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Good morning. Well that wasn’t very bearish at the resistance levels yesterday, and has added a fair few overnight with the BoJ news that they are maintaining monetary stimulus/policy for the time being. Got that Friday feeling already today! We have just nudged above the Raff channels overnight, though the daily chart does have 200ema resistance at 6630 if it got that high. Its certainly been pushed higher and I think next week will be relatively flat as most traders will be on holiday after today. The algos have had their fun this week, hence the volatility, so we may see some profits being banked towards the end of the day, maybe around the 6588 level, if its not chased higher early this morning.

Asia Overnight from Bloomberg
U.S. equity-index futures rose with Asian stocks (MXAP), extending a global surge in shares as the regional index headed for its steepest two-day advance in 13 months. Crude oil pared a fourth weekly decline, the euro traded near a two-year low and wheat fell.

Futures on the Standard & Poor’s 500 Index advanced 0.5 percent by 3:07 p.m. in Tokyo after the gauge capped its best two-day advance since 2011 in New York. The MSCI Asia Pacific Index jumped 1.8 percent after a 0.7 percent gain yesterday. Japan’s Topix index climbed 2.4 percent as the yen traded at a one-week low. Oil in the U.S. rose 1.4 percent after sliding 6.4 percent in the first four days of the week. The euro bought $1.2286 and wheat dropped 1.6 percent.

The Bank of Japan held monetary policy steady today, almost two months after unexpectedly boosting stimulus amid a recession in Asia’s second-largest economy. The MSCI All-Country World Index is headed for its steepest weekly advance since the end of October after the Federal Reserve pledged patience on raising U.S. interest rates and as Switzerland’s central bank introduced negative deposit rates. Russian President Vladimir Putin said the country can withstand an economic downturn as plunging oil prices undermine the ruble.

“We’re seeing a relief rally,” said Koichi Kurose, who oversees about 6 trillion yen ($50 billion) as Tokyo-based chief market strategist at Resona Bank Ltd. “The Fed saying they won’t move toward tightening soon, and Putin saying Russia won’t end up in financial turmoil has helped to alleviate fears. While we’re still concerned as to how low oil prices can go, for now it has rebounded, which is good for risk sentiment.”

Patience Pledge
Fed Chair Janet Yellen said this week that policy makers are likely to hold key rates near zero at least through the first quarter, even as the U.S. economy strengthens. The central bank, in a statement after its last meeting of 2014, replaced a reference to borrowing costs staying low for a “considerable time” with a pledge to be patient on the timing for higher rates.

All 10 industry groups advanced on the Asia-Pacific stock gauge, which is close to erasing a weekly decline. The S&P/ASX 200 Index climbed 2.5 percent in Sydney, headed for its biggest one-day gain since July 2013 as banks rallied. New Zealand’s NZX 50 Index (NZSE50FG) rose 0.2 percent. The Kospi index in Seoul added 1.6 percent, rising for the first day this week.

Hong Kong’s Hang Seng Index climbed 1.4 percent and a gauge of Chinese shares in the city advanced 0.8 percent. BYD Co., a Chinese carmaker partially owned by Warren Buffett, surged 19 percent after a record drop yesterday. The company said it confirmed with shareholder Berkshire Hathaway Inc. that it has no present intention to reduce its stake.

Fed Rally
U.S. investors celebrated a reprieve from energy angst and Russia with the biggest post-Federal Reserve rally in three years. The S&P 500 surged 4.5 percent in the last two days, erasing four-fifths of the seven-day decline that began Dec. 5 and wiped out about $1 trillion of equity value. The gauge pulled within 1 percent of its all-time high as Apple Inc., Berkshire Hathaway and Johnson & Johnson led the advance.

After two weeks in which traders grew obsessed with headlines about OPEC and Russia’s central bank, the rally was ignited by a more familiar institution: Janet Yellen’s Federal Reserve. More than 500 points has been added to the Dow Jones Industrial Average in the nearly nine hoursU.S. exchanges have operated since she pledged patience in raising interest rates.

Should it continue, the recovery would mark the fifth time this year that the S&P 500 has come back after falling more than 4 percent from a high. In comparable drops beginning in January, April, July and September, the index needed about a month to erase losses, data compiled by Bloomberg show.

Oil Pares
Gold was little changed at $1,199.40 an ounce on the spot market after climbing 0.7 percent yesterday. The precious metal is down 2 percent this week.

West Texas Intermediate oil climbed to $54.84 a barrel after sinking to the lowest settlement level since May 2009 yesterday. WTI is still down 44 percent this year. Brent crude added 0.6 percent to $59.62 a barrel in London.

The yen slumped more than 2 percent versus the greenback through the previous two days, as the Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, touched its highest level since March 2009 yesterday. Japan’s currency was down 0.4 percent at 119.35 per dollar after reaching its weakest level since Dec. 11 last session.

China’s yuan dropped to within 0.3 percent of the weak end of its daily trading band. The currency fell 0.1 percent to 6.2228, extending this week’s loss to 0.6 percent, China Foreign Exchange Trade System prices show.

