Data out this morning show that consumer prices in Switzerland fell 0.3 per cent during the month of December, one of the biggest M/M falls of the last 3 years, dragging the annualised rate down to just a 0.7 per cent increase. This suggests price rises peaked at 1.2 per cent in August, a level that has capped most of the time since 2009. Worth noting also that since 1994 Swiss CPI has printed over 2 per cent only briefly in 2008.
Australia, which prides itself in not having suffered a recession in something like 30 years, overnight published some rather scary data on building approvals. These fell 9.1 per cent in November meaning the annualised rate was a collapse of 32.8 per cent – almost as big a drop as January 2009’s 34.4 per cent fall and close to the record 43.6 per cent slump in February 2001. Unsurprisingly house prices around the country have already been falling at the fastest pace in 35 years, Sydney – as one would expect – leading with a 15 per cent fall followed by Melbourne’s 12 per cent reduction.
DAX 30
Though the commodity channel index didn’t turn down yesterday we’re still trading under the trend line from 2009’s low and well under the horizontal neckline of the massive head & shoulders top.
SHORT TERM TRADER: Short at 10445; stop above 11050. Target 9300.
POSITION TAKER: Short at 10745; stop well above 11050. First target 10200 and probably 9250.
FTSE 100
While holding above the bottom of the massive broadening top chart pattern bullish momentum has not been maintained this morning with the blip above 6900 looking like a false break and potential shooting star.
SHORT TERM TRADER: New short at 6905; stop above 7040. First target 6600.
POSITION TAKER: Short at 6770; stop above 6950. 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
Do not confuse observed with implied volatility. The former is very much lower than the latter meaning that the cost of insuring against an adverse market move is very expensive indeed.
SHORT TERM TRADER: Long at 1.2660; stop below 1.2475. Target 1.2900.
POSITION TAKER: Square.
EURO/US DOLLAR
Holding neatly above trend line resistance and 1.1500 as bullish momentum increases. Note that as French PM Edouard Philippe ponders a draconian response to clamp down on ‘gilet jaunes’ protests, the spread between French and German sovereign debt yields is at its widest in many months.
SHORT TERM TRADER: Long at 1.1415; stop well below 1.1400. Target 1.1500.
POSITION TAKER: Square.
GOLD
Looking more like a small interim top as bullish momentum dries up.
SHORT TERM TRADER: Short at 1292; stop well above 1300. First target 1240.
POSITION TAKER: Square.
