After President Trump vowed to impose a 25 per cent duty on a total of $50 billion ‘industrially significant [Chinese] technologies’ imported into the USA, China’s foreign minister said they would retaliate with taxes ‘of the same scale and intensity’ because the White House had ‘ignited a trade war’. Of the 659 items in line for punitive treatment are cars, soybeans, and seafood.
At rush hour this morning a magnitude 6.1 earthquake hit Japan’s second city, Osaka, on the west of the country. Factories in this important industrial area were closed for the day, water pipes have ruptured, at least one home burst into flames, and three people have died.
DAX 30
A potential double top against the Fibonacci 76.4 retracement resistance level in a series of irregular double tops that began in May last year. The commodity channel index just might be about to turn down to and we still feel we are currently building the right shoulder of a long-term head-and-shoulders top. Note that Chancellor Merkel is struggling to keep her coalition together as Bavaria’s CSU interior minister disagrees strongly with her immigration policy.
SHORT TERM TRADER: New short at 12955; stop well above 13200. Target 12200.
POSITION TAKER: Square.
FTSE 100
A fourth consecutive bearish weekly candle last week (shooting star) and the commodity channel index resolutely pointing lower since the record high.
SHORT TERM TRADER: Tiny short at 7855; stop well above 7800. Target 7400.
POSITION TAKER: Small short at 7799; stop well above 7800. First target 7400, then 7100.
S&P 500
A hanging man candle on Friday forms part of last week’s tiny spinning top doji just under trend line resistance and the MACD is mixed at best. A complex and rather messy chart.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Holding again at 1.3200 with the commodity channel index yet to turn positive.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Mixed messages here with the euro almost oversold yet having formed a bearish engulfing candle last week just ahead of 50 per cent retracement support. Spain’s new government trying out a new tactic with Mediterranean migrants by accepting the 600 or so boatload for a 45-day asylum application and processing period.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Friday’s sharp sell-off and weekly close well below anything we’ve seen this year has added to bearish momentum. We favour a test of long term trend line support at 1270 this month.
SHORT TERM TRADER: Tiny short at 1294; stop above 1303. Target 1265.
POSITION TAKER: Short at 1298; stop well above 1310. Target 1250.
