In what the Financial Times describes as: ‘a cabinet clear-out that made Harold Macmillan’s 1962 “Night of the Long Knives” seem modest by comparison’, new PM Boris Johnson got cracking, wasting no time as he’s only got 99 days to get the job done. Shivers up and down Whitehall too as Dominic Cummings, the ‘Rottweiler’ who managed the Vote Leave campaign, was nominated chief adviser to the PM.
Today the ECB will decide how to help an ailing EU economy. One of the last meetings to be presided over by Mario Draghi (I bet he can’t wait to leave as planned in October), they may or may not fiddle even more with negative interest rates and quantative easing – or maybe even come up with a new rabbit out of the hat. I would suggest they look to Japan where decades of ultra-loose monetary policy have been unable to counter the debilitating forces of demographics.
DAX 30
Momentum is bullish, helping the market rally on the hope of even easier monetary conditions.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
FTSE 100
Another fairly large daily range yesterday and the opposite to Tuesday’s action. A sort of clash of the Titans and a market slugging it out looking for direction. A daily close below 7500 might tip the balance.
SHORT TERM TRADER: Short at 7550; stop above 7600. Target 7200.
POSITION TAKER: Short at 7515; stop above 7625. Target 7100.
S&P 500
Almost overbought again as we probe the upper edge of the potential massive broadening top pattern that has dominated since early 2018.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Momentum is still not bullish as we try for a third time to base in the 1.2400 area.
SHORT TERM TRADER: Long at 1.2525; stop below 1.2385. Target 1.2750.
POSITION TAKER: New little long at 1.2500; stop below 1.2350. Target 1.2775.
EURO/US DOLLAR
As the Eurozone’s largest banks are increasingly showing signs of distress, I’m not convinced that Christine Lagarde is up to the very difficult job of leading them out of the mess they’re in.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
Just holding in the middle of the range of the last month.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
