Support 6820, 6805, 6775, 6762, 6757 Resistance 6845, 6858, 6875, 6895

Good morning. I hope you had a good weekend. Friday’s jobs news out of the US was positive, boosting hopes, initially at least, for the US to power on up. Then the thought of increased interest rates put paid to the bulls early hopes! My hunch for that rise and then the dip panned out, though the automated short just got stopped out about 3 points off the high. Annoying! I saw in the chat room that some caught the move but as I was traveling on Friday I stayed out for most of it. Gold certainly took a tumble from that 1265 resistance area too.

Asia Overnight from Bloomberg
(Bloomberg) — American equity-index futures slipped with Australia’s dollar, stocks and government bonds after Chinese imports plunged and U.S. payrolls data fueled speculation over the outlook for higher interest rates. Oil extended gains following the best two weeks for Brent crude in 17 years.

Standard & Poor’s 500 Index futures fell 0.3 percent by 8:26 a.m. in Tokyo, as the S&P/ASX 200 Index dropped 0.2 percent in Sydney. The Aussie lost 0.3 percent as yields on 10-year debt jumped 11 basis points, pacing Friday’s increase in Treasury rates. New Zealand stocks also fell with both countries counting China as their biggest trading partner. Copper futures declined 0.2 percent, while Brent and West Texas Intermediate oil rose a third day, adding at least 1.4 percent.

Imports to China slumped the most in more than five years in January, while exports unexpectedly fell, swelling the trade surplus to a record and highlighting the weakness in domestic demand for Asia’s No. 1 economy. U.S. payrolls capped the biggest three-month gain in 17 years, a report Friday showed. Greek Prime Minister Alexis Tsipras reaffirmed his rejection of the country’s bailout program, while Ukraine peace talks are set to resume this week amid escalating violence there.

“The data supports the view that labor-market conditions are converging towards the Fed’s full-employment mandate and on its current trajectory will encourage the Fed to start rate hikes from mid-2015,” Mark Smith, a senior economist in Auckland at ANZ Bank New Zealand Ltd., wrote in an e-mail to clients, referring to the U.S. Federal Reserve. “The global scene is evolving quickly,” with the China trade data signaling slowdown concerns “are not confined to Europe,” he said.

Payrolls, China
Payrolls in the U.S. swelled by 257,000 workers last month, following a 329,000 gain in December that was bigger than previously reported. The median forecast in a Bloomberg survey of economists called for a 228,000 increase in January. The unemployment rate climbed to 5.7 percent.

Shipments from China slipped 3.3 percent in January, after rising 9.7 percent in December, data from the customs administration in Beijing showed Sunday. Economists had projected a 5.9 percent increase. China cut the reserve ratio for banks last week and reduced interest rates in January as it seeks to stoke growth and head off a domestic downturn. [Ref]

FTSE Outlook

We have some interesting Bianca channel levels to watch out for today, namely the top of the 10 day at 6895, and the bottom around 6757 – if the bears break below 6820 then we might well dip this low, though there is some support at 6805 and 6775. I’d be inclined to hang fire on these levels though and wait to see if it bounces and gains some traction before going long – or wait till the 6760 area as we have the 2 Bianca supports there. Below this the bottom of the 10 day Raff is 6750 and the 25ea at 6740. So for a swing spot level (as the daily channels are) the stops only need to be just below 6740.

The daily pivot is at 6858 so we have initial resistance there, with 6875 above that. If we do break through the pivot then I think that the Friday dip is likely to be quickly undone with the usual buy the dip that we have seen, and then a rise to 6900 is more than likely.

So, I think 6820 will hold first thing, a rise to short at 685 and a fall to the bottom of the daily channels around 6760, for a decent long spot.