At a Washington event yesterday, ahead of a G20 meeting, pledged to keep interest rates at their current ultra-low level until ‘well past’ the end of its bond-buying programme. ‘The well past is very, very important in anchoring rate expectations’. Earlier in the day the head of the German Bundesbank, Yens Weidmann had said that current ultra-low rates ‘must not last too long and, in an economic upturn, the monetary policy taps must be turned off in a quick and consistent manner’.
A few months ago, Mark Carney of the Bank of England warned banks about lending too much, especially via unsecured loans. Incredibly, they listened and credit conditions today are at their toughest since 2008. The latest survey shows they are prepared to lend 30 per cent less unsecured loans, yet secured lending has leapt by 40 per cent. Swings and roundabouts.
DAX 30
Inching to a new record high on a Friday the 13th in October, and ridiculously overbought. Some would say the omens are not great.
SHORT TERM TRADER: Considering going short if proper bearish candles form.
POSITION TAKER: Square.
FTSE 100
A shooting star at a new record high (which the media have eagerly picked up on) and very overbought. Price action reminiscent of the highs in June and August.
SHORT TERM TRADER: Added to my short position this morning at 7554; stop remains above 7600. Target 7320.
POSITION TAKER: Square.
S&P 500
Overbought and really going nowhere as cryptocurrency fever spreads.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Recovering quickly from another Brexit-induced swoon to form a hammer candle. This underlines the point that we are seeing generalised US dollar weakness – though not against some emerging market currencies.
SHORT TERM TRADER: Small long at 1.3115; stop below 1.3100. Target 1.3400.
POSITION TAKER: Square.
EURO/US DOLLAR
Trading half way between the 1.1700 to 1.2000 range that’s held since August.
SHORT TERM TRADER: Small long at 1.1770; stop below 1.1740. Target 1.2000.
POSITION TAKER: Square.
GOLD
Momentum has just turned bullish as gold trades roughly in the middle of this summer’s range.
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.
