This morning data from the Chinese mainland showed that the trade surplus dropped to $20.3 billion from a more usual $54.7 in December because the value of imports surged by 30.2 per cent. Exports rose too, but by a more modest 11.1 per cent. Analysts have suggested that the reasons behind this shift might be due to the week-long Lunar New Year holiday which starts on the eve of Friday the 15th February. This also might add to skittish financial markets in the country.
Data from Japan this morning has the Economy Watchers survey for January dipping to 49.9, just under the key 50 level, and another small blow to PM Abe’s reflationary hopes. This follows data earlier in the week where labour cash earnings saw salaries grow by a paltry 0.7 per cent in the year to December.
DAX 30
Holding at the upper end of this week’s very big range but under what had been trend line support since June 2016.
SHORT TERM TRADER: New small short at 12535; stop above 12875. Target 11700.
POSITION TAKER: Short at 12650; stop above 12900. First target 12050, then probably more.
FTSE 100
Stuck under the half-way mark of the drop from the record high. A very bearish MACD here and in other indices is expected to lead to further losses this month.
SHORT TERM TRADER: New small short at 7225; stop above 7400. First target 7000.
POSITION TAKER: Short at 7260; stop above 7400. First target 7050, then probably 6675.
S&P 500
Nasty spike high yesterday above the 50 per cent correction and trend line since August; this might signal a new interim high is in place.
SHORT TERM TRADER: Small short at 2760; stop above 2725; target 2550.
POSITION TAKER: Short at 2700; stop above 2750. First target 2545.
BRITISH POUND/US DOLLAR
Pity momentum’s bearish but let’s see if we can try and rally towards the end of the week. Bank of England’s MPC meeting today should be crushingly boring but watch what they have to say for themselves in the Quarterly Inflation Report.
SHORT TERM TRADER: Tiny long at 1.3975; stop below 1.3800. First target 1.4250.
POSITION TAKER: Long at 1.3930; stop well below 1.3800. First target 1.4275, then 1.4650.
EURO/US DOLLAR
Very disappointing as we break and close below triangle consolidation turning momentum bearish.
SHORT TERM TRADER: Stopped out of my long position at a loss.
POSITION TAKER: Stopped out of my long position at a profit.
GOLD
All precious metals beating a retreat this month as their safe-haven status is unclear and easy to sell assets are used for margin calls.
SHORT TERM TRADER: Small short at 1335; stop above 1355. Target 1280.
POSITION TAKER: New short at 1330; stop above 1366. Target 1250.
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.
