With most returning from New Year celebrations, though not New Zealanders and Scotland who are off on holiday again today and the Japanese who only get back on Friday, Asian stock markets traded down today in reaction to Monday’s Chinese December Manufacturing Purchasing Managers’ Index which dipped to 49.4, the first reading below the 50 watershed since January 2016. Hardest hit has been Hong Kong where the Hang Seng lost 2.9 per cent (at the time of writing).
CNBC reports today that Italian market regulator Consob today suspended trading in the shares of troubled bank Carige. This is because we are expecting a statement on the bank’s governance after it failed to raise another €400 million from existing shareholders. The Genoa-based bank, and Italy’s 10th biggest, has been teetering on the edge with shares trading at a fraction of a cent of a euro.
DAX 30
As is plain to see the second half of last year was not kind to Germany’s key shares. They have broken trend line support and retraced a Fibonacci 38 per cent of the rally since the last Eurozone banking crisis in 2011/2012.They have met the first target from the large head & shoulders top that had been building since the beginning of 2017. With banking woes looming again, the prognosis is not bullish.
SHORT TERM TRADER: New short at 10445; stop above 11000. Target 9300.
POSITION TAKER: Square.
FTSE 100
Held long term trend line support in December but looking set to retrace a Fibonacci 38 per cent of the decade-long rally.
SHORT TERM TRADER: Short at 6645; stop well above 6800. Target 6250.
POSITION TAKER: Short at 6770; stop well above 6900. Target 6200.
S&P 500
December’s collapse was exacerbated by thin markets and trouble in Trump’s entourage. The closing of Federal government because of a budget tussle with Democrats hasn’t helped either.
SHORT TERM TRADER: Short at 2500; stop well above 2625. Target 2200.
POSITION TAKER: Short at 2485; stop above 2625. Target 2075.
BRITISH POUND/US DOLLAR
Limping along in a pre-Brexit world where not only is starling the world’s most hated currency but so too is the FTSE 100 index.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Trying to rally off long term Fibonacci retracement support.
SHORT TERM TRADER: Long at 1.1395; stop below 1.1350. Target 1.1585.
POSITION TAKER: Square.
GOLD
Recovering to the half-way point of last year’s range.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
