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Market Outlook: Eurozone slows suddenly

Blame it on the Germans
January 15, 2019

Data published by Eurostat yesterday showed that during November industrial production fell by 1.7 per cent over the month, the third biggest fall ever and a real outlier (Feb 2016 saw a 2.1 per cent fall and Dec 2008 -3.7 per cent). The biggest loser was Ireland at -7.5 per cent, followed by Portugal -2.5 per cent, the Germany (the block’s biggest economy) and Lithuania off 1.9 per cent. Production fell across all categories: capital goods, durable and non-durable consumer goods, energy and intermediate goods. With very heavy snow, the threat of rooves collapsing and avalanches this month in much of central Europe, another slow-down is possible.

Denying she had her eye on the vacancy as the head of the World Bank, the White House has said that the President’s daughter, Ivanka Trump, will lead the search for a replacement following the sudden resignation of Jim Yong Kim. This follows Friday’s report by the Financial Times that her name had been floated in Washington.

DAX 30

Momentum isn’t all it might be as we hover just under the long term trend line.

 

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

In case you’ve been holed up in a bunker – and I wish I’d taken cover months ago, thus avoiding the endless speculation and drivel – this evening we have an important vote on part of a Brexit deal; the journos have been camping in tents on the square outside since before 6 am today. Stock market cool as a cucumber. 

 

SHORT TERM TRADER:   Short at 6905; stop above 7045. First target 6600.

 

POSITION TAKER:  Short at 6895; stop above 7045. First target 6600.

S&P 500

Suddenly stopped at a sort of watershed level and bullish momentum has, unsurprisingly eased.

 

SHORT TERM TRADER:  Short at an average of 2535; stop well above 2625. Target 2200.

 

POSITION TAKER:   Short at 2485; stop above 2625. Target 2075.

BRITISH POUND/US DOLLAR

Consensus opinion has been against sterling for too many moons. Now add to that the consensus on Theresa May suffering a catastrophic defeat today. Add the two together and you’ll know where the element of surprise might come from and which way is the line of least resistance.

 

SHORT TERM TRADER:  Took profits at my original target at 1.2900 and feeling rather pleased with myself.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Bullish momentum just isn’t there, is it?

 

SHORT TERM TRADER:  Long at 1.1510; stop below 1.1350. Target 1.1750.

 

POSITION TAKER:  Square.

GOLD

Bullish momentum has really evaporated this year.

                            

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

 

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.