The Eurozone bank reporting season is in full swing and some parts of the curate’s egg are ugly indeed. Germany’s biggest bank lost €2.19 billion in Q4 2017, caused by a combination of poor trading revenues, divestment costs, restructuring charges, US tax changes and fines; this took the whole year to a loss of €497 million while revenue is at a 7-year low. Ever the optimist CEO John Cryan said, ‘we believe we are firmly on the path to producing growth and higher returns with sustained discipline on costs and risks.’
Data from the UK’s ONS yesterday saw another 800,000 millionaire households created between 2014 and the latest data (for 2016). Total British wealth now stands at a nominal £12.8 trillion where the mean is £259,400. There are 3.6 million homes which have over £1 million in assets and just as many which have just £20,000. Contrary to current conventional wisdom, the Gini coefficient has dropped a pip to 0.62 from 0.63 meaning that inequality has shrunk slightly.
DAX 30
Yesterday’s big Marabuzo candle has brought this index crashing back down to where it was at the beginning of October. The MACD turned bearish and a weekly close below 12800 today should add to downside pressure.
SHORT TERM TRADER: Took profits at 13000 as planned. Now considering re-selling here and on several other indices depending where we settle tonight.
POSITION TAKER: Thinking of selling this afternoon.
FTSE 100
As at this morning we have potentially five consecutive decent daily declines. Ouch!
SHORT TERM TRADER: Took profits this morning at 7475, just ahead of original target at 7450. Will re-sell depending on today’s close.
POSITION TAKER: Might revert to shorting this market – as is my habit.
S&P 500
When newspaper City AM’s front page screams: THE $1 TRILLION RACE (of the US tech giants to become one) – we say ‘careful’. Trouble is, a trillion dollars is not what it used to be.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
The strongest daily close since before the referendum and cable’s retraced a Fibonacci 76.4 per cent of post 25 June 2016 losses. No mean feat when all too many are still castigating the country for voting leave.
SHORT TERM TRADER: Small long at 1.4125; stop well below 1.4120. Target 1.4440.
POSITION TAKER: Square and looking to re-buy.
EURO/US DOLLAR
Yesterday’s close above the top of the triangle chart pattern has increased bullish momentum a tad. We look set for a strong weekly close following January’s strong monthly one.
SHORT TERM TRADER: 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
Re-testing long term trend line resistance as US dollar weakness lends support.
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.
