After the best part of three months’ discussion the coalition partners’ suggestion of a complete unknown, with no political experience, was ratified by Italian President Sergio Mararella. This leaves the heads of both 5 Star and the League to carry on business as usual in parliament. The next step, choosing cabinet ministers, must also be ratified by the President, who appears reluctant to dispute decisions made by the coalition lest he seem partisan.
Contrary to Turkish President Tayyip Erdogan’s wishes, Turkey’s central bank was forced to raise interest rates by 300 basis points to 16.5 per cent to try and stem the exodus from the country’s currency. In line with other emerging market currencies, the lira has lost about 20 per cent of its value against the US dollar so far this year.
DAX 30
No longer overbought as suddenly, just like that, it takes a tumble. Momentum is now neutral but a close below trend line support would make in negative. Today Deutsche Bank announced another 7000 global job cuts as it share price hovers all too close to a two decade (maybe more) low.
SHORT TERM TRADER: Tiny short at 13145; stop quite a bit above 13200. Target 12400.
POSITION TAKER: Might re-sell depending on today and Friday’s close.
FTSE 100
Still overbought with Tuesday’s dragonfly/shooting star doji at the centre of a three-candle evening star pattern which ought to mark an interim high.
SHORT TERM TRADER: Tiny short at 7855; stop well above 7900. Target 7400.
POSITION TAKER: New small short at 7799; stop well above 7900. First target 7400.
S&P 500
More small signs of instability yesterday with a hanging man candle.
SHORT TERM TRADER: Short at 2725; stop above 2755. Target 2625.
POSITION TAKER: Small short at 2720; stop above 2755. Target 2620.
BRITISH POUND/US DOLLAR
The slide below 1.3400 is not as bad as it might have been because emerging markets are bearing the brunt of currency selling. More oversold than it has been since October 2016.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Probably only IG managed to post prices below 1.1700 yesterday evening. The euro trying to heave its way back above here this morning and is still very oversold.
SHORT TERM TRADER: Long at 1.1795; stop well below 1.1700. Target 1.2150.
POSITION TAKER: Square.
GOLD
Momentum is still bearish as it was Friday as we consolidate following Monday’s hammer.
SHORT TERM TRADER: Short at 1292; stop quite a bit above 1300. First target 1240.
POSITION TAKER: Square.
