Support 6396 6394 6382 6378 6231 Resistance 6416 6445 6519 6570

Good morning, I hope you had a good weekend. Some what annoyingly the order to short the FTSE at 6454 on Friday missed by half a point as the high was exactly 6454 (pretty accurate eh!) but given the spread, the highest sell price was 6453.5. Drives you mad sometimes. Anyway, moving on, its dropped off from that level now, hovering around the 6400 since the close on Friday, after a weekend of pretty calm financial news. With China now back from their holidays, and a positive session so far in Asia, we might pop up a little bit higher. However, after 8 straight days of gains, the market is likely to take a breather this week. Recent Fed minutes appeared to be the main driver of Friday’s rise with suggestions that the USA economy could handle an interest rate rise even though they were left on hold last week.

US & Asia Overnight from Bloomberg
Asian stocks rose after posting their steepest weekly advance since December 2011, with technology and industrial shares leading gains.

The MSCI Asia Pacific Excluding Japan Index climbed 0.2 percent to 425.16 as of 9:32 a.m. in Hong Kong, with Tokyo markets closed for a holiday. The measure jumped 6.5 percent last week. The comeback in global equities after their worst quarter in four years is being underpinned by sentiment surrounding central banks, which are showing little desire to pull back on stimulus.

“The only data supporting raising the Fed funds rate has been employment, which has begun to shrink in the last quarter,” Evan Lucas, a markets strategist at IG Ltd. in Melbourne, said in an e-mail to clients. “Coupled with increased talks of the approaching debt-ceiling negotiations, not to mention the 2016 presidential elections, all means we are seeing signs of the liftoff being pushed back, as inflation remains nowhere to be seen.”

South Korea’s Kospi index added 0.1 percent. New Zealand’s S&P/NZX 50 Index climbed 0.7 percent. Hong Kong’s Hang Seng Index rallied 0.5 percent, while China’s Shanghai Composite Index increased 0.3 percent. Australia’s S&P/ASX 200 Index slipped 0.7 percent, with energy shares leading losses after surging last week.

Odds of a Fed liftoff this year have fallen to below 50 percent, with traders predicting a 62 percent chance of an increase by March.

Fischer Comments
Speaking at a meeting of the International Monetary Fund in Peru, Federal Reserve Vice Chairman Stanley Fischer said Sunday that while the U.S. economy may be strong enough to withstand a rate increase by the end of 2015, policy makers are monitoring labor conditions and the situation internationally as they mull when to pull the trigger.

E-mini futures on the Standard & Poor’s 500 Index slipped 0.2 percent. The underlying equity measure added 0.1 percent on Friday to cap its best week of 2015. [Bloomberg]

FTSE Outlook

I have gone for an initial rise, mainly as the 10 minute chart has a slight bullish element and the 6400 level has held well as support since Fridays drop from the 6454 area. That said I am feeling bearish so looking to short at the pivot at 6416 today, with also a possible 6445 short if it got that high for a dip down towards 6350 and possibly 6250 this week. Looking at the Dow there is resistance at the 17150 area, and a dip back to 15000 over the next few weeks before a rise to close the year back at 17000 looks a possible route. if that came to pass that obviously means the FTSE would follow a similar route with a drop from this area before a year end rise. The 2 hour chart has gone bearish and has the resistance at 6445, as well as the top of that ascending 10min channel, and the first of the upper fibs there too. As such I think 6445 represents a decent shorting area (if not already holding from Friday). I am looking to short the rallies today.