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Market Outlook: PPI strikes yet again

Yesterday at CYBG
November 21, 2018

City AM reports that the owner of Clydesdale Bank, the hideously named CYBG, saw negative returns on £145 million in full-year results. This was mainly because it had to set aside £352 million for losses related to PPI claims. Otherwise all areas of business had seen small but steady improvements to volume and profitability. Its shares lost over 16 per cent yesterday to trade at 206.4 pence.

Note: The Trader is off for a long weekend. Therefore, there will be no daily newsletter on Thursday 22nd and Friday 23rd November. Back to normal again on Monday 26th. Wishing US readers a Happy Thanksgiving.

DAX 30

Bearish momentum increasing as we dip to a new recent low and the lowest point since early December 2016. So much for a store of value but pity Deutsche Bank who, now linked to the Danske Bank scandal, saw its share price drop to a new record low of €8.10.

 

SHORT TERM TRADER: Short at 11200; stop above 11425. Target 10400.

 

POSITION TAKER:  Short; stop above 11600. Next target at 10700.

FTSE 100

Bearish momentum increasing slightly as we re-test October lows, an area first tested in March this year. Weekly and monthly closes below 6900 (roughly) would complete a massive broadening top chart pattern that has been building since the start of 2017.

 

SHORT TERM TRADER:   Short at 7080; stop above 7120.  First target 6865.

 

POSITION TAKER:  Took profits at my first target at 6900. Will re-sell depending on where we settle this month (and maybe this Friday).

S&P 500

Shaking one’s head and calling it carnage isn’t going to sort anything, nor brush it away. Having a clear plan, preferably in writing, is a good idea. Bearish momentum increased significantly as we tested trend line support from the 2016 low. A weekly close below this line should add to downside pressure. Remember that tomorrow is US Thanksgiving and the following day is the dreaded Black Friday.

 

SHORT TERM TRADER:  Took profits at target 2630 and will consider where to re-sell.

 

POSITION TAKER:   Will sell on a close below trend line support and below 2600.

BRITISH POUND/US DOLLAR

Hovering around 1.2800 as Theresa May’s off to Brussels again today.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

The MACD holding steady despite yesterday’s sudden set-back. The Financial Times reports that yesterday’s attempt by the Italian authorities to sell government bonds to domestic retail savers got off to a slow start; by midday they had sold €650 million. The first time they sold the BTP-Italia in May, 4-year paper with a 1.45 per cent coupon, they raised €2.3 billion.

 

SHORT TERM TRADER:  Small long at 1.1345; stop below 1.1300. Target 1.1500.

 

POSITION TAKER:  Long at 1.1420; stop below 1.1300. Target 1.1700.

GOLD

Little to go on in this dreary chart; a bit like cable. Data yesterday from the London Bullion Market Association put the City in number 2 slot after New York in terms of volume of gold traded. At 30.2 million ounces daily, versus the US’s 34 ounces. The move is an attempt at increasing transparency in all precious metals and data will be published on a regular basis.

                            

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

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.