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Market Outlook: Browbeaten British Shopper

Tightens purse strings
October 20, 2017

ONS data yesterday showed that September retail spending in the UK grew at its slowest pace in four years.  Dropping by 0.8 per cent M/M, down 0.7 per cent excluding fuel, this took the annualised rate down to 1.2 per cent and 1.6 per cent respectively; this compares to spending rising at 2.3 per cent in August.  Senior statistician Kate Davies said, ‘there is a continuation of the underlying trend of steady growth in sales volumes following a weak start to the year, with a background of generally rising prices’.

At yesterday’s EU leaders’ dinner German Chancellor Angela Merkel said there was ‘zero indication’ that Brexit talks won’t succeed and that she ‘truly’ wanted an agreement rather than an ‘unpredictable resolution’, adding, ‘now both sides need to move’.

DAX 30

Stumbling at the record high with a hanging man candlestick.  Still overbought mind you.

 

SHORT TERM TRADER:  New small short at 13045; stop above 13125.  Target 12400.

 

POSITION TAKER:  Square.

FTSE 100

Another index with a hanging man candle but not completing a gently rounded top as it held above first Fibonacci support at 7480.  Note that bullish momentum is still negligible.

 

SHORT TERM TRADER:   Short at 7554; stop above 7600.  Target 7320.

 

POSITION TAKER:  Square.

S&P 500

Extraordinary doji yesterday, also with elements of a hanging man as per the previous two indices, yet managing to close above immediate trend line support and post a new record high on this IG index chart today.  Certainly unstable at current levels and ridiculously overbought.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

BRITISH POUND/US DOLLAR

Struggling to base against 1.3100 as the market ponders whether data and sentiment are robust enough for a rate hike any time soon.  The Bank of England is also under pressure to have a better social mix in its monetary policy committee.

 

SHORT TERM TRADER:  Still long at 1.3115; stop below 1.3100.  Target 1.3400.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Struggling in the middle of the range since late July as the Czech Republic goes to the polls today and tomorrow.  Businessman Andrej Babis is expected to win on a Eurosceptic platform and anti-Muslim immigration.  Once again traditional parties are expected to lose many seats.   

 

SHORT TERM TRADER:  Small long at 1.1770; stop below 1.1740.  Target 1.2000.

 

POSITION TAKER:  Square.

GOLD

Mixed, as has so often been the case this year.

                            

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.