denoting contraction. S&P 500 futures fluctuated after the gauge jumped 1.2 percent. The Aussie rose for a third day, while the Bloomberg-JPMorgan Asia Dollar Index was headed for its highest close in a week.

“Investors have realized the world isn’t about to end,” Shane Oliver, a Sydney-based global strategist at AMP Capital Investors Ltd., said by phone. “The rally has been partly contingent on support from central banks, with the easing in China and talk of easing in Europe. With some economic indicators improving a little bit, the RBA has put rates on hold and at the same time signaled an easing bias.”

China’s surprise currency move on Aug. 11 ignited the most volatile quarter for global markets since 2011 and led to the Federal Reserve citing the risks to global financial markets in its September decision to hold rates near zero. The focus now is firmly on central banks, with Japan and Europe indicating they’ll hold fast to stimulus amid increasing bets on the Fed raising rates before the end of 2015. Payrolls data due later this week will be key to determining the path of U.S. monetary policy.

Stocks
The MSCI Asia Pacific excluding Japan Index added 0.8 percent by 2:03 p.m. Tokyo time. Even after posting its best monthly performance since 2012 in October, the index is still about 4 percent below its closing level on Aug. 10, the day before China cut the value of the yuan. MSCI’s Asia Pacific gauge, which includes Japanese equities, is down 2.8 percent this year.

Australia’s S&P/ASX 200 Index rose 1.3 percent in Sydney, after sinking the most since Sept. 29 on Monday. The Kospi index in Seoul climbed 0.5 percent, while New Zealand’s S&P/NZX 50 Index added 0.6 percent, rising for the first time in three days and returning to a record high.

The Hang Seng China Enterprises Index climbed 1.1 percent after a five-day, 4.7 percent slide. The Hang Seng Index rose 1.4 percent. China’s Shanghai Composite Index fluctuated.

“The savage selling yesterday particularly looked to be overdone,” Evan Lucas, a markets strategist in Melbourne at IG Ltd., said in an e-mail to clients.

Futures on the S&P 500 swung between gains and losses after the index closed at 2,104.05, the highest since Aug. 10. Nasdaq 100 Index futures were also little changed after the technology gauge reached a 15-year high. Contracts on London’s FTSE 100 Index added 0.5 percent. [Bloomberg]

FTSE Outlook

There is initial resistance at 6420ish this morning where we have a declining 30 min channel line, and with an expectation of a back test of the previous resistance at 6360ish I think we might get a dip from this area before another leg up. As mentioned above there is a chance that we rise to the top of the Bianca channel at the 6460 area today/tomorrow and at the moment the 30min and 2 hour charts have bullish moving averages. We have the daily pivot at 6367 with the weekly just below that at 6361, which is why I think that we might well get some support there if that areas tested. Also, the 2 hour chart is showing 6357 as support with the Hull moving averages. It will be interesting initially to see if the bulls do go for a push up to test the 6420 area – if they break that then we may well see the higher levels this morning. The S&P is certainly trying hard to hold above 2100 also, and the US bears have not had much success dropping the Dow from the 17750 area (so far at least).