A decade on from the great financial crisis, and a good 7 years since ‘whatever it takes’ and here we are again, with the ECB trying to revive a dead donkey. Its interest target hasn’t been met in years, growth has slowed to a crawl, and Germany risks recession. So, instead of charging Eurozone banks 40 basis points on their excess reserves, they will now be slapped with a 50-basis point charge – though a two-tier system will be launched where a portion will escape this levy. Re-starting the (mainly government) bond buying programme in November with €20 billion monthly, this will continue until CPI reaches its target – opening the possibility of QE forever. Economic growth forecasts have unsurprisingly been downgraded.
Established on Oxford Street in 1864, for the first-time high-street chain John Lewis reported a half-year loss - of £25.9 million. Outgoing chairman Sir Charlie Mayfield said, ‘’we have historically made the majority of our profits in the second half of the year…Should the UK leave the EU without a deal, we expect the effect to be significant’’.
DAX 30
Overbought with a slightly unstable long—legged doji-style candle yesterday after rallying for seven consecutive working days. Remember the Rule of 8 (to 10) which says that if a move has continued this long in one direction only it is mature and due a correction.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
FTSE 100
Yesterday’s doji bang on the 50 per cent retracement level saw bullish momentum ease, sounding a warning.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
S&P 500
Settling above the psychological 3000 level for the third highest-ever close.
SHORT TERM TRADER: Square.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Today’s nudge above 1.2400 sees a decent increase in bullish momentum. Now some media commentators are talking about cable at 1.5000 if the PM cobbles some semblance of a deal together; these are probably the same people calling for parity not so long ago.
SHORT TERM TRADER: Small long at 1.2345; stop below 1.2200. Target 1.2550.
POSITION TAKER: Will go long on a close above 1.2400 tonight.
EURO/US DOLLAR
Looking a lot more like it! A double bottom at 1.0925, a strong hammer candle yesterday, and follow-through this morning. Maybe helped along by President Trump moaning about the strength of the US dollar this week.
SHORT TERM TRADER: New long at 1.1105; stop below 1.0900. Target 1.1350.
POSITION TAKER: Will buy on a close above 1.1100 tonight.
GOLD
Gold and silver bugs getting rather excited about the prospect for precious metals – but I can’t quite see why. Momentum is bearish and yesterday’s strong rejection at the top of the current band underlines the importance of this chart level.
SHORT TERM TRADER: Short at 1520; stop above 1535. Target 1440.
POSITION TAKER: Short at 1507; stop above 1560. Target 1440.
