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Good morning. A slightly annoying session yesterday that followed the arrows but went a bit lower and a bit higher than the levels i was entering at. Typical. A confirmed case of Ebola in New York overnight, and a big miss on Amazon results after the bell saw the FTSE drop off from he 6430 level it hit around 7pm, to drop and test a fairly decent support level overnight at 6370. As I am writing the bulls are trying to get it back above 6400. Resistance today is that 6430 level initially. Tesco’s woes continue with the black hole having an extra 23million added to it. Going to take a while to turn that ship around now.

Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index extending its first weekly gain in seven weeks, after U.S. earnings beat estimates and data signaled stronger European growth.

The MSCI Asia Pacific Index (MXAP) advanced 0.5 percent to 137.72 as of 9:01 a.m. in Tokyo. The measure is heading for a 3 percent weekly advance after entering a correction last week.

“We are getting good earnings data out of the U.S.,” said Tim Schroeders, a portfolio manager who helps oversee $1 billion in equities at Pengana Capital Ltd. in Melbourne. “The market seems to be moving from one data point to the next data point without conviction and there’s a lot of volatility.”

Japan’s Topix (TPX) index rose 1.3 percent, set for the steepest weekly gain since April 2013, after the yen slumped 1 percent yesterday against the dollar. South Korea’s Kospi index and Australia’s S&P/ASX 200 Index added 0.6 percent, while New Zealand’s NZX 50 Index advanced 0.9 percent. Markets in China and Hong Kong are yet to open.

Futures on the Standard & Poor’s 500 Index were little changed today. The measure rose 1.2 percent yesterday after results from Caterpillar Inc. to 3M Co. exceeded analysts’ estimates.

Caterpillar, the largest construction equipment maker, added 5 percent after raising its full-year earnings forecast amid higher sales of construction machinery in North America. 3M climbed 4.4 percent as the maker of Post-it notes boosted sales in all of its businesses.

Europe Growth
Economic data yesterday suggested the euro-area economy may have moved one step away from another recession. A Purchasing Managers’ Index showed manufacturing in the region unexpectedly grew this month, and Spain’s third-quarter unemployment dropped to the lowest level since 2011. In Germany, factories rebounded from a slump in September.

Fewer Americans filed applications for unemployment benefits over the past month than at any time in 14 years as an improving economy prompted employers to hold on to staff, another report showed.

Futures on Hong Kong’s Hang Seng Index and the Hang Seng China Enterprises Index both added 0.3 percent in their most recent trading session. The Bloomberg China-US Index of Chinese stocks traded in the U.S. climbed 0.5 percent yesterday. [From here]

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

Todays pivot is 6388 so there is initial support here, especially as the lower support at 6370 has held overnight. The key level for the bulls to break is 6430 – yesterday out of hours high and 6437 were we have the 25ema on the daily today. I have gone off the 10min chart for todays arrows, as there is also PRT resistance at 6425 with 2 channels there, so as such a short there with a stop just above the 25ema could be fruitful. I might well add at 6436. If the bulls manage to exceed this level then the top of the 10 day Bianca channel is 6506, and the 20 day Raff at 6520. I have gone with 6370 holding as support for todays session and actually bouncing off the pivot area instead (maybe go in at 6388 and 6370 at half stakes on each and see if the bounce area holds). If the 6430 area is tested a 3rd time then I expect it to break. If 6370 does break then the lower supports are 6357 and 6330. The bottom of the 10 day Bianca is 6217 – so if it got really bearish….. Remember its Friday so expect a little bit of weirdness as per usual!

Support so entry levels for a possible long

  • 6387 daily pivot
  • 6370
  • 6357
  • 6330
  • 6217

Resistance so entry levels for a possible short

  • 6424
  • 6430
  • 6437
  • 6506

Good morning. Turned out the bounce from the bottom of the channel area on the 30minute at 6340 saw a bit of bull, though they were undone at the end of the day as the US sold off. Still, a lot of fear out there with the jitters and a move below 6336 (200ema area on 30min) suggests that the bears are not finished yet and we are heading back down. I think we may get an initial bounce today to the top of the 20 day Bianca at 6380 before more downside. I was really hoping that yesterdays rise was going to reach the daily 25ema for a perfect short entry but alas not! Lloyds cutting 9000 job was announced yesterday, though didn’t have too much effect.

