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Market Outlook: US weather warning

Coldest ever
January 2, 2018

The National Weather service warned that vast swathes of North America was set for some of the coldest temperatures ever recorded.  Aberdeen, in South Dakota, saw the mercury drop to minus 36 degrees centigrade.  New Year’s Eve parties were cancelled in some states and some schools will not reopen today as planned.  Adding to misery over the holiday season Reuters reports that the computers used by US airports to process immigration went down temporarily yesterday; Customs and Border Protection had no evidence that it was malicious.

On the fifth consecutive day of protests in Iranian towns, a policeman was shot dead.  Another estimated twelve protesters were killed earlier on.

DAX 30

The fourth quarter was not kind to the Dax with the index settling towards the lowest level of the three-month period following a new record high.  December’s candle is a small shooting star which coupled with the previous two forms a variant of an evening star.  Signs of instability.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  New short at 12920; stop above 13200.  Target 12400.

FTSE 100

Settling at its highest ever level and clearly above what had previously been resistance at 7600.  Certainly, seems to have a spring in its step.

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  New long at 7681; stop below 7580.  Target 8000.

S&P 500

Tiny signs of instability on the fourteenth consecutive monthly rally.  Overstretched to put it mildly and bearish price action on the last day of trading in December.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

BRITISH POUND/US DOLLAR

So much for the oft-predicted parity either against the US dollar or the euro.  A second consecutive monthly close just above horizontal resistance hints a gathering bullish momentum. 

 

SHORT TERM TRADER:  New long at 1.3540; stop below 1.3400.  First target 1.3800.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Against a background of generalised US dollar weakness, the euro has managed its strongest monthly close in two years.  This looks almost like an important break higher and it’s on its way to recovering half of the losses on 2014-2015. 

 

SHORT TERM TRADER:  New small long at 1.2035; stop below 1.1920.  Target 1.2185.

 

POSITION TAKER:  Square.

GOLD

Just as difficult as it has been in months, potentially forming a massive gentle rounded bottom since mid-2013.  Potentially slightly overbought short term as it’s rallied steadily since mid-December.

                            

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.