Yesterday morning the ZEW institute released August sentiment data showing the current situation had deteriorated to -13.5 from -1.1 in July. Far worse, the expectations reading collapsed to -44.1 from -24.5, the lowest level since December 2011 (following which the ECB’s Mario Draghi was forced into his ‘whatever it takes’ mode), in turn the weakest reading since December 1992 when Germany was ‘the weak man of Europe’. This morning Q2 GDP data dipped 0.1 per cent on the quarter taking to annualised rate to flat – no growth.
Yesterday the Trump administration rolled back September’s proposed import tariff hike on Chinese goods to the 15th December. Products such as: ‘’cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing’’; just in time for Christmas shopping.
DAX 30
Bouncing from this week’s low but capped again at Fibonacci 38 per cent retracement resistance.
SHORT TERM TRADER: Small short at 11645; stop above 11865. First target 11400.
POSITION TAKER: Short at 11835; stop well above 12000. First target 11000.
FTSE 100
Momentum is bearish and the index remains capped at Fibonacci 38 per cent retracement resistance.
SHORT TERM TRADER: Small short at 7200; stop above 7400. Target 7000.
POSITION TAKER: Short at 7570; stop above 7430. Target 7000.
S&P 500
Squeals of delight from the business media on tariff backtracking but the S&P 500 remains below May’s high and below the broadening top chart pattern, with bearish momentum.
SHORT: Short at 2885; stop above 2945. First target 2785.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Stuck at the bottom of this year’s range and still oversold.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
EURO/US DOLLAR
Stuck in a range and momentum is very low.
SHORT TERM TRADER: Small long at 1.1165; stop below 1.1060. Target 1.1340.
POSITION TAKER: Square.
GOLD
A long-legged doji after a strong rally and overbought – all denote instability at current levels.
SHORT TERM TRADER: New little short at 1500; stop above 1535. Target 1440.
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.
