Support 6455, 6446, 6400 Resistance 6497, 6516, 6555, 6580, 6620

Good morning. Interesting day yesterday, passed the pivot but didn’t reach the, what looked more significant resistance, 6555 level before dropping 100 points. However, there was good support 6446 after the briefest of touches – was a fast entry! With yesterdays range and the open and close levels being quite close the FTSE is lacking a bit of direction, mostly being supported by the US at the moment, but not helped by oil which dropped below $45 a barrel. However, the daily trends are down on the S&P, but a glimmer of bullishness on the FTSE from the 10 day Raff as that has started to turn up. The 25ema on daily at 6516 is still acting as resistance for the moment, with 6551 above that. Bulls will need to defend 6450 today. News is full of cyber warfare and hacking, as well as the marches for “Je Suis Charlie”.

Retailers
Christmas 2014 was the worst festive period for retailers since the collapse of Lehman Brothers sparked the financial crisis as discounting on the high street and problems with online orders hit sales, according to official figures

Like-for-like retail sales fell by 0.4pc last month, the worst performance in December since 2008 as retailers battled tough trading conditions and the repercussions of offering major discounts on Black Friday in November. [from here]

Asia Overnight from Bloomberg
Asian stocks fell as oil at a 5 1/2 year low weighed on energy companies and a stronger yen and declines in U.S. equities dragged down Japanese shares as the market opened after a holiday.

The MSCI Asia Pacific Index (MXAP)slipped 0.4 percent to 137.32 as of 9:01 a.m. in Tokyo, before markets opened in Hong Kong and China. The yen rose 0.1 percent to 118.26 per dollar, after climbing 0.1 percent yesterday. The Standard & Poor’s 500 Index sank 0.8 percent yesterday after sliding 0.8 percent on Dec. 9.

The decline in crude gathered pace as Goldman Sachs Group Inc. and Societe Generale SA cut price forecasts for the commodity, amid projections a global glut will continue. China trade data today will probably show exports grew 6 percent last month, while imports dropped 6.2 percent, according to the median estimate of economists surveyed by Bloomberg.

“Another plunge in oil prices is likely to further pressure shares,” said Michael McCarthy, Sydney-based chief market strategist at CMC Markets. We expect “support for safe-haven assets. Analysts are expecting a lift in China exports and a fall in imports, a growth-friendly result that may shift market focus.”

Recent Chinese data have been weak, with a report last week showing producer prices in December falling more than forecast. An official manufacturing gauge slid to the lowest level in 18 months last month, while industrial profits slumped by the most in two years in November. Copper traded at a five-year low on prospects consumption of the metal will slow in Asia’s largest economy.

Japan Drops
Japan’s Topix index sank 1.5 percent. The nation’s current-account surplus was 433 billion yen in November, finance ministry data showed, wider than economists’ expectations for 139.5 billion yen.

South Korea’s Kospi index retreated 0.4 percent. Australia’s S&P/ASX 200 Index (AS51) fell 0.7 percent, led by energy and materials firms. New Zealand’s NZX 50 Index added 0.1 percent.

West Texas Intermediate decreased 4.7 percent to $46.07 a barrel yesterday. Crude has to “stay lower for longer” if investment in shale is to be curtailed to re-balance the global market, according to Goldman analysts. [from here]

FTSE Outlook

We have initial resistance at this 6490/6500 area where we have the IG and live charts pivots, so I think we may see an initial dip today. The bulls need to defend yesterdays low at 6446, and are helped by the fact that there is a rising 30 min PRT channel there. As such I have plotted the arrows for that level to hold and a push past the pivots later towards the 6515/20 level. If the bulls break that then 6555 is back in play, then 6580 and 6610. On the downside, if the 6446 level breaks then a trip to 6400 is distinctly possible – so its worth trading the breakouts again, short at 6438 target 6400, long 6525, target 6555.