FTSE 100 Support 7014 7010 7006 6988 6958 6938 6920
FTSE 100 Resistance 7038 7047 7098 7132 7151
Good morning. The Dow Jones has come incredibly close to 20000 but hasn’t managed to quite reach it yet. There must be many eyes on it at the moment waiting for that mythical round number to create yet another new high. It stopped just 11 points short so far, back on Tuesday. If there is a last minute continuation of the Santa Rally then we might see it today or tomorrow. Yesterday’s FTSE 100 short at 7056 worked well, nailing the high of the day pretty much though it slowed right down once it had dropped to the 7030 support area. Its held that level overnight as well, despite a decline in Asian equities.
US & Asia Overnight from Bloomberg
Japanese and Hong Kong equities led Asian declines, following a slide in U.S. stocks, while oil prices firmed after falling Wednesday for the first time in a week.
The MSCI Asia-Pacific Index slid after the Dow Jones Industrial Average weakened and failed to reach the much-heralded 20,000 mark amid thinner volumes in the lead up to year-end, although Australian and South Korean equities rose. The Bloomberg Dollar Spot Index remained lower after a 0.1 percent drop Wednesday, with the New Zealand dollar stronger following data that indicated faster-than-expected economic growth and the Swedish krona extended gains. Crude oil held above $52.50 a barrel after a report showing U.S. stockpiles increased drove it down Wednesday.
With volumes thinning and swings in global equities muted, momentum has stalled after the prospect of increased U.S. government spending helped spur stocks to repeated highs over recent weeks. The Treasuries market has steadied following a selloff that took the 10-year yield to the highest since 2014, with the rate holding in a 7 basis point range this week.
“Moderate losses on Wall Street, underpinned by the fall in oil prices, are providing little inspiration for Asian markets today,” said Jingyi Pan, a strategist at IG Asia in Singapore. “Thin volumes are also providing little momentum for trade into the end of the year.”
Stocks
Japan’s Topix and Nikkei indexes slid 0.4 percent at 12:42 p.m. in Tokyo, with both down for a second day.
The CSI 300 Index of Chinese shares fell 0.3 percent, while the Hang Seng dropped 0.9 percent.
Australia’s S&P/ASX 200 index was up 0.3 percent, poised for its fourth-straight gain. New Zealand’s S&P/NZX 50 Index was climbing for a fifth day.
The S&P 500 Index fell 0.3 percent to 2,265.18 Wednesday in New York, while the Dow was off 0.2 percent and closed at 19,941.96.
Currencies
The Bloomberg Dollar Spot Index was little changed after falling 0.1 percent Wednesday, but is still on course for a gain of more than 3 percent this year.
The New Zealand dollar was up 0.1 percent after the country’s gross domestic product report, while the Swedish krona added another 0.3 percent after gaining in Wednesday after the Riksbank extended its quantitative easing program into next year.
The euro climbed 0.1 percent to $1.0443
The yen was little changed at 117.56 per dollar Thursday after appreciating 0.3 percent Wednesday.
Bonds
Treasuries maintained a rally that saw the U.S. 10-year yield fall 2 basis points Wednesday to 2.53 percent.
Japan’s 10-year rate was 1 basis point lower at 0.05 percent.
The equivalent Australian rate was up 1 basis point at 2.83 percent.
German bunds of the same maturity were at 0.25 percent Wednesday.
Commodities
West Texas Intermediate crude oil rose 0.3 percent to $52.65 a barrel Thursday after dropping Wednesday by 1.5 percent, its first slide in a week.
Gold was little changed over the past two days at $1,131.35 an ounce.
[Bloomberg]
FTSE 100 Outlook and Prediction
We might well get a bit more bull for the last 2 days of the trading week before Christmas, with a push up today from the 200ema level on the 30min chart at 7014, even with the currently low volumes. The bulls will need to break yesterdays high if they do, and we also have R1 at 7052 to break as well as the 7047 resistance on the 2hour chart. If they do manage to break this 7050 area then 7098 is a possibility where we have the top of the 10 day Bianca channel. Above this then 7140 is the top of the 10 day Raff. It was a bit of a poor show from the bulls yesterday though so will be interesting to see what it does today.
Support wise, we have the 7014 level mentioned, with 7010/7006 and 6998 below that. If it gets really bearish the daily chart has support at 6925. At the moment to start with the charts are looking bearish with that fairly static day yesterday and overnight. I will try a long at the 7011 area and see what it does, if nothing then probably flip to short. But bear in mind that the bulls will be pretty keen, I feel, to hold above 7000 for the year end.