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Market Outlook: Swedish PM ousted

Vote of no confidence
September 26, 2018

As mandated, the 349 members of Sweden’s parliament voted 204 against to 142 in favour of PM Stefan Lofven keeping his position.  September’s general election produced a hung parliament with both the ruling centre-left and right parties, that have controlled the country for a century, losing a vast amount of ground.  Mr Lofven had refused to work with the rising Sweden Democrats, who in turn had backed the centre-right Alliance.  Another election is a possibility if ongoing talks fail to form a coalition government.

Rumour has it that today the people who decide on FTSE Russell indices are likely to include China A shares in global benchmarks; this follows MSCI’s move earlier this year.  Some estimates put the benefit to China at $15 billion, in that index-trackers would have to buy mainland shares.

DAX 30

Dithering under the trend line while the commodity channel index has yet to turn bearish.  Bloomberg reports that German Chancellor Angela Merkel was weakened further yesterday in a surprise move where her choice of caucus leader was defeated by lawmakers.

 

SHORT TERM TRADER:  Short at 12330; stop above 12460.  First target 11900.

 

POSITION TAKER:  Square.

FTSE 100

Hovering at the 50 per cent retracement level and the commodity channel index has yet to turn bearish.

 

SHORT TERM TRADER:   Will sell if the commodity channel index turns down tonight.

 

POSITION TAKER:  Short at an average above 7300; stop above 7535.  Target 6925.

S&P 500

The MACD still looks unconvincing as this market has stopped ahead of today’s FOMC meeting.  Many are expecting another 25-basis point rise taking the Fed Funds target to 2.25 per cent.  Also, watch the press conference and Chair Jerome Powell’ speech.

 

SHORT TERM TRADER:  Square

 

POSITION TAKER:   Square.

BRITISH POUND/US DOLLAR

Using the old trend line as support cable’s rallied a little bit more, despite French finance minister Bruno Le Maire weighing in on Brexit saying Mrs May’s Chequers plan ‘’doesn’t add up’’ and that, ‘’sorry, to put it bluntly but what is more important for us than the future of the UK is the future of Europe’’.

 

SHORT TERM TRADER:  Long at 1.3105; stop below 1.3000.  Target 1.3300.

 

POSITION TAKER:  Long at 1.3110; stop below 1.3000.  Target 1.3600, maybe more.

EURO/US DOLLAR

Maintaining bullish momentum as we grapple with resistance around 1.1800. 

 

SHORT TERM TRADER:  Long at 1.1780; stop below 1.1600.  Target 1.2000.

 

POSITION TAKER:  Square.

GOLD

Drifting sideways through long term trend line resistance in a largely irrelevant move.   

                            

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Short at 1194; stop above 1215.  First target 1160.

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.