Data out this morning showed that Japanese first quarter GDP dropped 0.6 per cent annualised (-0.2 per cent Q/Q), the first negative reading after 8 consecutive quarters of growth. In fact, over the last two years the economy grew for the longest period since the boom years when it saw 12 consecutive quarterly periods of growth between April 1986 and March 1989. That was then, this is now, and Q4 2017 growth was revised down to +0.6 per cent from an initial estimate of +1.6 per cent; a blow to Abenomics.
The US Geological Survey yesterday issued an aviation red alert warning that ash and volcanic smog might be spewed along aircraft routes and has already reached as high as 12,000 feet 12 days after the volcano erupted in Hawaii. Meanwhile on the US mainland the largest active geyser in Yellowstone Park burst into action for a fifth time this year. The USGS has issued videos explaining to the public that a super volcano eruption was unlikely.
DAX 30
Barely budging from its overbought situation with a tiny dragonfly doji yesterday. This the day that the World Trade Organisation ruled that the EU and four member states had illegally paid Airbus $18 billion in subsidies.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
FTSE 100
Still as overbought as it was at the record high.
SHORT TERM TRADER: Square.
POSITION TAKER: Short at 7700; stop well above 7800. Target 7000.
S&P 500
Retreating from the Fibonacci 61 per cent retracement of the drop from the record high. Bullish momentum unimpressive.
SHORT TERM TRADER: Short at 2725; stop above 2755. Target 2625.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Still trying to form a rounded bottom against Fibonacci 38 per cent retracement support and the 50-day moving average. Bearish momentum has nearly evaporated.
SHORT TERM TRADER: Long at 1.3545; stop below 1.3400. Target 1.4100.
POSITION TAKER: Small long at 1.3565; stop below 1.3400. Target 1.4300.
EURO/US DOLLAR
Sudden sell-off yesterday was certainly not what we had expected, and possibly triggered by speeches yesterday from the ECB’s Coeuré, Draghi, and Praet.
SHORT TERM TRADER: Long at 1.1910; stop below 1.1800. Target 1.2200.
POSITION TAKER: Long at 1.1910; stop below 1.1790. Target 1.2300.
GOLD
Another big surprise here with a slump through 1300 for the first time since December. A weekly close below here would complete a complex triple/quadruple top on the weekly chart suggesting prices have decisively broken out of the 1300 to 1360 congestion zone.
SHORT TERM TRADER: Stopped out of long for no loss.
POSITION TAKER: Stopped out of long position for a $20 loss.
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.
