Published today in the Financial Times, in an interview ex-Fed chief Janet Yellen notes: ‘’I am worried about the systemic risks associated with these [leveraged] loans. There has been a huge deterioration in standards; covenants have been loosened in leveraged lending. There are a lot of weaknesses in the system, and instead of looking to remedy those weaknesses I feel things have turned in a very deregulatory direction’’. Keep an eye on Bank OZK, formerly known as Bank of the Ozarks based in Little Rock, Arkansas, whose share price has halved since the beginning of this month. Some are suggesting it might be this decade’s Countrywide.
Crude pipe bomb explosive devices have been sent to several prominent US Democrat politicians, including ex-head of state Barak Obama and Hillary Clinton. The New York head office of CNN had to be evacuated, with President Trump retorting that the media should be more careful as to how it words things.
DAX 30
Selling off a little more in line with many other global indices. Poor Q3 2018 figures from Daimler and a second profit warning this year underline the struggle the auto industry is facing.
SHORT TERM TRADER: Square and will re-sell on a weak weekly close.
POSITION TAKER: Short; stop above 11750. Next target at 10700.
FTSE 100
Surprisingly holding up better than some of its European counterparts where the ECB meets today. Keeping rates on hold is a given but one wonders whether Mario Draghi might have anything to say on Italian government finances.
SHORT TERM TRADER: Short at 7025; stop above 7125. Target 6400.
POSITION TAKER: Short at 7075; stop above 7125. First target 6800.
S&P 500
Passive perma-bulls might have sat up to take note but I get the feeling they haven’t taken steps to outline strategy, let alone adjust positions. Several US indices have given up all this year’s gains, where US outperformance had been widely trumpeted (including by the President himself).
SHORT TERM TRADER: Short above 2740; stop above 2740. Target 2600.
POSITION TAKER: Short at 2770; stop well above 2780. Target 2600.
BRITISH POUND/US DOLLAR
Survived another day of Brexit skirmish as prices hover at Fibonacci 61 per cent retracement support.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Drifting again towards this year’s lowest level at 1.1300. Not that surprising.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Palladium in a world of its own as it rallies to a new record high. Other precious metals have different dynamics.
SHORT TERM TRADER: Tiny short at 1227; stop above 1240. Target 1190.
POSITION TAKER: Square.
