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Market Outlook: ONS stats suspect

Errors go back 5 years
January 19, 2018

Tuesday the Office for National Statistics admitted that the way it had measured data relating to the telecoms industry was incorrect for the years between 2010 and 2015.  The implication, they say, is that their inflation data was too high and that economic growth was understated.  This affects pay negotiations, travel fares and index-linked gilts.  Today the Financial Times reports that the way ONS has been measuring retail sales data might also be incorrect.  Blaming the Black Friday event for sharply rising sales in November was not accorded sufficient weight when seasonally adjusting December’s sales.  A sector that accounts for more than 10 per cent of the economy.

Yet again the US government might be forced to shut down tomorrow unless a bill to allow federal agencies to borrow money is passed by the Senate today.  This is because they have already reached the allotted debt ceiling.   

DAX 30

Despite the bounce of the last two days bullish momentum is now zero. 

 

SHORT TERM TRADER:  Short at 13290; stop above 13550.  Target 12900.

 

POSITION TAKER:  Square.

FTSE 100

Though below the psychological 7700 and momentum is no longer bullish, let’s see if it can hold above first Fibonacci retracement support at 7675.

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Long at 7681; stop below 7645.  Target 8000.

S&P 500

Hovering at the record high and still overbought.

 

SHORT TERM TRADER:  Square but thinking of selling.

 

POSITION TAKER:  Square.

BRITISH POUND/US DOLLAR

Another relatively good week for the pound – and a really lousy one for the US dollar – as most analysts still won’t accept that with rate rises and good GDP the US is not outperforming in the currency market too.

 

SHORT TERM TRADER:  Will re-buy on a close above 1.3800 today.

 

POSITION TAKER:  Long at 1.3730; stop well below 1.3700.  First target 1.4000, then probably 1.4600.

EURO/US DOLLAR

Consolidation this week has elements of a flag chart formation (the flag pole was last week’s feature).  A close today above 1.2300 should set off the next round of short covering of stale FX positions and force a re-think on the economic basis of these views.

 

SHORT TERM TRADER:  Long at 1.2150; stop below 1.2140.  Target 1.2575.

 

POSITION TAKER:  Long at 1.2200; stop below 1.2100.  First target 1.2600, then maybe 1.3000.

GOLD

Back up toying with long term trend line resistance as US dollar weakness begins to hit home.

                            

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Short at 1317; stop above 1360.

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.