A move originally put forward by the Democrats, the US government debt ceiling which will be reached around the 15th of this month has been raised to $19.8 trillion until mid-December. This manoeuvre will mean the Federal government avoids defaulting on maturing Treasury paper. This surprising move, agreed to by President Trump, has infuriated other Republicans. In another surprising move yesterday Stanley Fisher, vice chairman of the Federal Reserve board, will quit his job for personal reasons around the 13th October. A hawk in terms of interest rate policy, he also believes in keeping US banks on a very tight rein. This means that there will be four vacant positions on the seven person Board of Governors.
The Financial Times today reports that Saudi Arabia has redrafted the crown prince’s transformation plan. They suggest that Mohammed bin Salman’s National Transformation Plan to wean the economy off its oil dependency may have been too radical and too ambitious.
DAX 30
Yesterday’s burst through immediate trend line resistance has not stopped the 50-day moving average crossing below the 200-day one, something watched by momentum investors and know by technical analysts as a death cross. It’s bearish.
SHORT TERM TRADER: Stopped out of short position with a 40 pip loss.
POSITION TAKER: Short at 12175; stop above 12355. Target 11500.
FTSE 100
A dragonfly doji yesterday underlines just how wary the market is of getting too close to chart support around 7300. Yesterday the Office for National Statistics, based now in Newport, South Wales, will delay the release of retail sales data due this month because it has been hit by yet more IT problems.
SHORT TERM TRADER: Square.
POSITION TAKER: Short at 7300; stop above 7460. Target roughly 7000.
S&P 500
Another day of fairly sharp intra-day price moves inside the small range that has dominated this summer.
SHORT TERM TRADER: Short at 2468; stop above 2480. Next target is pivotal support at 2400.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Stalling at the badly drawn trend line from 2014’s high. Not too surprising really.
SHORT TERM TRADER: Small long at 1.2950; stop below 1.2910. Target 1.3100.
POSITION TAKER: Square.
EURO/US DOLLAR
Strange how the MACD has not been positive this month though we remain close to this year’s high, something which might shade the ECB’s outlook at their meeting today followed by Draghi’s press conference.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Holding at this year’s high but overbought again in the process.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
