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Market Outlook: Saudi cuts Canadian ties

Over women activists
August 6, 2018

Last night Saudi Arabia hit back at Canadian interference in national affairs, cutting diplomatic ties and giving the Canadian ambassador 24 hours to leave the country. It will suspend new trade and investments in Canada and might take further action.  This follows the foreign ministry’s suggestion that Riyadh should immediately release civil rights activists, some of which were arrested last week as part of a crackdown on women’s rights activists, clerics and journalists.

A second earthquake in a week hit the Indonesian holiday island of Lombok last night, killing at least 91 people and injuring 209.  Extra flights are being laid on so that tourists who want to can cut their holidays short.

DAX 30

The body of last week’s candle lies inside the previous one, the pair known as a Harami, meaning a pregnant pause.  We have now spent 17 weeks forming what we think might be the right shoulder of a head & shoulders top, compared to the 26 spent on the left shoulder.  Momentum is bearish.

SHORT TERM TRADER:  Short at 12635; stop above 12930.  Target 12200.

POSITION TAKER:  Square.

 

FTSE 100

Unbelievable as we manage a 10th consecutive doji style candle; momentum turned bearish on the latest one. 

SHORT TERM TRADER:   Short at 7610; stop above 7800.  First target 7500.

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

 

S&P 500

Almost back up at this year’s record high yet the index is not overbought on the RSI.  The cloud and its moving averages have supported the rally for months. Iran sanctions start tonight.

SHORT TERM TRADER:  Short at 2795; stop above 2880.  Target 2600.

POSITION TAKER:   Short at 2805; stop above 2900.  Target 2555.

 

BRITISH POUND/US DOLLAR

One Brexit comment after another, and the clock counts down.

SHORT TERM TRADER:  Reluctantly stopped myself out of my long position despite the market sitting on a support level.

POSITION TAKER:  Square.

 

EURO/US DOLLAR

Almost oversold and sitting between retracement levels yet somehow cannot seem to get any traction.  Very frustrating.

SHORT TERM TRADER:  Square.

POSITION TAKER:  Square.

 

GOLD

Oversold as we drop for a fourth consecutive week.  Managing to hold above the 1200 watershed level though, so might try and hold above here again this week.   

SHORT TERM TRADER:  Square.

POSITION TAKER:  Short at 1242; stop above 1240.  Target 1140.

 

Nicole Elliott is a long-standing member and Fellow 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.