The FTSE 100 ended the day in the red as investors saw more gloom than cheer in the torrent of company results, the index closed down 32 at 4,202. Over the next few days, it will be interesting to see if the 4000 level holds. If the support at this level fails, we will be looking at a potential run down to 3740. Rio Tinto is nursing the biggest loss of all FTSE constituents but it is difficult to ascribe all of the fall to the days announcements as many other mining stocks are deeply in the red also. The Dow opened the day yesterday by breaking through support at 7,850, then plummeted over 150 points. It eventually held firmly at the 7,700 mark and rallied over 200 points to the Close at 7932, 1 point away from where it opened. With the Dow Jones Industrial Average down 1.8% at last check, UK indices struggled to improve on morning losses. Better-than-expected retail sales figures in the US provided Wall Street with a reason for a short rally . In Forex news today the Euro zone is expecting the German Preliminary GDP at 07.00 GMT. Then at 14.55 GMT the USD Preliminary Consumer Sentiment is due. Both are forecasting worsening results. Day 1 of the G7 meeting commences today in Rome.
London stocks finished slightly higher on Wednesday. The FTSE, writes Greg, 100 closed at 4,234 climbing 0.5%. Vodafone was the most traded stock, seeing 118 million units change hands, followed by Royal bank of Scotland (RBS) which saw 97.3 million shares switch owners. The Dow opened yesterday with a modest bounce from the lows. It then proceeded to trade sideways within a very tight consolidation pattern. The index eventually closed the day with a gain of 51 points and continues to hold above clear support at 7,850. The Dow is also building a tight consolidation at lows after yesterday’s big decline, formed above major support at 7,850, which has held firmly over the last two weeks. The 7,850 level is key to watch for a break for the next significant move. Otherwise, strength through 8,000 may lead to near-term strength back toward the 8,150 zone. Late session news that key lawmakers agreed on a $790 billion economic stimulus plan sent stocks moderately higher in a partial rebound from a plunge Tuesday that took the Dow Jones industrials down 382 points. Significant Forex news sees US Core Retail month-on-month and retail Sales at 13.30. Both are forecast to be better than previous figures. For those of you trading into the evening please be aware that New Zealand Trade Balance is due to be released at 21:45. Although the NZD is a relatively small currency in this region please be aware of this Trade Balance release.
Footsie lost nearly 100 point yesterday to close below the 50 EMA. The shares took a late dive as US Treasury Secretary Timothy Geithner unveiled a revamped plan to kick-start the economy that could cost as much as $2trn.The Dow opened the day yesterday with a very bearish decline through 8,200 and finally closed down 382 points. The Dow dropped sharply throughout the day and eventually tested support at 7,850, which was the low last week. A test of this line at 7,800 will tell us a lot about a potential bounce or break ahead. The NASDAQ and S&P each broke their respective patterns to the downside yesterday, dropping steadily to the close. We are looking for a potential consolidation to form at lows tomorrow before another directional move occurs. This morning at 09:30 our claimant count change is released. This is the change in the number of people claiming unemployment-related benefits during the previous month. The forecast is an increase from 78,000 to 88,500, and if the actual is less than the forecast then this is good for the currency. Then at 10.30 the Bank of England Inflation Report is published. At 13.30 the Canadian and US Trade Balance are due to be released. Any differences between the actual figure and the forecast may cause fluctuations in the currency.
The FTSE closed up 15 points at 4307, as it continued upwards to break the neckline of the double bottom it formed over the last month. A continuation in this direction with the current short-term buying pressure may cause a test of the 61.8% Fibonacci retracement line at around 4400, and then rally on to the 50% Fibonacci retracement line at around the 4600 mark. In the long term, the primary trend is down and a reversal below this year’s low at 4000, would signal more doom and gloom for the index. The Dow opened the day very sluggishly yesterday traded sideways for most of the session before closing down 9 points at 8270. It broke out of the descending triangle 2 days ago which had be forming for the last few weeks and it continued on the upside and seems to be continuing in that direction heading for another test of 8400. A Breakout above 8400 may go on to test the key level 9000. Today is quite a light day of news releases. At 08:45 the Governor of the Reserve Bank of Australia is due to speak. At 09:30 our Trade Balance is due to be released. The forecast is -£8.1Bn, a slight reduction from last month. If the actual is greater than the forecast then this is good for the Pound. At 14:00 the Governor of the Bank of Canada is due to speak and at 18:00 Ben Bernanke, the Chairman of the US Federal Reserve is due to testify before the Financial Services Committee to testify on the Fed’s efforts to provide liquidity in the current financial crisis. Today is a bank holiday in Japan so please don’t trade the Yen. On Friday 13th we see the start of the latest round of G7 Meetings in Rome, where the Finance Ministers and Central Bankers from the UK, US, Canada, Germany, France, Italy and Japan meet to discuss policy. While the G7 not an institution, it is an influential global policy-making body operating at the highest level, and their initiatives and policies can have a substantial impact on currency markets.
The FTSE closed up 62 points at 4,292 with British Airways being a major success story as the shares closed up 13p at 141p, despite revealing a pre-tax loss of £70m as a 50% increase in fuel costs hit the bottom line.
