Every few years the US government goes through the charade of worrying about reaching the its public debt ceiling. Treasury secretary Mnuchin knows this and if an increase in the debt ceiling is not decided by the 30th September he will have to deal with a nation in default. At yesterday’s rally in Phoenix President Trump said, ‘I think we’ll end up probably terminating NAFTA at some point’ and continued, ‘if we have to close down our government, we’re building that wall [along the Mexican border]‘.
Bloomberg reports that at 09:10 local time the Hong Kong Observatory issued its highest storm warning, a Number 10 signal for the first time since 2012. Typhoon Hato is an early reminder that hurricane season looms in the Caribbean soon. The stock exchange has been closed all day and 450 flights cancelled.
DAX 30
Trapped between the 50 and 200-day moving averages, trend line resistance and the horizontal level at 12355. Note that data from Germany yesterday showed that August’s ZEW survey showed economic sentiment slumped from 17.5 to 10 dragging the whole Euro area reading to 29.3 from 35.6.
SHORT TERM TRADER: Small short at 12225; stop above 12355. Target 11550.
POSITION TAKER: Short at 12175; stop above 12355. Target 11500.
FTSE 100
Retreating slowly from the psychological level at 7400 and a descending 50-day moving average – which lies uncomfortably close to the 200-day one..
SHORT TERM TRADER: Square but will sell on a daily close below 7300.
POSITION TAKER: Short at 7300; stop above 7460. Target roughly 7000.
S&P 500
The MACD still clearly bearish as the index retreats a tad from potential trend line resistance.
SHORT TERM TRADER: Short at 2468; stop above 2475. Next target is pivotal support at 2400.
POSITION TAKER: Will sell on a weekly close below 2400.
BRITISH POUND/US DOLLAR
Sterling retreating a little further, back to where it was mid-July and so that one now needs £0.9170 to buy a euro (in the spot market).
SHORT TERM TRADER: Small long at 1.2885; stop below 1.2800. Target 1.3100, maybe 1.3270/1.3300.
EURO/US DOLLAR
Zero momentum as we wait for the ECB’s Mario Draghi’s speech today – and again at Jackson Hole on Friday.
SHORT TERM TRADER: Small long at 1.1745; stop below 1.1600. First target 1.1890 but in truth looking for a burst to a new high for this year.
POSITION TAKER: Square.
GOLD
Holding under an established interim high so far this year so that the commodity channel index has dipped yet again.
SHORT TERM TRADER: So tempted to try another short but reluctant as we could get another sudden spike to goodness only knows where.
POSITION TAKER: Square.
