Join our community of smart investors

Market Outlook: Kurz is back in town

With about 38 per cent of Austrian vote
September 30, 2019

Sebastian Kurz (33), the youthful leader of Austria’s conservatives, whose coalition government with the far-right Freedom Party collapsed after an expenses scandal, took an estimated 38 per cent of all votes making them the key to a new coalition government. Next in line with around 22 per cent of the vote were the Social Democrats, their worst showing since WWII, followed by a diminished far—right and then the Greens at 14 per cent. Negotiations are expected to take weeks, making Austria another EU nation with a ropy handle on government.

The World Trade Organisation has found that EU airplane-maker Airbus received billions in illegal subsidies for at least 15 years; so too has US’s Boeing. They are expected to decide on a record award for the US this week, with another against to US due in 2020. Suggestions are that the Geneva-based organisation is thinking of tariffs on EU goods exported to the US running into roughly $7.5 billion, a record.

DAX 30

Last week feels like a complete non-event, something reflected in an irrelevant MACD. However, the weekly candle is a small hanging man and today’s the last day of Q3 2019; time to take stock. German auto-maker VW, which has already taken an approximate hit of $30 billion on the diesel emissions scandal, is facing an imminent decision on a collective case brought by 400,000 German car drivers, again related to cheating on exhaust data.

 

SHORT TERM TRADER: Short at 12365; stop above 12500. Target 11600.

 

POSITION TAKER:  New short at 12350; stop well above 12500. Target 11400.

FTSE 100

Ending the week by settling on Fibonacci 61 per cent retracement resistance – for the first time since July – yet the MACD remains bearish.

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Square.

S&P 500

Clinging rather sadly to support around 2960 but the weekly MACD remains bearish. Note that price action since March is a version of a broadening top, a fractal of all price action since 2018.

 

SHORT TERM TRADER: Square.

 

POSITION TAKER:   Square.

BRITISH POUND/US DOLLAR

Giving up half of this month’s earlier gains with what looks like an evening star combination over the last 3 weeks. The trouble is that a reversal pattern of this kind ought to follow a decent bull market, something we haven’t seen really, and the MACD remains bullish. Plenty of divergence here, so tread very carefully.

 

SHORT TERM TRADER:  New small long at 1.2290; stop well below 1.2200. Target 1.2500.

 

POSITION TAKER:  Square.

EURO/US DOLLAR

A sorry little specimen with its lowest weekly closing price since May 20117 and even then, it isn’t oversold.

 

SHORT TERM TRADER:  Square.

 

POSITION TAKER:  Square.

GOLD

Once again settling on first Fibonacci retracement support, this time with a weekly shooting star candle and the MACD at its least bullish since this summer’s strong rally started. Beware divergence.

                            

SHORT TERM TRADER:  Short at 1520; stop above 1535. Target 1440.

 

POSITION TAKER:  Short at 1507; stop above 1560. Target 1440.

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.