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Market Outlook: Yesterday factory orders

Today Germany’s hit to industrial production
January 8, 2019

Data out this morning show a surprise collapse in November German industrial production, off 1.9 per cent on the month, and third consecutive fall, taking the annualised rate of decline to 4.7 per cent. The bulk of the damage was done by a 4.1 per cent fall in consumer goods, a 3.1 per cent drop in energy production, and a 1.7 per cent fall in construction products. Summed up nicely by Claus Vistesen of Pantheon Macroeconomics: ‘’Berlin, we have a problem’’.

South-Korean born former doctor Jim Yong Kim resigned suddenly yesterday afternoon as head of the World Bank; he leaves within a month. Scant details were for his decision were given, though the organisation said he ‘will join a firm and focus on infrastructure investments in developing countries’.

DAX 30

The commodity channel index turned down on yesterday’s close as we consolidate around December’s levels.

 

SHORT TERM TRADER: Short at 10445; stop above 11000. Target 9300.

 

POSITION TAKER:  New short at 10745; stop well above 11000. First target 10200 and probably 9250.

FTSE 100

Not oversold as we were at year-end while still just about holding above the bottom of the massive broadening top chart pattern. 

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Short at 6770; stop well above 6900. Target 6200.

S&P 500

Watching for another interim high to form around the Fibonacci 38 per cent retracement of Q4’s collapse.

 

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

Capped again yesterday by trend line resistance and the 50 per cent retracement level. Let’s see if bullish momentum can kick in a bit more strongly.

 

SHORT TERM TRADER:  Long at 1.2660; stop below 1.2475. Target 1.2900.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Closing above trend line resistance but still struggling with the 1.1500 level as it has done for two months.

 

SHORT TERM TRADER:  Long at 1.1415; stop below 1.1300. Target 1.1500.

 

POSITION TAKER:  Square.

GOLD

Friday’s bearish engulfing candle and yesterday’s small shooting star have seen bullish momentum drop very significantly.

                            

SHORT TERM TRADER:  Short at 1292; stop well above 1300. First target 1240.

 

POSITION TAKER:  Square.