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Market Outlook: German December dire

Factory orders slump
February 6, 2019

After weak January services purchasing managers survey data yesterday (both France and Italy’s readings were below 50), this morning we see that German factory orders fell 1.6 per cent in the month of December taking the annualised decline to 7.0 per cent. This is the second biggest fall in the last 9 years and comes as another blow following awful retail sales over Christmas.

City AM reveals that experts at the London Stock Exchange estimated that 230,000 UK financial jobs were at risk following the referendum on Brexit. Subsequently HR consultants Oliver Wyman said 75,000 City jobs would go abroad on leaving the EU. A Reuters survey of the 132 biggest and most internationally focused finance firms in September 2017 suggested 10,000 jobs would go. A year on that number was revised down to 5,766. The latest version of this same survey has seen the number trimmed to 2,000. Yet another example of ‘expert’ opinion’s forecasts being wrong and revised towards reality.

DAX 30

Really not going according to plan as we retrace just over 50 per cent from October’s high.

 

SHORT TERM TRADER: Small short at 11180; stop above 11400. First target 10600.

 

POSITION TAKER:  Square.

FTSE 100

Bursting higher, on good bullish momentum, as we retrace a Fibonacci 61 per cent from October’s high.

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Square.

S&P 500

Overbought after another nasty little rally.

 

SHORT TERM TRADER:  Another small loss as I was stopped out of my short position.

 

POSITION TAKER:   Square.

BRITISH POUND/US DOLLAR

Retracing a Fibonacci 38 per cent of the most recent rally. This morning the Financial Times reports that ‘Brussels seeks to appear accommodating while stepping up preparations for UK crashing out’, adding that ‘the political blame game has started over responsibility for a chaotic no-deal exit’.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Cut myself out for a small profit on yesterday’s drop below 1.3000.

EURO/US DOLLAR

Divergence as Chaikin’s oscillator approaches a previous buying area yet the exchange rate is exactly in the middle of the 1.1300 to 1.1500 band.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

GOLD

Bullish momentum’s holding and so is the price.

                            

SHORT TERM TRADER:  Small short at 1317; stop above 1330. 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.