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Market Outlook: Taiwan shock in local elections

Ruling party support collapses
November 26, 2018

On Saturday, the independence-leaning party of President Tsai Ing-wen, the Democratic Progressive Party, suffered a crushing defeat. The vote was seen as an early referendum on the path currently taken as mainland China puts the island state under increasing pressure. Shortly after the results came in the President resigned as head of the party though she will remain as President, CNBC reports.

City AM reports this morning that a recent report from Transparency International UK rates three quarters of firms as poor to very poor in terms of disclosing political engagement. Of the 104 top global firms surveyed, nearly all failed to disclose controls on revolving door policies and 4 in 5 had poor standards when it comes to detailing lobbying efforts. Only one got the overall top A grade, GlaxoSmithKline.

DAX 30

Bouncing from last week’s low, this year’s lowest point, but nevertheless settling below trend line support taken from 2012’s low. Note the we have spent the last six consecutive weeks consolidating below the neckline of a massive head & shoulders top; the chance of scrambling above here as we approach year-end recedes in December.

 

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

 

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

FTSE 100

Crushingly boring as we hover around the psychological 7000 Brexit od no Brexit. We understand that all 27 EU leaders signed yesterday’s agreement in a matter of seconds and while some were diplomatic, France’s Macron suggested the UK would stay in the customs union unless he gets a deal on fishing – perhaps to distract from the lengthy and widespread protests on roads everywhere.

 

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

 

POSITION TAKER:  Square.

S&P 500

The first weekly close below trend line support from the 2016 low ought to add further downside pressure. The Mexican border town of Tijuana is groaning under the pressure from hundreds of ‘caravan’ migrants from Central America. The city declares it a humanitarian crisis and asks the UN for help.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:   New short at 2630 because of the close below trend line support; stop above 2745. Target 2535.

BRITISH POUND/US DOLLAR

 

Holding, through thick and thin, above this year’s low.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Dead boring. Now we’ll have a fortnight or so to see how MPs will vote on the Brexit agreement.

 

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

Can’t really make a case for being either bullish or bearish at the moment.

                            

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.