In a planned speech yesterday US Fed chairman Janet Yellen said that perhaps her organisation had ‘misjudged’ factors which have been dragging on US inflation for some years now. ‘This low inflation likely reflects factors whose influence should fade over time’, thus clinging to the view that this is a mere blip and things should return to ‘normal’ any time soon. Therefore she said she’s sticking to her ‘gradual’ approach to raising the target interest rate and was also ‘wary of moving too gradually’.
BBC Radio 4 reported this morning that data from the Office for National Statistics showed a leap in the number of working mothers in Britain, 4.9 million doing so in 2016, an increase of 1.2 million since 1996. This means that 74 per cent of Mums with dependent children are in work, part or full time, the biggest increase over the period sampled in those with very young kids (3-4 year-olds) rising from 56 to 65 per cent. Single mothers were the group least likely to be employed and only 71.7 per cent of single fathers work compared to 93 per cent of married fathers.
DAX 30
Remarkably unmoved by the result of the German election where the salient feature was the dramatic collapse in the votes garnered by the central right and left parties. Note the commodity channel index turned down last week.
SHORT TERM TRADER: New short at 12625; stop above 12700. Target 12125.
POSITION TAKER: Square.
FTSE 100
Consolidating in a potential inverted flag formation above long term trend line support.
SHORT TERM TRADER: Short at 7220; stop above 7335. Target 7100.
POSITION TAKER: Short at 7300; stop above 7375. Target roughly 7000.
S&P 500
Close to the record high yet bullish momentum is zero and we formed a hanging man pattern yesterday. Overnight the US Commerce Department slapped import tariffs of 219 per cent on Bombardier C-series jets because of unfair subsidies by Canada and Britain.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Retreating from this year’s high and while bullish momentum has dropped significantly, it’s still bullish.
SHORT TERM TRADER: Small long at 1.3585; stop below 1.3375. Target 1.3800 and probably 1.4000.
POSITION TAKER: Long at 1.3195; stop below 1.3225. Decided to hang on and see if we can get to 1.4000 – preferably pronto!
EURO/US DOLLAR
Following a gentle head & shoulders top (triple top almost) the break below trend line support has seen losses accelerate as the euro retreats from this year’s high.
SHORT TERM TRADER: Stopped myself out of my long position at a small loss and have gone short this morning at 1.1750. Stop above 1,1910; target 1.1600.
POSITION TAKER: Square.
GOLD
Thrashing around as it tries to hold above the 1295 level this week, managing to produce a tweezers top in the process. This hints at a new interim high and therefore we have drawn a potential new down trend line.
SHORT TERM TRADER: New short at 1291; stop above 1320; target 1240.
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.