It earlier retreated to 6.2316, a record 1.78 percent weaker than the reference rate, which the People’s Bank of China today lowered 0.02 percent to 6.1205. The yuan, which can diverge 2 percent on either side of the fixing, has dropped 1.6 percent in the past four weeks.

Indonesia’s rupiah climbed 0.1 percent to 12,548 per dollar. The currency, which earlier this week closed at its lowest level since the 1998 Asian financial crisis, is up for a fourth day, the longest winning streak since July.

The euro was about 0.2 percent from the lowest in more than two years against the dollar amid speculation the European Central Bank will expand stimulus measures as the Federal Reserve moves toward raising interest rates.

Switzerland’s franc was little changed at 1.20453 per euro and 98.05 U.S. cents after sinking the most in about 18 months yesterday as the nation imposed its first negative deposit rate since the 1970s to stem the tide of money flowing from Russia’s financial crisis.

Ruble, Putin
The ruble weakened 2.1 percent against the dollar last session, after surging 11 percent the day before, as Russian President Vladimir Putin struck an uncompromising stance over the nation’s financial woes. The currency reached a record-low 80.10 per dollar this week. One-month forwards on the ruble climbed 1.1 percent to 63.0944 today.

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

We have broken above the daily channels in a fairly bullish move so I am expecting a dip back to test to the top of that 20 day Bianca at 6516, which also tallies with the 34sma on the 10min chart, and would make a good entry for a long for a push higher. Having broken above 6525 we could quite easily push on to resistance at 6588 next, which is also the top of that 10 minute channel and R1 Weekly. If we see some profit taking there going into the weekend and holiday period then we could drop down to the pivot at 6464 (IG pivot that one). Live charts pivot is lower (as doesn’t take account of the out of hours rise) at 6423. If it all goes pear shaped for the bulls today then support is at 6410 and a break below that will likely see a drop to 6350. However, the bulls are in control at the moment, and that 10minute channel you can see in the chart below looks like a safe bet to play off today.

Good morning. It was shame that the morning session only reached a high of 6312 and missed the 6320 level at that time, as it dropped back down from there, before rising to the 6320 in the afternoon. Not ideal on a Fed day during the US session, and of course that short failed. Bullish reaction to the Fed in the evening saw a rise to 6400 (pretty close to the 6420 resistance in the end as the high 6410 in the early hours). If that 6150 on Tuesday is the low then that is 2 years running the Santa Rally has started on the 16th December. The slight spanner in the works is that this rise being quite quick has pushed above the 10 day daily channels – both Raff and Bianca, so a dip back to get within them is possible today/tomorrow. That said, the 25ema on daily is 6503 so we may still see that level first. Dax is nearly testing its 25ema on daily at 9673. The 25ema is often resistance.

Asia Overnight from Bloomberg
Asian stocks climbed, with the regional benchmark index rebounding from an almost nine-month low, after a Federal Reserve pledge to be patient on interest-rate increases sent U.S. equities up the most since 2013. Precious metals advanced and oil swung between gains and losses.

The MSCI Asia Pacific Index advanced 0.8 percent by 2:06 p.m. in Tokyo, as Hong Kong’s Hang Seng Index (HSI) climbed from its lowest since May and Japan’s Topix index headed for its biggest gain in a month. Standard & Poor’s 500 Index futures slipped 0.1 percent after the U.S. gauge jumped 2 percent, erasing about half of its December drop. Crude oil traded at $56.41 a barrel in New York. South Korea’s won fell 0.7 percent versus the dollar and China’s yuan was at the weakest since July. Gold climbed 0.6 percent.

The Fed said it will be patient when it comes to the timing of rate increases, replacing a pledge to keep borrowing costs near zero for a “considerable time,” and raising its assessment of the job market. While falling unemployment is pushing the U.S. toward higher borrowing costs, plunging oil prices are holding inflation below target. Russian President Vladimir Putin holds a media conference amid the ruble’s slump.

“Asian markets will be comforted by the rise in the U.S.,” Angus Gluskie, managing director at White Funds Management in Sydney where he oversees about $550 million, said by phone. “But it doesn’t really alter the fundamentals, which are growth in the U.S. is good and the sharp drop in the oil price and Russian currency are still likely to destabilize markets.”

Sony Gains
The MSCI Asia Pacific Index closed at the lowest since March 31 yesterday, having lost 5 percent since the end of November. BHP Billiton Ltd. (BHP), the world’s biggest miner and Australia’s No. 1 oil producer, was the biggest drag on the measure through that period as plunging crude prices dragged a Bloomberg gauge of global commodities to five-year low on Dec. 16. BHP added 1.9 percent today.

The Topix rebounded 2 percent from its lowest level since Oct. 31 and the Nikkei 225 Stock Average rallied 2.2 percent.

Sony Corp. climbed 4.3 percent in Japan after its movie production unit, Sony Pictures, canceled plans to release “The Interview” on Dec. 25 amid pressure from cyberterrorists who broke into the company’s computers and threatened violence against filmgoers. The movie is about a plot to assassinate North Korean leader Kim Jong Un.

