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Market Outlook: Regulation swells

Over the last decade
October 6, 2017

City AM reports this morning that a study published by think-tank New Financial measured the effects on financial institutions in the decade to 2016 – and covering the post financial crisis fallout.  It states that more than 30 new agencies to regulate financial markets have sprung up in Europe and the US.  Their budgets have grown by a third and headcount is up by 40 per cent.  Investment bank revenues have dropped a corresponding third and pre-tax profits have halved.  Making hay and doubling in size over the same period are hedge funds, venture capital and private equity.

Yesterday Banc Sabadell, Catalonia’s second biggest after CaixaBank, moved its legal headquarters from Barcelona to Alicante.  Monday’s expected decision on Catalan independence may not go ahead as Spain’s Socialists in the region have ordered the parliament’s closure on that day via Spain’s Constitutional Court.

DAX 30

Inching to close at a new record high yesterday and still terribly overbought having rallied for seven consecutive days.  Apologies again for the lack of a daily outlook again yesterday but I’m struggling with the software.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

FTSE 100

 

Rallying just shy of June’s record high at the psychological 7600 level and now overbought like many other indices.

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Square.

S&P 500

Keeping clearly overbought as we shoot up to 2550.  Note that US employment data due today will have been affected by the hurricanes, also the reason vehicles sales boomed in September.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

BRITISH POUND/US DOLLAR

Mrs May’s speech at the Tory party conference has obviously gone down like a lead balloon among her MPs, voters and the market.  Today BBC Radio 4 reports that ex-Tory Co-Chairman Grant Shapps claims he has at least 30 MPs willing to call a leadership election.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Stopped out of my long position for a tiny profit but cross with myself as I could have made so much more.

EURO/US DOLLAR

Drifting fractionally lower as more Brexit talks loom.   

 

SHORT TERM TRADER:  Squared up my short position this morning at a small profit as everything’s looking a little unstable.

 

POSITION TAKER:  Square.

GOLD

ifting as expected and retracing almost a Fibonacci 61 per cent of this summer’s rally.

                            

SHORT TERM TRADER:  Short at 1291; stop above 1295; target 1245.

 

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.