Published this morning by IHS, August private company activity dropped again to 40.8, from 43.8 on July – well below the 50-level suggesting contraction. Not entirely surprising considering the demonstrations that have been going on for months, but caused mainly by a big drop in new orders from mainland China. This afternoon in Hong Kong rumours are swirling that Chief Executive Carrie Lam is considering formally withdrawing the very controversial extradition bill; the Hang Seng index soared by around 3 per cent.
Released this week South Korea saw its CPI annualised inflation drop to nothing, zero, zilch, a record low for a series going back to 1966. The issue is also a problem in other developed nations, Italy August Y/Y CPI is running at just 0.5 per cent – not as low as the negative 0.5 per cent in 2015 and 2016. Spain’s July CPI released last month saw it drop to 0.6 per cent Y/Y versus 0.7 per cent in June; better than the minus 1.0 per cent seen in 2009, 2015 and 2016. Meanwhile across the Eurozone producer prices grew by a meagre 0.2 per cent in the year to July.
DAX 30
Bullish momentum is stronger than we though and the index has broken above the 50 per cent retracement resistance level.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
FTSE 100
Moving towards the half-way retracement resistance level and faces a descending bearish daily Ichimoku cloud through to the end of this month.
SHORT TERM TRADER: Square.
POSITION TAKER: Short at 7570; stop above 7325. Target 7000, maybe 6865.
S&P 500
There is no bullish momentum despite this morning’s rally. Note that the hurricane is now very close to the Florida coast.
SHORT TERM TRADER: Small short at 2910; stop above 2970. Target 2820.
POSITION TAKER: Short at 2915; stop above 2970. First target 2820.
BRITISH POUND/US DOLLAR
The dip a few pips below the psychological 1.2000 is a false break where we have ended the day with a hammer candle, one which may reverse the trend and turn things bullish. On the other hand, is it really worth trading cable with these muppets in Parliament?
SHORT TERM TRADER: New long at 1.2150; stop below 1.1950. Target 1.2275.
POSITION TAKER: Square.
EURO/US DOLLAR
Still oversold despite yesterday’s little hammer candle which possibly marks the low point of the decline since early July. We also have a potential morning star 3-candle pattern depending on today’s close.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
GOLD
The MACD is just bearish as we hold in a narrow range, maintaining the series of neat steps higher that started in July.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
