While the US indices traded lower yesterday, it was not what you’d call a decisive turn. I doubt very much that America is in a recession, despite yesterday’s weak GDP reading and the ongoing protestations of the Economic Cycle Research Institute. While the economy is not booming, it is not on the critical list either. Further monetary looseness should continue to support Wall Street for the time being. A bit of a rally in the S&P and Dow would get me long today, while I still have no time for the Nasdaq 100.
for analysis of the Wall Street indices.Please note there will be no Outlooks on Friday, 1 February, as I am away.
COMMODITIES OUTLOOK
09.32
Having given repeat buy-signals on their swing charts on Tuesday, gold and silver now have another bullish force behind them. The weak fourth quarter performance of the US economy has underlined the prospect of yet further loose monetary policy and dollar depreciation. The resulting surge in the precious metals has caused me to ditch my near-term negative outlook, therefore. If they now dip only mildly and then rally convincingly once more, I shall get long. Silver looks especially attractive. Elsewhere, my calls on copper, Brent and EURUSD have been coming right. And I think there’s more upside potential, too.
for analysis of some leading commodity markets and EURUSD.EUROPEAN OUTLOOK
07.13
The bears finally got a modicum of relief yesterday as the DAX and FTSE came off their recent highs by a bit. I am not in the game of calling tops, though, and would be loath to declare the rally over quite yet. As I will explain in a video to be posted later today, extreme daily overboughtness in the FTSE – such as we have seen lately – is not a predictor of big corrections. And the peaks in the daily RSI above 80 do not usually mark the top of the market either.
Such selling as we have seen in FTSE and EURGBP has so far been pretty mild indeed. This is one more clue that the rally may have further to go. I am therefore on the lookout for buys here and a potential shorting entry in GBPUSD.
for analysis of some leading European markets.Please note that the IC website does not alert me when a comment is left. If you want a guaranteed reply to your comment or query, please write to me at dominic.picarda@ft.com
