February trade data published in China this morning show that the trade surplus collapsed from 271 billion yuan to just 34 billion; this is linked to seasonality around the Lunar New Year holiday. Imports dropped by 5.2 per cent, following January’s 1.5 per cent decline, while on an annualised basis exports fell by 20.7 per cent; this is almost as bad as the record 26.4 per cent slump in 2009.
US credit card debt set a new record high at $869 billion in Q4 2018; this is 6.9 per cent higher than the previous record in Q3 2008. The number of cards in circulation is roughly 480 million – 1.47 per citizen and a lot higher than the 100 million in 2008. More worrying is that 37 million Americans have cards that are 90 days past due with the amount outstanding $68 billion. At the end of last year total US household debt was also at a record high $13.54 trillion, according to the Fed’s data.
DAX 30
No longer overbought as we reverse last week’s gains.
SHORT TERM TRADER: Short at 11600; stop well above 11800. First target 10800.
POSITION TAKER: Will sell on a close below 11400 today.
FTSE 100
Momentum’s still bearish and the potential interim head & shoulders top that’s been building for a month looks a little more convincing.
SHORT TERM TRADER: Small short at 7120; stop above 7275. Target 6800.
POSITION TAKER: Will add to my short position on a close clearly below 7100; stop above 7275. Target 6700.
S&P 500
Retreating for a potential 5th consecutive day, reversing price action of the previous fortnight. Momentum has just turned a little bearish and we are retreating from an area that capped in early 2018 and again in Q4 2018.
SHORT TERM TRADER: Short at 2775 and will add to this on a weekly close below 2700; stop a bit above 2820. Target 2600.
POSITION TAKER: Short at 2795; stop above 2850. Target 2600.
BRITISH POUND/US DOLLAR
Clearly back under what had been trend line resistance and the MACD might turn decidedly bearish. Suggest avoiding cable over this weekend.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Oversold as it trades at its weakest against the US dollar since June 2017. Caused by the ECB’s moves we had warned about. Not only will they be implementing TLTRO version III, but since December’s GDP forecast for 1.8 per cent growth this year they have almost halved that to 1.1 per cent. Mario Draghi added that rates will remain accommodative ‘’for as long as necessary [and] today’s decisions will support the further build-up of domestic price pressures’’.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Holding support at this year’s low around 1280 so that momentum’s a little less bearish.
SHORT TERM TRADER: Square.
POSITION TAKER: Short at 1328; stop above 1326. Target 1255.
