Published yesterday afternoon US revised second quarter GDP grew at 1 per cent in the quarter for an annualised rate of 3 per cent, up from an original 2.6 and the first time it’s been at 3 in two years. Growth was fuelled by consumer spending which was running at 3.3 per cent rather than initial estimates of 2.8 per cent. Inflation data remained subdued, with core personal consumption expenditures, the Fed’s favourite measure on consumer price growth, increased at an annual rate of just 0.9 per cent.
Research firm GfK reports that British consumers’ mood improved in August, rising to -10 from July’s one-year low at -12. This despite slow economic growth this year and strained Brexit talks.
DAX 30
Surprisingly little follow through from Tuesday afternoon’s bounce so that momentum remains negative. We are also trading below first Fibonacci retracement resistance and below the downward sloping trend line.
SHORT TERM TRADER: Small short at 12225; stop above 12300. Target 11550.
POSITION TAKER: Short at 12175; stop above 12355. Target 11500.
FTSE 100
Another index with little upside follow through as we remain stuck between the 50 and 200-day moving averages which are really very close together. Note that Provident Financial fell out of the index and so will Royal Mail in September.
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
Closing above our newly drawn tend line resistance as we continue to move sideways between 2420 and 2460 so that momentum is no longer negative.
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
Hanging on in there at half mast, half way between this summer’s high and low. Improved a little to £0.9200 per euro as we wait for the latest round of Brexit talks to end today with a joint briefing.
SHORT TERM TRADER: Small long at 1.2950; stop below 1.2770. Target 1.3100.
POSITION TAKER: Square.
EURO/US DOLLAR
Dipping back below the horizontal level at 1.1900 as bullish momentum eases. Remember that Monday 4th September is a North American holiday and that the ECB decides on monetary policy Thursday the 7th.
SHORT TERM TRADER: Closed out my long position at a profit this morning.
POSITION TAKER: Square.
GOLD
Rather nasty few days as we thrash around at the top of this year’s range.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
