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Market Outlook: Decisive presidential election result in Mexico

Again, the establishment loses out
July 2, 2018

Left-leaning Andres Manuel Lopez Obrador, known more usually as AMLO, is estimated to have gathered 53 per cent of yesterday’s votes, double his nearest rival; the other 3 candidates have accepted defeat.  Jose Antonio Meade, of the Institutional Revolutionary Party (PRI) which has ruled Mexico for nearly 100 years, is thought to have got the fewest votes.  AMLO is no stranger to politics though, having been Mayor of Mexico City from 2000 to 2005 when he stepped down to enter 2006’s presidential election.  He has consistently campaigned on a platform to eradicate corruption, deal with drug gangs, and rebalance Latin America’s most unequal wealth distribution.

Debt monitoring service Link Asset Services reports that UK publicly listed companies hold a record £390.7 billion in debt, up 69 per cent from 2011’s most recent trough; £122.6 billion has been piled on in the last 3 years.  Over this same period firms have paid out £263 billion to shareholders.

DAX 30

The monthly MACD has been decidedly bearish nearly all of this year and the chart shows a clear potential head & shoulders topping pattern after a steady climb since 2009.

 

SHORT TERM TRADER:  Looking to re-sell, probably on daily closes below 12000 and 11700.

 

POSITION TAKER:  Short at 12550; stop well above 12465.  Target 11900.

FTSE 100

Another index where the MACD has not been bullish so far this year.  Note the potential broadening top formation at the top of the rally since 2009 where an awful lot of time was spent consolidating between 6000 and 7000.

 

SHORT TERM TRADER:   Short at a couple of levels; stop above well 7710.  Target 7400.

 

POSITION TAKER:  Small short at 7799; stop well above 7800.  First target 7400, then 7100.

S&P 500

Still overbought, though less spectacularly so, as it has been all this year.  Consolidating in a triangle, which might mark a top though it is more often associated with bouts of consolidation.  President Trump attempting to micro-manage all aspects of the US economy, crude oil prices this weekend.

 

SHORT TERM TRADER:  Considering re-selling on a daily close below 2680.

 

POSITION TAKER:   Will sell on a weekly close below 2600.

BRITISH POUND/US DOLLAR

Really not a lot to look at on this monthly chart.  Let’s see if trend line support and the 1.3000 area can provide an interim base to last quarter’s correction lower, thereby keeping the MACD in positive territory.   

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Interesting to see that despite the retreats in 2016 and again this year the monthly MACD has been bullish all along.

 

SHORT TERM TRADER:  Long at 1.1655; stop below 1.1500.  First target 1.1850.

 

POSITION TAKER:  Square.

GOLD

Momentum might turn bearish this month after three consecutive monthly declines in prices.  Otherwise, a spectacularly non-trending market since 2013.    

                            

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.