The German government has called an emergency meeting today in Berlin with the top brass of the major car manufacturers. They will be hoping to avoid the banning of diesel cars in city centres. This is terribly important as diesel engines are at the core of their so-called ‘climate protection’ policy plus they trail well behind Asian vehicles in terms of electric cars. In the US yesterday data for July vehicle sales was grim all round. A total 16.73 million cars shifted on an annualised basis, well down from April’s 18.4 million peak. All brands saw shrinking volumes (except Toyota with a 3.6 per cent rise), BMW and GM hardest hit with an almost a 15 per cent decline.
Yesterday the Office of the Comptroller of the Currency started the process of amending the Volker Rule. Implemented after the 2008 financial crisis it prevents banks from actively trading their own money. It will be seeking comment from financial institutions as to how the rule is currently working. Guess what Wall Street will say?
DAX 30
Yesterday’s sizeable bounce has halved bearish momentum and saw the market retrace a Fibonacci 23.6 per cent of the decline since June’s record high.
SHORT TERM TRADER: Small short at 12225; stop above 12355. Target 11550.
POSITION TAKER: Short at 12175; stop above 12400. Target 11500.
FTSE 100
Consolidating in a sort of triangle since mid-July, normally a consolidation pattern. Let’s see if we can maintain our little series of descending highs.
SHORT TERM TRADER: Short at 7394; stop above 7520. First target 7300.
POSITION TAKER: Square.
S&P 500
US bank shares trading higher as the Volker rule and other measures towards deregulation are pondered. While the S&P 500 remains close to its record high bullish momentum has slumped.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Yesterday’s mini shooting star candle hints at instability yet bullish momentum has actually increased.
SHORT TERM TRADER: Square.
POSITION TAKER: Small long at 1.3090; stop below 1.3000. Target 1.3400.
EURO/US DOLLAR
Banging up against this year’s high with strong bullish momentum hinting at an imminent move to higher ground. Were this the case watch the US dollar index where, because the euro has over a 50 per cent weighting, it might force it below key long term dollar chart support.
SHORT TERM TRADER: Long at 1.1740; stop well below 1.1600. Target 1.2150.
POSITION TAKER: Square.
GOLD
A bit more like it with a large dragonfly doji against Fibonacci 76.4 per cent retracement resistance. Watch to see whether the commodity channel index turns down at today’s close.
SHORT TERM TRADER: Tiny new short at 1266; stop above 1280. Target 1220.
POSITION TAKER: Square.
