Thanks to income tax receipts, especially from the self-employed, the government posted a surplus of £2 billion in July, double what it was at this point last year. This means that the overall budget deficit for this financial year stands at £12.8 billion, down 40 per cent on this time last year and the lowest since 2002. For the financial year ending March 2018 the deficit was £39.4 billion, down £6.4 billion on the previous year and almost £6 billion below estimates from the Office for Budget Responsibility.
Yesterday the US S&P 500 index inched to a new record high at 2873.23, with a bull market that is now 3453 days old today. This equals the rally we saw from October 1990 to March 2000 which thus far has been the longest in history.
DAX 30
A little shooting star candle yesterday is balanced by the MACD which is a lot less bearish. German foreign minister Heiko Maas wrote in daily Handelsblatt that Europe should not allow the US to act ‘’over our heads at our expense. For that reason, it’s essential that we strengthen European autonomy by establishing payment channels that are independent of the US, creating a European Monetary Fund and building up an independent SWIFT [payment] system’’.
SHORT TERM TRADER: Short at 12635; stop above 12650. Target 12200.
POSITION TAKER: Square.
FTSE 100
The MACD is still bearish and yesterday’s small bearish engulfing candle hints that a new interim high around 7600 might be in place.
SHORT TERM TRADER: Square.
POSITION TAKER: Small short at 7799; stop well above 7800. First target 7400, then 7100.
S&P 500
Not quite front page news, but newsworthy, as the index inches to a new record high and the media’s counting the days to the longest bull market ever. Slightly worrying for them might be yesterday’s shooting star little candle and the divergence with a descending RSI.
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
Momentum might turn bullish today, boosted by the decent rally yesterday after the break above 1.2800.
SHORT TERM TRADER: Small long at 1.2740; stop below 1.2650. Target 1.3000.
POSITION TAKER: Square.
EURO/US DOLLAR
Managing to close yesterday just inside the lower edge of the symmetrical triangle that had dominated since May. Momentum has yet to turn bullish and we might see better volume as the US dollar looks set to become more of a two-way street. Reuters data published yesterday shows that London dominated the FX market again in 2017, up 23 per cent from last year with average daily volume $2.7 trillion daily, more than double its next rival, New York.
SHORT TERM TRADER: Turn up for the books as I booked a nice quick profit on my long position. Now will think where to re-buy.
POSITION TAKER: Square.
GOLD
Not quite sure from where to start drawing my Fibonacci retracements but trying to get an idea of where to go short again.
SHORT TERM TRADER: Square.
POSITION TAKER: Short at 1242; stop above 1200. Target 1140.
