The Volker-rule, which has limited banks’ scope to take on risky trades introduced after the financial crisis of 2008, was yesterday eased a little. The Federal Reserve’s chairman, Jerome Powell, said regulators aimed to "replace overly complex and inefficient requirements with a more streamlined set". Key here is the ability to make markets as opposed to proprietary trading.
The latest Italian PM Carlo Cottarelli said it might be possible "for the birth of a political government" (as opposed to his technocratic one) if Five Star and Lega might form a government, something welcomed by President Mattarella.
DAX 30
An inside day yesterday following Tuesday’s big bearish Marabuzo candle. This is known as a ‘harami’ candlestick pattern and denotes a pregnant pause in market activity. We suggest another drop id due as the MACD remains decidedly bearish this week.
SHORT TERM TRADER: Tiny short at 13145; stop above 13050. Target 12400.
POSITION TAKER: Short at 12935; stop above 13210. Target 12000.
FTSE 100
Reversing Tuesday’s losses but momentum remains just bearish.
SHORT TERM TRADER: Tiny short at 7855; stop well above 7800. Target 7400.
POSITION TAKER: Small short at 7799; stop well above 7900. First target 7400.
S&P 500
Another index with a harami pattern yesterday and Tuesday (though slightly less elegant) because the body of the candle fits inside the previous day’s body.
SHORT TERM TRADER: Short at 2725; stop above 2745. Target 2625.
POSITION TAKER: Small short at 2720; stop above 2755. Target 2620.
BRITISH POUND/US DOLLAR
Trying but could do better, and still oversold.
SHORT TERM TRADER: Tiny long at 1.3275; stop below 1.3170. Target 1.3800.
POSITION TAKER: Square.
EURO/US DOLLAR
No longer oversold after yesterday’s decent bullish engulfing candle, which started at trend line support just ahead of 50 per cent retracement support. On the weekly chart, we might end up with a hammer candle marking a low to the corrective wave lower that started in April. Now grappling with trend line resistance, a break above which might set off another little round of short-covering.
SHORT TERM TRADER: New small long at 1.1685; stop below 1.1500. Target 1.2000.
POSITION TAKER: Square.
GOLD
This chart is becoming increasingly messy and lacking in any clear technical signals or chart patterns.
SHORT TERM TRADER: Stopped myself out of my short position for a small loss as I’m unhappy with this chart.
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.
