CNBC reports that yesterday Chinese Premier Li Keqiang announced stimulus measures worth nearly $300 billion because economic growth has slowed and might even drop to 2 per cent. The authorities have also lowered their GDP growth forecast to between 6 and 6.5 per cent for this year. Domestic industries should be the biggest beneficiaries of this largesse and any growing discontent among the middle class is hoped to be quashed.
Australian Q4 2018 GDP missed expectations by growing just 0.2 per cent versus Q3’s 0.3 per cent, taking the annual rate of economic expansion to 2.3 per cent from 2.8 per cent in the previous quarter; consumer spending and construction were largely to blame. The data flies in the face of Reserve Bank of Australia’s forecast of 3 per cent GDP growth this year – the 27th consecutive year the country has been recession-free.
DAX 30
Monday’s drop almost engulfed Friday’s rally in what had been an overbought market. Occurring around the Fibonacci 61 per cent retracement level and the neckline of the giant head and shoulders pattern that’s been building for years, hints we may have found an interim top in the 11th week since December’s low.
SHORT TERM TRADER: New short at 11600; stop well above 11800. First target 10800.
POSITION TAKER: Square.
FTSE 100
Holding up surprisingly well considering momentum’s still bearish.
SHORT TERM TRADER: Small short at 7120; stop above 7275. Target 6800.
POSITION TAKER: Short at 7105; stop above 7275. Target 6700.
S&P 500
Nothing surprising in an overbought market that suddenly slips on Monday from known resistance.
SHORT TERM TRADER: Short at 2775; stop a bit above 2820. Target 2600.
POSITION TAKER: Short at 2795; stop above 2875. Target 2600.
BRITISH POUND/US DOLLAR
No longer overbought as we slip back below what had been trend line resistance.
SHORT TERM TRADER: Stopped myself out for a small loss on yesterday’s drop below 1.3175.
POSITION TAKER: Square.
EURO/US DOLLAR
Retreating this week, possibly as a response to President Macron’s vision for an ‘EU renaissance’ and further integration – where the answer from several parts of the British press has been merci Macron because it reminds Brexiteers why they voted and remainers why the EU needs Britain.
SHORT TERM TRADER: Cut myself out of long position at a small profit.
POSITION TAKER: Square.
GOLD
Bearish momentum surging as we move back inside the old trend channel.
SHORT TERM TRADER: Took a neat little profit at 1300.
POSITION TAKER: Short at 1328; stop above 1326. Target 1255.
