Support 6842, 6817, 6774, 6750 Resistance 6870, 6900, 6935, 6970, 7002

Good morning. Well that dipped a bit lower than expected yesterday, finding support at 6777 where we had the bottom of the 10 day Bianca channel. And its held rather well, with a good overnight rise fuelled by Apple beating estimates with their results. I did see it worked out that they sold a million iPhones everyday! Yahoo, also did well, and their shares were up several % on their results (and spinning out the Alibaba holding to a separate company). I said that yesterday was a buy the dips day, looks to be the case, just dipped a bit lower! Support today is at 6842 (bottom of the 10 day Bianca if tested again) then 6817 (Daily pivot).

Asia Overnight from Bloomberg
(Bloomberg) — Asian stocks fell, with the regional benchmark index retreating from a four-month high, as Japanese shares slid on a stronger yen and U.S. earnings and durable-goods orders disappointed investors.

The MSCI Asia Pacific Index declined 0.4 percent to 141.81 as of 9:00 a.m. in Tokyo after climbing yesterday to its highest close since Sept. 25. Japan’s Topix index slid 0.7 percent. The Standard & Poor’s 500 Index sank 1.3 percent yesterday, while the Nasdaq 100 Index tumbled 2.6 percent for the biggest drop since April as results for companies from Caterpillar Inc. to Microsoft Corp. missed estimates and orders for business equipment unexpectedly fell for a fourth month in December.

“We may see some fairly substantial earnings downgrades in the U.S.,” Tim Schroeders, a portfolio manager who helps oversee $1 billion in equities at Pengana Capital Ltd. in Melbourne, said by phone. “That’s going to put a dampener on the U.S. market and spread globally. If weaker earnings does become a trend, we’ll be in for more volatility.”

Futures on the S&P 500 gained 0.2 percent today as Apple Inc. and Yahoo! Inc. surged in post-market trading. Apple jumped as iPhone sales topped analysts’ estimates, while Yahoo rose as much as 10 percent after announcing a tax-free spinoff of its stake in Chinese e-retailing giant Alibaba Group Holding Inc.

“Despite some large Dow names releasing some ordinary earnings figures, Apple came out after the market closed and beat estimates,” Scott Schuberg, chief executive officer at Rivkin Securities in Sydney, said by e-mail. “Given Apple’s size, this may well lift U.S. equity futures and, as a result, brighten up an otherwise ordinary lead for Asian investors.”

Japan’s Nikkei 225 Stock Average decreased 0.7 percent as the yen rose 0.1 percent to 117.81 per dollar after gaining 0.5 percent yesterday. South Korea’s Kospi index lost 0.3 percent. New Zealand’s NZX 50 Index advanced 0.2 percent. Australia’s S&P/ASX 200 Index slipped 0.1 percent. Markets in Hong Kong and China have yet to open.

The Shanghai Composite Index dropped 0.9 percent yesterday after five days of gains. Chinese industrial companies’ profits declined the most in at least three years last month, underscoring the challenge facing the nation’s former growth drivers as the economy slows and commodity prices slump. [Ref]

FTSE Outlook

We have had a good overnight rise off the back of Apple and Yahoo, however as I write this we are just hitting some resistance at 6870. As such we may get a little dip of this to partly close the gap and also to test the bottom of the 10 day Bianca at 6842. We also have the IG pivot at 6833.5 so a couple of supports in this area. Slightly lower down is the live chart pivot at 6817. If this were to break then i think we will resist yesterdays low at 6780 area, with 6750 below that. However, I am fairly happy to say that I think the 6832/42 area will hold as support and we will get a rise to test 6900. Above this we have that 6935 area which I expect to be solid resistance – once that breaks (if it does) then we should be on for 7000. Both Bianca channel tops are around there and if we were to test that this week, then thats a full crossing of the 10 day Bianca 10 day in under a week (having hit the channel low 6777 yesterday). For the initial dip to get a bit of momentum the price will need to break the 34sma on the 10min at 6866 currently.