Join our community of smart investors

Market Outlook: China data slows

Manufacturing and exports lower
October 1, 2018

Survey data from the Chinese mainland over the weekend showed that factory output slowed for the first time in 15 months and that export orders were at their lowest in 2 years.  The Caixin/Markit Manufacturing Purchasing Managers’ Index dropped to 50.0 in September from 50.6 in August, more than polls had predicted.

The Financial Times reports this morning that for the first time since the great financial crisis US applications to sit the entrance exam for an MBA degree had fallen.  This year demand for business masters degrees is off by 7 per cent – and has been declining for 5 consecutive years – but the slack in local demand had been offset by Asian students.  GMAC surveyed 1087 graduate courses at 363 universities in 44 countries.

DAX 30

The series of descending highs since Mat is intact and the weekly MACD decidedly bearish.  Automakers around the world have recently been reminded that just-in-time manufacturing systems are highly vulnerable to global trade disruptions.

 

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

 

POSITION TAKER:  Square.

FTSE 100

Retreating from 50 per cent retracement resistance at the end of last week, keeping momentum bearish.

 

SHORT TERM TRADER:   Square.

 

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

S&P 500

Overbought again as we hover very close to the record high.

 

SHORT TERM TRADER:  Square

 

POSITION TAKER:   Square.

BRITISH POUND/US DOLLAR

A second consecutive shooting star weekly candle around long term trend line support is worrying, yet the MACD is mixed at best.  Some analysts suggesting cable should be used as a barometer for Mrs May’s ratings.

 

SHORT TERM TRADER:  Stopped out of my long position on Friday’s drop below 1.3050, incurring a small loss.

 

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

EURO/US DOLLAR

A small bearish engulfing candle putting the market back in the middle of the 1.1500 to 1.1800 range that has held most of the time since late May. 

 

SHORT TERM TRADER:  Stopped out of my long here too for a stupid loss.

 

POSITION TAKER:  Square.

GOLD

Clinging to the pivotal chart level at 1180 and holding at the very bottom of this year’s range; momentum is clearly bearish.   

                            

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Short at 1194; stop above 1218.  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.