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Market Outlook: VW £7000 bonus

To scrap diesel cars
September 1, 2017

And about time too, some might say.  Announced early this morning the Financial Times reports that the German car giant has agreed to buy back any British pre-2010 diesel cars and give generous incentives to those buying its hybrid cars.  Starting at £1500 for a SEAT saloon, through all VW and Skoda vehicles, and up to £7000 for a large Audi.  This follows Toyota’s announcement hours earlier and Ford’s last month.

Ahead of a long US weekend employment data for August is published this afternoon.  Pollsters and economists expect another 180,000 jobs will have been created, in line with this year’s average monthly rate, and that unemployment will remain at just 4.3 per cent.  Note that the labour force participation rate remains low at 62.9 per cent.

DAX 30

Biding its time until this afternoon’s data as we consolidate below first Fibonacci retracement resistance and below the downward sloping trend line, while momentum remains bearish. 

 

SHORT TERM TRADER:  Small short at 12225; stop above 12300.  Target 11550.

 

POSITION TAKER:  Short at 12175; stop above 12355.  Target 11500.

FTSE 100

Back up to August’s interim highs and looking quite a bit stronger than we had imagined.

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Short at 7300; stop above 7460.  Target roughly 7000.

S&P 500

MACD turning bullish again as we move towards the record high.

 

SHORT TERM TRADER:  Short at 2468; stop above 2475.  Next target is pivotal support at 2400.

 

POSITION TAKER:  Square.

BRITISH POUND/US DOLLAR

A fairly powerful hammer candle yesterday against Fibonacci 61 per cent retracement support suggests we have found another interim low.  This is of course against a background of generalised US dollar weakness, encouraged yesterday by US Treasury secretary Mnuchin who said, ‘as it relates to trade, having a weaker dollar is somewhat better for us’.

 

SHORT TERM TRADER:  Small long at 1.2950; stop below 1.2850.  Target 1.3100.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Rallying steadily since mid-April with a hammer candle yesterday clearly ahead of trend line support.

 

SHORT TERM TRADER:  Square and wondering where to re-buy.

 

POSITION TAKER:  Square.

GOLD

Rallying very smartly from the 1300 area, a level that had been resistance and has now become support, helped of course by generalised US dollar weakness.

                            

SHORT TERM TRADER:  Square.

 

POSITION TAKER:   Square.

Nicole Elliott is a long standing Member of the Society of Technical Analysts and has taken over the IC’s trading coverage.  She is regularly interviewed and quoted by the financial media, is a conference speaker, and author of several books on charting.