Today’s general strike follows 8 consecutive weekends of violent demonstrations. Carrie Lam, the city-state’s chief executive, held a press conference for the first time since the 22nd July. Reuters reports that a stern-faced Lam, flanked by senior members of her administration, warned that ‘’these illegal acts that challenge our country’s sovereignty, and jeopardise ‘one country two systems’, will destroy the stability and prosperity of Hong Kong’’.
After just 18 months into his stint as CEO of banking giant HSBC, John Flint has stepped down – all too suddenly. Coinciding with the announcement of half-year financial results, the bank said his move was because the bank needed a change in personnel to address ‘’a challenging global environment’’. Mark Tucker, the first externally appointed chairman of the bank since 2017, remains in place. Shares in HSBC dipped 1.5 per cent in Hong Kong while the Hang Seng index is off 2.9 per cent (at the time of writing).
DAX 30
A large bearish engulfing candle last week follows the previous one’s shooting star, and has turned momentum bearish. This marks the fifth time the index has stalled between 12400 and 13600. Long term trend line support lies around 11000.
SHORT TERM TRADER: Took the other half of my profits at 11800 as planned. Now looking to re-sell, but I’m not sure we’ll get any bounce.
POSITION TAKER: New short at 11835; stop well above 12200. First target 11000.
FTSE 100
A bearish engulfing shooting star candle last week underlines that the whole thing above 7600 was a non-starter. The commodity channel index has slumped into bearish territory though other oscillators have yet to catch up. This is the fourth time since 2017 that this index has been capped at the 7600 area. This morning in London streets were very empty as was public transport, suggesting summer holidays have kicked in for real. It also means that markets are likely to be thin and therefore subject to bigger and faster moves than one has grown to expect.
SHORT TERM TRADER: New short at 7400; stop above 7620. Target 7100.
POSITION TAKER: Short at 7570; stop above 7530. Target 7000.
S&P 500
After President Trump’s announcement of new trade tariffs late last week, the Chinese authorities are fighting back. The usual monetary tools: a weaker currency, lower bond yields, let the stock market struggle. To that Bloomberg adds halting US crop imports. The S&P’s bearish engulfing candle last week completes a small broadening top that’s been in the making for the last 4-5 weeks. It also suggests we’ve found a top to the much bigger broadening top that’s been in the making since 2018. The commodity channel index is clearly bearish, backing up the same signal on FTSE.
SHORT TERM TRADER: Short at 2945; stop above 2965. Target 2875, maybe 2700.
POSITION TAKER: New short at 2915; stop well above 2960. Target 2800.
BRITISH POUND/US DOLLAR
Here in Britain we’re well aware of issues in the FX market. Now currency wars have ratcheted up another notch with the Chinese yuan trading above 7 to the US dollar and the Japanese yen, traditionally seen as a safe-haven, dipping below 106 to the greenback for the first time since March 2018.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Unlike cable the euro isn’t oversold against the US dollar though it too has been drifting for a very long time. This month at its weakest since May 2017, it’s attempted a little bounce since Thursday’s low.
SHORT TERM TRADER: Watching for further signs of a temporary little base forming.
POSITION TAKER: Square.
GOLD
Still very overbought as we trade above 1440 on investor jitters left, right and centre.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
