Chair of the US Federal Reserve Janet Yellen announced she will step down from this role on Monday and on Tuesday was addressing students at New York University Stern School of Business. Insisting that rates should rise gradually as inflation would do so too, she noted, ‘I will say I am very uncertain about this. My colleagues and I are not certain it is transitory, and we are monitoring [low] inflation very closely. It may be that there is something more endemic going on or long-lasting’.
Post-Lehman’s collapse in 2008 the Financial Stability Board based in Basel introduced the concept of global systemically important banks and since 2011 has been setting extra capital requirements for these. A report published yesterday shows that JP Morgan Chase sits alone at the top tier group and must hold an extra 2.5 per cent; Citi dropped into the tier below that and needs 2 per cent. Below this is another fallen megabank, BNP Paribas together with two new entrants: Bank of China and China Construction Bank. Credit Suisse was also relegated to the lowest rung. UK banks were unchanged.
DAX 30
Bouncing from Fibonacci 38 per cent retracement support as we had thought and despite a bearish MACD. Let’s see where it stalls now.
SHORT TERM TRADER: Short at 12960; stop above 13225. First target 12700.
POSITION TAKER: Square.
FTSE 100
Holding above Fibonacci 61 per cent retracement support as the bearish MACD has eases some more.
SHORT TERM TRADER: Short at 7470; stop above 7480. Target 7125.
POSITION TAKER: Square.
S&P 500
Both here and the Dow Industrials managed to eke out new record closing highs – but by the slimmest of margins.
SHORT TERM TRADER: Short at 2565; stop above 2615. First target 2515 and more realistically 2460.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
A glacial pace as we consolidate towards the upper reaches of rectangle consolidation because momentum remains so low.
SHORT TERM TRADER: Long at 1.3155; stop below 1.3100. Target 1.3300.
POSITION TAKER: Square.
EURO/US DOLLAR
The commodity channel index did turn down as expected but prices have gone nowhere.
SHORT TERM TRADER: Short at 1.1740; stop above 1.1825. Target 1.1600.
POSITION TAKER: Square.
GOLD
As difficult a chart as it always seems to be.
SHORT TERM TRADER: Short at 1281; stop above 1300. Target 1260.
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.
