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Market Outlook: Global trade drops in September

Dashing hopes of an uptick
November 26, 2019

This morning the Financial Times reports that, per data from the CPB World Trade Monitor, the volume of international trade fell by 1.3 per cent in the month to September 2019; this follows a 0.5 per cent increase in August. Looking back over the year there was a 1.1 per cent contraction, a fourth consecutive annual shrinkage and the longest decline since 2009’s great financial crisis. The US and China were the biggest drag on the numbers, imports falling by 2.1 per cent and 6.9 per cent respectively.

Yesterday at the annual meeting of the Rhode Island Providence Chamber of Commerce, Fed chair Jerome Powell repeated that the Fed was ‘’strongly committed’’ to keeping inflation at 2 per cent – despite it running well below that point this year. He also noted that the labour force participation rate was low and wage growth weak, all of which suggests a rate hike any time soon can be ruled out, says CNBC.

DAX 30

Not quite overbought despite the good run its had since late August.

 

SHORT TERM TRADER: Short at 13200; stop above 13375 with a target at 12335.

 

POSITION TAKER:  Square.

FTSE 100

Momentum is barely bullish despite yesterday’s strong close.

 

SHORT TERM TRADER:   Short at 7370; stop above 7435. Target 7175.

 

POSITION TAKER:  Short at 7300; stop above 7435. Target 7100.

S&P 500

Overbought again on a daily basis as we inch to a new record high here and in the Dow Jones Industrial Average.

 

 

SHORT TERM TRADER: Square.

 

POSITION TAKER:   Square.

BRITISH POUND/US DOLLAR

Redrawing the pennant chart pattern because its turned into a flag with zero momentum.

 

SHORT TERM TRADER:  Small long at 1.2950; stop below 1.2800. Target 1.3350.

 

POSITION TAKER:  Long at 1.2950; stop below 1.2750. Target 1.3350.

EURO/US DOLLAR

The MACD is still just bearish as the euro tests Fibonacci 61 per cent retracement support. With data yesterday showing that greenhouse gases hit a new record high in 2018, EU politicians are scurrying around hoping to declare a ‘climate emergency’ ahead of next week’s United Nations climate conference in Madrid (which had to be moved from Chile because of protests).

 

SHORT TERM TRADER:  Short at 1.1050; stop above 1.1100. Target 1.0930.

 

POSITION TAKER:  Square.

GOLD

Tiny little moves and a barely bearish MACD.  

                            

SHORT TERM TRADER:  Short at 1520; stop above 1500. Target 1440.

 

POSITION TAKER:  Short at 1507; stop above 1520. 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.