Asia Overnight from Bloomberg
Asian stocks pared declines and the yen weakened after the Bank of Japan auctioned debt at a negative yield for the first time. Oil traded near $80 a barrel while New Zealand’s dollar weakened.

The MSCI Asia Pacific Index lost 0.2 percent by 1:02 p.m. in Tokyo, trimming a drop of 0.5 percent after the highest close since Oct. 9 yesterday. Japanese shares fluctuated and the yen fell 0.2 percent as an auction of three-month bills drew an average yield of negative 0.0037 percent. Standard & Poor’s 500 Index futures added 0.1 percent after the U.S. gauge dropped. Oil in New York retreated to as low as $80.05 after the December contract tumbled 2.4 percent yesterday. The kiwi slid 1 percent as the greenback held gains versus major peers.

A preliminary gauge of Chinese manufacturing unexpectedly climbed before similar reports from Europeto the U.S. today. Global assets markets have been seesawing as investors assess the impact of reductions in U.S. stimulus amid a deteriorating global outlook. U.S. oil inventories rose more estimated last week, stoking concern that supply is outpacing demand.

“The reason volatility is rising is because people are nervous about the state of the world economy,” Elmer Funke Kupper, chief executive officer of Australian bourse operator ASX Ltd. said in a Bloomberg TV interview in Hong Kong. “I’m quite concerned about it. Risk has been underpriced in a number of markets for some time now.”

China PMI
The Asia-Pacific gauge swung an average 0.9 percent a day this month, up from 0.5 percent in the first nine months of 2014. The measure fell 2.4 percent this year through yesterday. The MSCI All-Country World Index dropped 0.1 percent in early trading, after losing 0.2 percent last session.

“People are more concerned about a slowdown in Europe, outweighing today’s better-than-expected Chinese data,” said Kazuhiko Saito, an analyst at Fujitomi Co., a commodities broker in Tokyo. “Investors will watch the European data today to see if it falls below 50.”

Hong Kong’s Hang Seng Index slipped 0.3 percent and a gauge of Chinese shares in the city swung between gains and losses. The Shanghai Composite Index dropped 0.9 percent.

The HSBC Holdings Plc/ Markit Economics purchasing managers index for Chinese manufacturing climbed to 50.4, beating estimates for it to hold at 50.2 in October, according to economists surveyed by Bloomberg. The country this week posted faster-than-projected economic growth for the third quarter, as investors await the outcome of Communist Party policy-setting meetings in Beijing.

Oil Rout
West Texas Intermediate crude is trading near a two-year low of $79.78 struck on Oct. 16. Crude stockpiles climbed 7.1 million barrels in the week ended Oct. 17, the Energy Information Administration said yesterday. They were forecast to increase by 3 million, according to a Bloomberg survey.

Brent slid 0.2 percent to $84.58 after plunging 1.8 percent yesterday. Oil is extending its collapse into a bear market as producers including Saudi Arabia cut prices to stimulate demand amid the highest U.S. production in almost 30 years. The Organization of Petroleum Exporting Countries needs to reduce crude output by at least 500,000 barrels a day, Samir Kamal, Libya’s OPEC governor, said by e-mail yesterday.

New Zealand’s dollar fell to 78.52 U.S. cents, set for the biggest decline in three weeks, after a report showed the consumer price index fell to the bottom of the central bank’s target range, prompting speculation policy makers will delay interest-rate increases.

Wheat futures fell for the first time in three days, slipping 0.3 percent to $5.2075 a bushel, while soybeans for November delivery declined 0.2 percent in a second day of losses, to $9.61 per bushel. [From here]

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

Support today is 6336 initially, and if the bears can break through this then 6320 and 6285 are the next supports. The US ended a bit bearishly yesterday with the S&P dropping off from the 1950 area to 1932 this morning. 6381 is todays pivot and also the top of the 20 day Bianca channel (6378). With resistance there and also at 6390, the bulls will need to break through that to target yesterday’s high at 6408, and then 6427. The 25ea on daily is 6436, and the 10 day Bianca at 6454, so there are a few longer term resistance levels coming up too, if the bulls do try to rise today. The main levels to watch really are at 6336 and 6381, long at one, short at the other and see how it goes.

Support so entry levels for a possible long

  • 6336
  • 6320
  • 6285
  • 6155

Resistance so entry levels for a possible short

  • 6381 daily pivot
  • 6390
  • 6408
  • 6425
  • 6436
  • 6560

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