The fifth cut this year as the RBI struggles to keep up with a slowing economy, despite September’s corporate rate tax cut from 35 to 25 per cent. The MPC has also revised down economic growth forecast from 6.9 to 6.1 per cent in the financial year to 2020, and inflation should come in just under 4 per cent. This is the same central bank which earlier this week posted the following Tweet on Twitter: ‘’RBI would like to assure the general public that Indian banking is safe and stable and there is no need to panic on the basis of such rumours’’ [that two lenders and a mortgage company were in trouble].
The art circus is in full swing in London now that the kids are back at school. Yesterday at auction house Sotheby’s a large painting by street artist Banksy fetched £9.9 million (nearly 5 times the original estimate) – and didn’t self-destruct. It features rows of chimpanzees sitting in the House of Commons at Westminster and its title is ‘Devolved Parliament’.
DAX 30
Finding support at the 50 per cent retracement level with a small hammer yesterday. However, momentum remains clearly bearish and ought to increase on a close today below 11730.
SHORT TERM TRADER: Short at 12365; stop above 12275. Target 11635.
POSITION TAKER: Short at 12350; stop above 12400. Target 11425.
FTSE 100
A large dragonfly doji yesterday probably marks this week’s low. Bearish momentum is not as strong as one might expect considering the large losses of the last 3 consecutive days. A weekly close below 7000 (a level first reached in December 1999) might add to downside pressure. The UK’s Investment Association notes that equity funds saw retail outflows of £1.6 billion in September, a third consecutive month of withdrawals, taking the total for Q3 2019 to £3.2 billion.
SHORT TERM TRADER: Square and looking to re-sell.
POSITION TAKER: Will re-sell depending on today’s close.
S&P 500
Bouncing from some random level yesterday has done little to ease bearish momentum. Later today the US publishes September employment data, so we’ll see what’s next.
SHORT TERM TRADER: Small short at 2945; stop above 2965. Target 2820.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
The commodity channel index turned up yesterday but cable’s rally above 1.2400 was more to do with rumours about the US dollar that to PM Johnson’s Brexit suggestions.
SHORT TERM TRADER: Small long at 1.2290; stop well below 1.2200. Target 1.2500.
POSITION TAKER: Square.
EURO/US DOLLAR
The MACD is trying to turn bullish as prices test the psychological 1.1000 level.
SHORT TERM TRADER: New little long at 1.0970; stop below 1.0880. Target 1.1100.
POSITION TAKER: Square.
GOLD
Back inside the tight band that has dominated most of the time since early August.
SHORT TERM TRADER: Short at 1520; stop above 1535. Target 1440.
POSITION TAKER: Short at 1507; stop above 1560. Target 1440.