Australia’s S&P/ASX 200 Index increased 1 percent, while the NZX 50 Index (NZSE50FG)added 0.4 percent in Wellington. South Korea’s Kospi index slid 0.8 percent.

The Hang Seng Index, which entered a correction this week having fallen more than 10 percent from a recent high, added 1.2 percent today. A gauge of Chinese stocks in the city climbed 1 percent as property prices fell in 67 of 70 Chinese cities in November, improving from 69 in October.

China Rates
The Shanghai Composite Index retreated 0.3 percent today, slipping from a four-year closing high, as the biggest new share sales of the year sapped funds from the market and drove China’s benchmark money-market rate to the highest level in almost nine months.

The seven-day repurchase rate, a gauge of interbank funding availability in the banking system, climbed 99 basis points to 4.88 percent as of 11:21 a.m. in Shanghai, according to a weighted average compiled by the National Interbank Funding Center. That’s the biggest jump since January. The similar-term borrowing rate on the Shanghai Stock Exchange jumped 260 basis points to 12.85 percent.

U.S. Rally
Yesterday the S&P 500 made up about 40 percent of the ground it lost since touching a record 2,075.37 on Dec. 5. The index jumped back above 2,000 and its 50-day moving average of 2,002.89, levels that when breached Dec. 15 led to amplified selling. Yesterday’s gain — it closed at 2,012.89 — boosted the gauge’s 2014 return to 8.9 percent. The S&P 500 was down almost 5 percent in December as of Dec. 16.

The Dow Jones Industrial Average increased 1.7 percent, while the Russell 2000 Index (RTY) of small-cap shares jumped 3.1 percent, the most since Dec. 20, 2011.

The U.S. consumer-price index dropped 0.3 percent in November from the previous month, the most since December 2008, after being little changed the prior month, a Labor Department report showed yesterday. The retreat was led by a plunge in fuel costs, with WTI oil down 42 percent this year amid concern over waning demand and a global glut in the commodity.

Persistently low inflation allows Fed policy makers to take a wait-and-see approach to raising key borrowing costs, while plunging fuel costs free up money for households to spend on other goods and services, firming the economic expansion. Yields on 10-year Treasury notes were little changed at 2.14 percent after rising eight basis points in New York.

Won, Yuan
South Korea’s won slipped for a second day, sinking to 1,104.50 per dollar as the yen climbed 0.2 percent to 118.46 per dollar. The greenback surged as much as 2.1 percent versus Japan’s currency last session as the Bloomberg Dollar Spot Index jumped 0.9 percent, the most since October.

China’s yuan weakened 0.25 percent to 6.2129 per dollar as of 12:56 p.m. in Shanghai, according to China Foreign Exchange Trade System prices, the weakest level since July 3. The People’s Bank of China cut the yuan’s reference rate for the yuan by 0.09 percent, the most since Nov. 6, to 6.1195 per dollar. The central bank has raised the fixing 0.24 percent this month even as the greenback gained.

Gold bullion for immediate delivery advanced to $1,197.81, according to Bloomberg generic pricing. The metal fell yesterday to $1,183.89, the lowest since Dec. 1. Silver gained 1.6 percent and platinum added 1 percent.

Rupiah, Oil
The Indonesian rupiah climbed 0.8 percent, the most since Oct. 29, to 12,560 per dollar. India’s rupee added 0.6 percent to 63.2725, set to snap a three-day losing streak.

West Texas Intermediate for January delivery was little changed in electronic trading on the New York Mercantile Exchange. The U.S. benchmark contract, which expires tomorrow, climbed 54 cents to $56.47 yesterday. The more-active February future climbed 14 cents to $56.93 today. Prices have decreased 43 percent this year, set for the biggest annual slide since 2008.

Brent for February settlement was 17 cents higher at $61.35 a barrel on the London-based ICE Futures Europe exchange. It increased 2 percent yesterday.

Forward contracts on Russia’s ruble slipped 0.3 percent, paring losses of as much as 6.7 percent. The currency finished trading yesterday at 60.2205 per dollar in Moscow, 11 percent higher after the country’s finance ministry said it was selling foreign exchange. Only Ukraine’s hryvnia has fallen more than the ruble’s 45 percent plunge against the U.S. dollar this year.

FTSE Outlook

FTSE 100 Prediction

FTSE 100 Prediction

It would appear that Santa has arrived for the moment, though it won’t just be a straight line up till the end of the month. Resistance is still at 6420, with 6503 and 6538 above this. However, whilst we now have a fairly decent rising PRT channel on the 30minute chart, there is a declining one with resistance at 6412 – tallying with the out of hours high as well. As such I wouldn’t be surprised if we get a dip from there down to the pivot level at 6312, before more bull. As mentioned above, I do think that we will be testing the 25ema on the daily soon, 6503 for today, however, the top the 20 day Raff is 6488 so resistance there. Might be a good plan to add a half stakes short at 6488, then another half at 6503 to fade in and ride a possible swing short from there. We have quite wide levels currently, but support is 6312 where we have the daily pivot, with 6305 below this. A break of that would probably see 6250, so can be worth a run down if the support breaks. I think that 6305 area will hold though.

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