Pivot resistance 6837, support 6810, which will break? | FTSE Day …
Good morning. Are you an optimist or a pessimist? It feels like the FTSE is in a bit of limbo currently and if you are an optimist then it will be pausing before further rises, 6810 will hold and all is good.
If a pessimist then failure to break 6860 shows weakening bulls and this limbo land is the start of the declines. Personally, while 6810 holds I am optimistic, but ready to jump off that ship if it does break. Overnight we had weaker than expected Chinese flash PMI, hence the drop at 1:30am from 6850 to 6810 (which one again held just) to bounce back to 6825.
Not very inspiring though. Once again we are testing the bottom of the 10 day Bianca channel at 6826. Tuesday s pivot level was better for a bounce!
Good results from Netflix after the bell last night saw the S&P reach 1850 again; Netflix said it added four million new users in the last three months of 2013 to give it 44 million international viewers.
It also reported a jump in net profits to $ 48m ( 29m) in the fourth quarter from $ 8m for the same period a year ago.
Asia Overnight from Bloomberg
Asian stocks fell, with the regional benchmark index heading for its first drop in three days, after a gauge of China s manufacturing unexpectedly contracted.
The MSCI Asia Pacific Index fell 1.1 percent to 138.46 as of 3:11 p.m. in Tokyo, with all 10 industry groups on the gauge dropping. The measure extended losses as a private gauge of China s manufacturing dropped to a six-month low in January, adding to signs growth in the world s second-largest economy is slowing.
Growth in China isn t going to pick up as the government is focused on rebalancing the economy and reducing reliance on credit, Manpreet Gill, a Singapore-based senior investment strategist at Standard Chartered Bank, said by phone.
While Chinese equities look inexpensive, they lack catalysts. Ongoing reforms in China will be a key challenge for markets this year.
The preliminary reading of 49.6 for a Purchasing Managers Index released today by HSBC Holdings Plc and Markit Economics compares with a final figure of 50.5 in December and a 50.3 median estimate of 19 analysts in a Bloomberg News survey. A number below 50 indicates contraction.
Futures on the Standard & Poor s 500 Index slid 0.3 percent today.
Most U.S. stocks rose yesterday as investors assessed earnings from companies including Norfolk Southern Corp., Coach Inc. and International Business Machines Corp.
The S&P 500 added less than 0.1 percent, with three stocks advancing for every two that declined.
FTSE 100 prediction
Today s pivot is 6837 and the first time for a while that it s above the opening price, its therefore likely to act as resistance and COULD be a signal that the sentiment is changing to bearish. The key level will be 6810 if that breaks then I think the change in stance will look more certain and a close below the 10 day Bianca channel even more so. I have put a couple of shorts in the trade plan below, both of the key resistance levels but as mentioned at the start we are kind of in limbo and this area will either be the point at which it turns lower for a few weeks of declines, or is building a base to push for 6950.
Its hard to say with any certainty at the moment!
Scenario below is the optimistic option, with the 6810 holding, after a dip from the daily pivot.
After yesterday being relatively weak, the bears might feel a bit stronger to short off the pivot.
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