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Market Outlook: Norway to dump oil

Wealth fund re-think
November 17, 2017

Norway’s trillion-dollar sovereign wealth fund said yesterday that it plans to start selling up to $35 billion of the oil and gas shares it currently holds.  Some suggest it is to brush up on its green credentials, others that it is a hedge against falling crude oil prices.  But if you think about it, if one’s income stems from fossil fuels is it not putting all your eggs in one basket if you then plough your cash back into the same industry group.  Remember: Enron staff were encouraged to park their pension savings in Enron shares.  

The Financial Times reports that Saudi authorities are negotiating with those currently being held at the Plaza hotel in Riyadh that in exchange for up to 70 per cent of their wealth they will be freed.  This is because they claim that the funds are a product of corrupt practices – not mentioning the fact that government coffers are seriously depleted, having very recently issued a sovereign bond and hoping to sell part of Saudi Aramco.

DAX 30

Wednesday’s hammer led to yesterday’s bounce hinting that the market will hold and close above the 38 per cent Fibonacci retracement level today, despite a bearish MACD.

 

SHORT TERM TRADER:  Short at 12960; stop above 13225.  First target 12700.

 

POSITION TAKER:  Will sell at today’s close if the market is clearly below 13000.

FTSE 100

Momentum is almost as bearish as it was when we were trading down at 7200.  A weekly close today clearly below 7400 will probably add to downside pressure and turn momentum bearish on the weekly chart.

 

SHORT TERM TRADER:   Short at 7470; stop above 7500.  Target 7125.

 

POSITION TAKER:  Square.

S&P 500

Though the MACD remains bearish yesterday’s rally was one of the biggest in a while and started at what may perhaps turn out to be the neckline of a head-and-shoulders top.

 

SHORT TERM TRADER:  Short at 2565; stop above 2615.  First target 2515 and more realistically 2460.

 

POSITION TAKER:  Square.

BRITISH POUND/US DOLLAR

Inching up a little for a fifth consecutive day.  Why Mr Blankfein feels he is in a position to suggest Britain should have another referendum on Brexit, who knows, but it could be that he’s done the sums as to what it would cost his firm to move to Frankfurt.  

 

SHORT TERM TRADER:  Long at 1.3155; stop below 1.3060.  Target 1.3300.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Quite a bit of divergence here with a potential second shooting star candle today, this time against the 50 per cent retracement level.  Note also that though momentum is bullish the commodity channel indicator looks set to turn down.   

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

GOLD

Stuck in the middle of the big triangle yet the commodity channel index looks set to top – like that of the euro-dollar.

                            

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.