Minutes published yesterday of the September 25-26 rate-setting meeting (where they raised the Fed Funds target by 25 basis points) noted: ‘’participants generally anticipated that further gradual increases in the target range of the federal funds rate would most likely be consistent with a sustained economic expansion, strong labour market conditions, and inflation near 2 per cent over the medium term’’. CNBC reports that ‘members said there might be a period where the Fed even will need to go beyond normalisation of rates and into a more restrictive stance’.
Reuters reports today that Spanish bank Santander is suspected by German authorities of having ‘planned and executed [share] trades’ that facilitated ‘severe tax evasion’ between 2007 and 2011. They are not alone in what is believed to be Germany’s biggest post-war fraud investigation; Australia’s Macquarie Bank and Deutsche Bank are also part of the investigation.
DAX 30
Retreating from the top of the inverted flag formation, holding at first Fibonacci retracement resistance, thus keeping momentum steadily bearish.
SHORT TERM TRADER: Square.
POSITION TAKER: Short at 12100; stop above 12000. Target 11200, the half-way mark of the rally that started late in 2016 and maybe 10700.
FTSE 100
Stuck inside the inverted pennant/flag chart pattern and momentum is clearly bearish.
SHORT TERM TRADER: Short at 7025; stop above 7200. Target 6400.
POSITION TAKER: Square but looking to re-sell.
S&P 500
Momentum’s less bearish and yesterday’s hanging man type candle might end up lying at the centre of a three-candle evening star chart pattern.
SHORT TERM TRADER: Short at 2755; stop above 2825. Target 2600.
POSITION TAKER: Short at 2770; stop well above 2825. Target 2600.
BRITISH POUND/US DOLLAR
Bullish momentum slipping away as we struggle with immediate trend line resistance. You might be pleased to hear that in a report published yesterday the US Treasury said it had found that no trading partner was a currency manipulator but it had decided to keep China, Germany, India, Japan, South Korea and Switzerland on a watch list.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Why do I bother? This currency pair has been ghastly all year.
SHORT TERM TRADER: Stopped out of my little long - again.
POSITION TAKER: Square.
GOLD
Stalling at the 50 per cent retracement level of the most recent leg lower of this year’s decline and the commodity channel index looks set to turn down. Several media sources report that Hungarian gold bullion holdings increased 10-fold to 31.5 tons, 4.4 per cent of reserves and in line with other Eastern European nations.
SHORT TERM TRADER: Looking to re-sell against 1235.
POSITION TAKER: Square.
