Market Outlook: "Don’t say we didn’t warn you’"

Today the UK’s Citizens Advice Bureau published a year-long inquiry into the way regulators set the price British consumers pay for utilities. They suggest that over the last 15 years citizens have been overcharged by £24bn, errors always coming out in favour of the providers rather than the end-users. Key in this issue is the cost of capital which, since the financial crisis, has been persistently lower than their formulae use. Ofwat says it has made adjustments, Ofgem does not agree with their findings.

DAX 30

Momentum turned bearish on yesterday’s close below the trend line but above the neckline of a potential head-and-shoulders top that was pointed out to me by another technical analyst.

SHORT TERM TRADER: New short at 11870; stop above 12200. Target 11325.

POSITION TAKER:  Square.

FTSE 100

Retesting last week’s lows and momentum has turned bearish here too.

SHORT TERM TRADER:   Square.

POSITION TAKER:  Short at 7275; stop above 7350. Target 6875.

S&P 500

Momentum is clearly bearish and investors are buying bonds.

SHORT TERM TRADER:  Short at 2880; stop above 2850. Target 2720.

POSITION TAKER:   Short at 2866; stop above 2900. Target 2740.

BRITISH POUND/US DOLLAR

Still oversold as we re-test recent lows.

SHORT TERM TRADER:  Small long at 1.2675; stop well below 1.2600. Target 1.2925.

POSITION TAKER:  Square.

EURO/US DOLLAR

Almost oversold as we test this year’s lows. Yesterday the ECB published its financial stability report where it noted that weak economic growth might cause a drop in asset prices and an increase in the cost of borrowing among indebted countries, a combination that posed a major threat to the zone’s financial stability.

SHORT TERM TRADER:  Long at 1.1195; stop below 1.1100. Target 1.1400.

POSITION TAKER:  Square.

GOLD

Retreating from trend line resistance and sitting on trend line support; something has to give soon.

SHORT TERM TRADER:  Square.

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.