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Market Outlook: Australian house prices catch up with reality

Biggest slump in current methodology
March 19, 2019

Data published this morning show that in Q4 2018 Australian house prices across the nation fell by 2.4 per cent Q/Q for a record annualised decline of 5.1 per cent (with data since 2004). The drop is equivalent to AU$133.1 billion and makes the chance of any rate rise in the Cash Rate from the current record low 1.5 per cent unlikely. Sydney has taken the biggest hit with real (adjusted for inflation) house price falls since the June 2017 peak of 16 per cent.  

This week Italy is expected to be the first G7 country to sign a non-binding Memorandum of Understanding with China’s $900 billion new Silk Belt & Road plan, said Michele Geraci, undersecretary of state for economic development. This aims to extend Chinese influence through Asia into Europe and Africa. Despite European Union misgivings, Palermo looks set to be an important port on the route. President Xi is due a visit to Rome next week.

DAX 30

An indecisive doji yesterday on fading bullish momentum hints that this year’s corrective rally might be coming to an end.

 

SHORT TERM TRADER: Short at 11600; stop well above 11800. First target 10800.

 

POSITION TAKER:  Square.

FTSE 100

Overbought again as the British political establishment descends even further into farce.

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Square.

S&P 500

Almost overbought as we inch up to a new high for this year, just above where we were early December.

 

SHORT TERM TRADER:  Stopped out for a small loss on yesterday’s close.

 

POSITION TAKER:   Stopped out for a tiny loss.

BRITISH POUND/US DOLLAR

Momentum is barely bullish but hopefully yesterday’s hammer might see it increase a tad. Meanwhile sterling is making a mockery of all too many money managers’ so-called carefully laid plans.

 

SHORT TERM TRADER:  Long at 1.3290; stop well below 1.3200. Target 1.3600.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

Momentum looks set to turn bullish at last as the euro slowly scrapes itself off this year’s lows.

 

SHORT TERM TRADER:  Tiny long at 1.1284; stop below 1.1290. Target 1.1460.

 

POSITION TAKER:  Square.

GOLD

MACD is a mess as the gold price lags so far behind palladium ($1375 and up 26.8 per cent so far this year).

                            

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Short at 1328; stop above 1320. Target 1255.

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.