Good morning. Well that was rather interesting, both levels in the trade plan got hit but what was that drop and rise at the close all about? Stop hunt maybe? It certainly bounced back having dipped to the 6710 area which was the bottom of the Bianca channels. The Divi will be applied today but its only 0.9 points, but just bear it in mind later on. Thanksgiving holiday int he US tomorrow so the markets might well be quite flat, then black Friday to end November. Apart from that sharp dip and bounce at the end yesterday it was another fairly lacklustre display. The bulls failed to break the 6744 level with any conviction (just as well as the short was there!), but did fight back from the lows…. so a mixed bag of sentiment. As mentioned yesterday this week is typically bullish.
Asia Overnight from Bloomberg
Asian stocks rose, with the regional benchmark index heading for a fourth day of gains, as materials and health-care shares advanced, countering a decline in Japan’s Topix (TPX) index amid a stronger yen.
The MSCI Asia Pacific Index (MXAP) added 0.1 percent to 140.90 as of 9:03 a.m. in Tokyo after rising 1.1 percent the past three trading days. Japan’s Topix slid 0.3 percent as the yen gained 0.1 percent to 117.81 per dollar after advancing 0.3 percent yesterday. U.S. stocks slipped from a record as a drop in consumer confidence offset faster economic expansion.
“We’ve got a mixed picture,” said Chris Weston, chief market strategist at IG Markets Ltd. in Melbourne. “We may see the market run out of steam at the moment, but a pullback will be a buying opportunity.”
South Korea’s Kospi index climbed 0.1 percent. Australia’s S&P/ASX 200 Index gained 0.9 percent, while New Zealand’s NZX 50 Index increased 0.3 percent.
Futures on the Standard & Poor’s 500 Index were little changed today. The measure declined 0.1 percent yesterday. Consumer confidence in the U.S. declined to a five-month low in November, to a level that was weaker than the most pessimistic estimate in a Bloomberg survey of economists. Gross domestic product rose at a 3.9 percent annualized rate in the third quarter, up from an initial estimate of 3.5 percent.
West Texas Intermediate crude reached the lowest level in more than four years after nations supplying a third of the world’s oil failed to pledge output cuts before tomorrow’s OPEC meeting.
Futures on Hong Kong’s Hang Seng Index and the Hang Seng China Enterprises Index each lost 0.1 percent in their most recent trading session. [from here]
Its tested the resistance from yesterday at 6752 in the early hours of this morning, and the bulls need to break that to push to the top of the Bianca channels at 6790 and 6817. However, I do have Fib resistance at 6773 first so if they break 6752 then we might well get a stutter there. I am expecting it to be a bit like yesterday and be relatively flat with a slow bullish element, as long as support holds at 6719 and 6714 which is the bottom of the Bianca channels today. If they break and it drops through 6710 then the 200ema on daily is the next support at 6664. As mentioned yesterday I do still think we will get a dip before the rally kicks in, so shorts around 6790/6800 could well pay off over the next few sessions if it were to get that high this week. Todays pivot is 6730, and we have the rising 30min coral line at 6737, so I expect we may see some support around that area, though we are not far above it as I am writing this.
For today I am thinking along similar lines to yesterday with a rise to resistance at 6755ish initially, a dip to the pivot at 6730ish then a further rise. I think he top of the Bianca channels will hold as resistance for the moment, and its worth noting we also have support from the daily Raffs at 6700/6710 today.