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Market Outlook: FOMC Minutes published

Of meeting ending November 1st
November 23, 2017

CNBC reports that while members of the US Federal Open Market Committee were fairly optimistic about their economy in general, slightly concerned about low inflation, but they worried that financial markets were posing a danger.  Saying, ‘in light of elevated asset valuations and low financial volatility, several participants expressed concerns about potential build-up of financial imbalances.  They worried that a sharp reversal in asset prices could have damaging effects on the economy’.  

Thanksgiving holiday in the US today and markets are closed.  Many will be off work again tomorrow, so-called Black Friday.  I notice with horror that the practice has been adopted in Britain and discounts have started – probably on all sorts of unnecessary items – this week.

DAX 30

Reversing Tuesday’s gains with a bearish engulfing candle yesterday so that we are back down and tentatively testing Fibonacci 38 per cent retracement support.  This hints that a first interim high following the record high this month might be in place.

 

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

 

POSITION TAKER:  Square.

FTSE 100

A spectacular shooting star/doji candle yesterday where the high lines up with the many interim highs in August and September.  Like the Dax it suggests a first new interim high might be in place following this month’s pathetic attempt at a new record high.  Note that momentum is clearly bearish though not as strong as it was at one point in September.

 

SHORT TERM TRADER:   Short at 7470; stop above 7480.  Target 7125.

 

POSITION TAKER:  New short at 7375; stop above 7465.  Target 7125.

S&P 500

In what now looks like a small broadening top formation yesterday’s tiny doji hints at an undecided market.

 

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

 

POSITION TAKER:  Square.

BRITISH POUND/US DOLLAR

Bouncing from 50 per cent retracement support to manage a close above the upper edge of rectangle consolidation.  Bar the brief foray in the second half of September this is the strongest daily close in goodness knows how many months suggesting that further sterling gains are on the cards.  

 

SHORT TERM TRADER:  Took profits at my original target of 1.3300.  Will consider re-buying on a weekly close above here tomorrow.

 

POSITION TAKER:  Will generally start thinking about selling the US dollar depending where different currencies close tomorrow.  Careful though as markets will be thin.

EURO/US DOLLAR

The euro is reacting to generalised US dollar weakness rather than any good news from the Eurozone.  Yesterday’s rally has turned the commodity channel index up again, though we have stalled at a re-drawn trend line.   

 

SHORT TERM TRADER:  Stopped out of my short position this morning.

 

POSITION TAKER:  Square.

GOLD

A third decent reversal candle in four working days suggests a market thrashing around and looking for direction.

                            

SHORT TERM TRADER:  Short (and a little worried) 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.