At yesterday’s final FOMC meeting chaired by Ms Yellen minutes were positive: ‘Gains in employment, household spending, and business fixed investment have been solid, and the unemployment rate stayed low’ while inflation is expected to inch up to the 2 per cent target and then stay there. The Fed Funds target rate was not changed from its current 1.25 to 1.50 per cent as the risks to the outlook remained roughly balanced. Her successor, Jay Powell, will be signed in on Monday.
The youthful leader of Italy’s Five Star anti-establishment party, Luigi Di Maio (31), in London yesterday spoke to 30 or so fund managers about helping Italian banks claw back money owed to them by borrowers. Later, on Bloomberg television, he admitted that it was ‘taking 7 to 10 years’ to recover debts because of Italy’s ‘Byzantine laws’. Over in Spain its second-biggest bank, BBVA, yesterday reported a 90 per cent fall in Q4 2017 net profit. This is the time for European banks to reveal what’s inside the tin.
DAX 30
Holding at the 50 per cent retracement level and sort of in the middle of the range of the last few months, but the MACD turned bearish.
SHORT TERM TRADER: Tiny short at 13360; stop above 13450. Target 13000.
POSITION TAKER: Square.
FTSE 100
Retracing half the gains since early December with momentum at its most bearish since mid-November.
SHORT TERM TRADER: Short at 7590; stop above 7715. Target 7450.
POSITION TAKER: Square.
S&P 500
Holding first Fibonacci retracement support but the MACD has suddenly turned bearish.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Nudging on up from Fibonacci retracement support as the pound is close to its strongest level against the euro since June last year – despite the massively negative media coverage of interminable Brexit and Theresa May.
SHORT TERM TRADER: Small long at 1.4125; stop well below 1.4000. Target 1.4440.
POSITION TAKER: Square and looking to re-buy.
EURO/US DOLLAR
Slightly straggly consolidation in what now looks to be a triangle chart pattern with momentum clearly bullish. Time for another leg up in February?
SHORT TERM TRADER: New small long at 1.2425; stop well below 1.2300. Target 1.2600.
POSITION TAKER: Long at 1.2200; stop below 1.2290. First target 1.2600, then maybe 1.3000.
GOLD
Holding first Fibonacci retracement support but the MACD has started to turn down a little, slowly.
SHORT TERM TRADER: Small short at 1335; stop above 1366. Target 1280.
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.
