In a highly unusual move the Chinese embassy called a press conference in London yesterday where ambassador Liu Xiaoming told the UK to keep its ‘’hands off Hong Kong and show respect. They forget that Hong Kong has now returned to the embrace of the motherland’’. Foreign minister Jeremy Hunt then summoned him to the Foreign Office, a move diplomatically seen as a rebuke. Today in mainland China state media are blaming Western governments for the unrest in Hong Kong, ‘even though their actions have caused misery and chaos in country after country in Latin America, Africa, the Middle East and Asia. Now they are trying the same trick in China’.
Many bonds rallied, and yields on some slumped to new record lows, as the choice of Christine Lagarde to head the ECB is viewed as a dovish move which will continue the status quo for another 5 years. Today is the Independence Day holiday in the US and President Trump is said to have planned some fairly spectacular celebrations in Washington. One wonders whether he’ll Tweet about US stock indices where the S&P 500, Nasdaq, and Dow Jones Industrial Average all set new record closing highs.
DAX 30
Clearly overbought as we rally to this year’s highest point and retrace almost a Fibonacci 74.6 per cent of last year’s drop.
SHORT TERM TRADER: Stopped out for a loss on last night’s close.
POSITION TAKER: Square.
FTSE 100
As overbought as it was at April’s high as the idea of free money to throw around feeds into trader’s minds.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
S&P 500
Overbought like the previous two as we leap up towards the top of a broadening top formation that has been building since early 2018. Other US indices also closed yesterday at new record highs. It stopped yesterday at the massive psychological level at 3000, and the Dow Industrials 26,966 (almost 27,000), on a holiday-shortened day on Wall Street.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
FX moves are unconvincing. Yesterday President Trump Tweeted: ‘China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games - as they have for many years!’
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Another day, another doji, as this market looks for direction.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Struggling a little as bullish momentum slumps.
SHORT TERM TRADER: Square.
POSITION TAKER: Short at 1404; stop above 1440. Target 1320.