On Friday the Dow rallied 218 points and broke through the 8,100 level. The index opened Friday with early strength fuelled by an upside break through the five-week upper trend line at 8,100. This break led to steady strength throughout the day and an eventual 218 point gain. The daily chart shows the Dow has bounced from the bottom of the large triangle after testing lows at 7,850. The index is now approaching a major level at 8,400. Watch 8,400 closely, as this level will act as a major line of resistance. On Friday, Wall Street looked past another bleak jobs report and awaited word from Washington about an economic stimulus plan and changes to the government’s financial rescue programme. The advance helped propel the indexes to their first winning week after four straight weeks of losses, and put the Nasdaq composite in positive territory for the year to date. US Treasury Secretary Timothy Geithner delayed the announcement of the Obama administration’s financial-recovery plan as officials debated proposals aimed at addressing the toxic debt clogging banks’ balance sheets.
Forex: Today at 7am, German Trade Balance is expected at 10.0B. 1:15pm CAD high news also with Housing Starts expected at 165K. Japan’s current account surplus plunged 92.1% from a year earlier in December, logging its tenth straight month of declines, the Ministry of Finance said Monday. The surplus in the current account, the broadest measure of Japan’s trade with the rest of the world, stood at Y125.4 billion before seasonal adjustment during December, the data showed.
Strong miners helped the FTSE 100 close yesterday up 64 points at 4228. The index is finding resistance off the 50 ema and would be interesting to take note if it breaks through the 50 ema or bounces off it. The Dow opened the day with early strength and rallied 100 points to the 8,150 level. However, the index stalled just beneath a five-week upper trend line and proceeded to drop 230 points from the day’s highs, ending the day with a loss of 122 points to close finally at 7956. More precisely, we will be watching lows at 7,850 for signs of a major break from the larger triangle pattern. If 7,850 continues to hold, watch out for movement between 7,850 and 8,165, as the index will likely move within this range ahead of a potential breakout move. The S&P500 index fell 6 points or 0.75%, to 832.23, and the Nasdaq composite index showed a moderate retreat, by falling 1.25, or 0.08 percent, to 1,515.05. In the Forex news GBP Halifax HPI, which measures a change in the price of homes financed by HBOS, is forecast to come in lower than the previous figures at -1.7%. At midday we see the release of the GBP Official Bank Rate. Market participants forecast the Bank of England to lower the benchmark interest rate by another 50 bp to 1.00% which would be the lowest level in the Bank’s history. The British pound may face increased selling pressures over the next 24 hours of trading. A Bloomberg News survey shows that 56 of the 61 economists polled expect the central bank to cut borrowing costs to 1.00%. The European Central Bank also decides interest rates (Minimum Bid Rate) at 12.45 today with expectations that the ECB will hold at 2%; the ECB press conference is at 1.30pm. Other currency news: Canadian building permits are announced at 1.30pm today, forecast at -5% from -11.8%; also at 1.30 pm, USD Unemployment Claims are expected to come in at 585K, previously 588K; and Canadian Ivery PMI figures are released at 3pm today.
The FTSE closed up yesterday 86 points at 4,164, amid claims that the British economy will shrink until the fourth quarter of this year as the world endures its slowest growth since the end of World War II. The Dow climbed more than 140 points to close at 8,078, as encouraging news on home sales permitted Wall Street to set aside some of its anxiety. It continues to test support at 7,900, as declining volume indicates that support maybe weakening. The S&P opened at 825 and breaking through near-term resistance levels closing at 838 yesterday, which essentially sparked late-day strength. Look for continued near-term strength above key support levels.
In the Forex markets the AUDUSD posted a modest rise following the recent reduction in official cash interest rates to 3.25% and the Australian government announcement of a A$42 billion stimulus package. Overnight, better than expected AUD Retail Sales figures of 3.8% were announced. Data releases due today are the GBP Services PMI is due at 9.30 GMT with the expectation at 40.3. At 13.15 GMT the USD ADP Non-Farm Employment Change is due for release. This figure is an indicator to the official Non-Farm Payroll which is due for release on Friday. The estimate is for job losses of 528K in the last month. For those of you trading into the evening the New Zealand unemployment figures are due for release at 21.45 GMT which is expecting to a worsening unemployment rate to 4.6%. Good Trading.
Yesterday – notes Greg Secker – the FTSE closed down 72 points at 4,077 creeping closer to the key number of 4,000. It will be interesting to see if the index finds support at this key level over the next few days and bounces back up. The Dow closed yesterday down 64 points at 7,936 trading within a tight range at the lows. Yesterday – notes Greg Secker – the Dow opened with early weakness and tested 7,900. The index continued to hold at lows and proceeded to trade within a relatively tight range from 7,865 to 8,000 before ending the day with a slight loss. The index continues to hold at three-week support at 7,900 and continues to test the major 8,000 level, as well as the lower boundary of the large symmetrical triangle that continues to develop. Watch 7,850 and 8,000 for early direction today and over the coming days. Overnight the Bank of Australia cut interest rates by 1.0% to 3.25% and their Trade Balance fell. This 1.0% cut was in line with expectations and was factored into the value of the currency. This afternoon at 15.30 GMT the US Pending Home Sales will be released. If the actual figure is greater than the forecast then this is good for the currency. Today may be a little quiet because of the ADP Non-Farm Payroll figure due for release at 13.15 GMT tomorrow. This is an estimate guide figure to the official Non-Farm Payroll at 13.30 GMT on Friday. The forecast is for around 530,000 job losses in the US in the last month and it will be interesting to see how the Markets and new US Administration reacts if the actual figure is different from this. Good Trading.
