Support 6685, 6651, 6641, 6630, 6600 Resistance 6698, 6730, 6745, 6795, 6815

Good morning. Well that was a bit of a damp squib yesterday with not a lot of movement. The bulls failed to pull away from the 6699 area with any conviction, setting a high of the day around 6715 then we spent most of the time faffing about around 6700. As with yesterday, they need to break 6730 to push upwards towards 6800, whilst 6685 and then 6640 are the supports. The Fed minutes released last night showed that some members are concerned about low inflation, once again bring deflation fears to the fore, though it does delay rate hikes for a while longer.

Asia Overnight from Bloomberg
Asian stocks fell a second day after Federal Reserve minutes showed some U.S. policy makers were concerned about low inflation. Shares in Japan gained as the yen weakened past 118 per dollar.

The MSCI Asia Pacific Index (MXAP) lost 0.1 percent to 139.54 as of 9:04 a.m. in Tokyo after dropping 0.7 percent yesterday. Many Fed officials saw a need to remain attentive to signs of a drop in inflation expectations, according to minutes of the Fed’s October review released yesterday. Data showed Japan’s trade deficit narrowed after exports gained 9.6 percent last month from the previous year, the biggest gain in eight months. The yen slid 0.2 percent to 118.15 per dollar, trading near its lowest since August 2007.

“The Fed surprised everybody with the hint that they were watching deflation,” Kirk Hartman, president and chief investment officer of Wells Capital Management in Los Angeles, said on Bloomberg Television. “To me, the Fed is still steady as she goes and I think next week the story will be that there are no imminent rate hikes until late 2015.”

South Korea’s Kospi index slid 0.3 percent. Australia’s S&P/ASX 200 Index sank 0.5 percent. New Zealand’s NZX 50 Index added 0.1 percent. Markets in China and Hong Kong have yet to open. Preliminary data today is expected to show China factory activity slowed from last month.

Hong Kong’s Hang Seng Index is heading for its biggest weekly decline since March as buy orders for Shanghai shares through the Hong Kong exchange link slowed to a trickle after the program’s debut this week. International investors bought a net 2.6 billion yuan ($424.7 million) of Shanghai shares out of the 13 billion yuan daily limit under the link yesterday, while mainland investors used about 2.4 percent of their 10 billion yuan quota for Hong Kong stocks.

Japan Advances
Japan’s Topix index climbed 0.6 percent. Prime Minister Shinzo Abe this week postponed a planned sales-tax increase, called a snap election and ordered his ministers to start preparing a stimulus package. The BOJ announced after its monthly policy meeting yesterday that it would keep its stimulus program unchanged after a surprise boost last month.

“The weaker yen is supporting Japanese exports,” Tim Schroeders, a portfolio manager who helps oversee $1 billion in equities at Pengana Capital Ltd. in Melbourne, said by phone today. “Japan still needs structural economic reforms to put it on a better footing. A fresh mandate for Abe could potentially give him a better chance at pushing forward these reforms.”

US Futures
Futures on the Standard & Poor’s 500 Index were little changed. The U.S equity benchmark index slipped 0.2 percent yesterday, retreating from an all-time high, as the Fed minutes sparked concern about the timing of U.S. rate increases.

FTSE Outlook

Unfortunately Google haven’t updated their historical FTSE prices again so the Bianca channels can’t be updated, which is a bit annoying, as it was just getting interesting and looked like me might be approaching some support on them. Will have to use the Raffs as plan B! So onto today. 6685 looks fairly key and the bulls need to defend this area with a rise to 6730. This is still the resistance level and a break above this will likely enable the the top of the 10 dat Raff at 6793, with a pause at 6742 fib resistance. I have plotted this with the arrows, as I think that it may well hold, at least for today.

That said I am ready to start shorting as if 6685 breaks then a fall to 6641 looks possible, with 6625 below that, being the bottom of the 20 day Raff. If it went lower then the round number 6600 would offer support, though I expect if it gets bearish today and fails to break 6730 then we have seen the high for the moment and are heading lower over the rest of November. So, key levels for today – 6685 and 6730. I think we will get a pop higher today then some downside – above 6730 we have 6745 resistance so will try a short there.