Released early this morning Germany’s July trade surplus dropped to €15.5 billion from €19.3 billion in June, the smallest in four years, caused by exports which dropped by 0.9 percent and imports which surged 2.8 per cent; the current account surplus sagged by a staggering 41 per cent (from €26.2 billion to €15.3 billion). Simultaneously industrial production dropped by 1.1 per cent on the month taking the annualised rate of growth to 1.1 per cent (lowest since February last year).
We knew that Brazil’s presidential election was wide open, the most popular candidate, the PT’s Lula, behind bars. Yesterday the man in second place, far-right candidate Jair Bolsonaro (AKA Brazil’s Donald Trump) out campaigning on the streets of Juiz de Fora was stabbed. Rushed to hospital his son and campaign manager said he had undergone surgery for serious wounds.
DAX 30
Dipping a little again yesterday and closing just a fraction below the important 12000 level. Remember that key secular support lies between 12000 and 11600; the closer we get, the faster the moves will probably become.
SHORT TERM TRADER: Will re-sell on a weekly close clearly below 12000.
POSITION TAKER: Am considering a key short position.
FTSE 100
Another European index dipping a little further, and more importantly spending all day yesterday below 7400 and below the bottom of the broad trend channel.
SHORT TERM TRADER: Took some more profits late yesterday just ahead of my initial target at 7300.
POSITION TAKER: Short with an original target at 7100; stop above 7535. Might add to this position on a close below 7400 today.
S&P 500
Slipping another little notch, rather like the cogs in a funicular railway. We’ll probably spend the bulk of the day at current levels as we wait for August’s US employment data. Why people still think it’s crucial is anyone’s guess; habit, probably.
SHORT TERM TRADER: Square
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Consolidating in a tiny symmetrical triangle just under first Fibonacci retracement resistance at 1.3070. An interim low just under 1.2800 might be in place based and a weekly close clearly above 1.3000 should increase positive momentum.
SHORT TERM TRADER: Small long at 1.2925; stop below 1.2780. Target 1.3275.
POSITION TAKER: Might go long on a close above 1.3000 today.
EURO/US DOLLAR
Today we have redrawn the top of the triangle to take in the interim highs (sorry about incorrect chart yesterday). Not too shoddy as the euro consolidates quite happily above 1.1600.
SHORT TERM TRADER: Square.
POSITION TAKER: Long at 1.1595; stop below 1.1530. Target 1.1785.
GOLD
Holding at current levels though platinum, and especially silver charts, look very bearish.
SHORT TERM TRADER: Short at 1195; stop above 1220. First target 1160.
POSITION TAKER: Square.
