FTSE 100 Flies AS Caixin China PMI Improves
- The FTSE 100 has bullish bias today as Caixin China PMI Mfg. improves
- Yesterday’s Chicago PMI was very soft, but the market is ignoring that for now. U.S. ISM Mfg. might remedy yesterday’s soft Chicago PMI reading
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The FTSE 100 is higher by 0.55 percent at the time of this writing and a break to last week’s high of 6401 may trigger a multi-day rally towards the November high of 6401. If price does indeed break that high then I expect short-term traders to use yesterday’s low of 6328 as the key and stop level for bullish positions. This is in line with yesterday’s outlook.
Yesterday, we also said traders will most probably seek a long position in the region of 6344 and 6287, something that previously occurred and is likely to again if we don’t get a break to last week’s high in today’s session.
The overall trend is bullish above the November 24 low at 6220.
U.S. ISM On Tap
Yesterday’s Chicago PMI reading was very soft by printing 48.7 vs. the 54 expected (Bloomberg News Survey). The prior reading was 56.2, hence, the drop was great and does not bode well. We can probably expect a softer stock market if more data reports print soft as with the Chicago PMI. However, for now the technical trend across most stock markets is bullish which is why the markets are somewhat insulated from bad reports as this stage.
A more respected indicator given its nationwide coverage, and hence more crucial for overall trading, is today’s U.S. ISM reading. A Bloomberg survey forecasts an outcome of 50.5 from 50.1. As long as this indicator manages to remain above 50.1, I would expect stock markets to be supported. U.S. Construction Spending (MoM) and a speech by USD Fed's Evans Speaks are also on tap.
In the overnight session the Caixin China PMI Mfg. for November printed 48.6 vs. the 48.3 expected and 48.3 prior. This is yet another improvement and supports today’s bullish bias.
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
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