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Market Outlook: German factory orders slide again

Drop 5.5 per cent in the year to October
December 5, 2019

Many had hoped, based on data over the last month or two, that perhaps Germany had turned the corner and that manufacturing had touched a low this summer and was beginning to recover. Factory orders published this morning showed that they had dropped by more than September’s 5 per cent fall, though an improvement on September’s 6.5 per cent decline. The low this year was an 8.4 per cent fall. This doesn’t quite chime with manufacturing and services PMIs published earlier this week which had slightly higher readings.

French unions, protesting against pension reforms proposed by President Macron, called a strike for today – and possibly a lot longer. Trains, planes and the metro are affected, many schools will remain closed, and hospitals will be working with a skeleton staff. Some gilets jaunes factions are planning to join the protests.

DAX 30

Bouncing on the usual Sino-US trade talks hopes and because there is really no momentum on the daily chart.

 

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

 

POSITION TAKER:  Square.

FTSE 100

Yesterday’s dragonfly doji signals a pause for thought, probably a good thing as we were at the lowed edge on the central range since August.

 

SHORT TERM TRADER:   Square.

 

POSITION TAKER:  Short at 7300; stop above 7325. Target 7100.

S&P 500

An inside day and harami, a pregnant pause, as prices dither between the upper edges of the two very large potential broadening top formations and prepare to face what follows.

 

 

SHORT TERM TRADER: Small short at 3112; stop above 3160. Target 2975.

 

POSITION TAKER:   Will sell depending on how the weekly candle looks.

BRITISH POUND/US DOLLAR

Bullish momentum picking up fractionally on yesterday’s short-covering as the currency pair gingerly tests secular trend line resistance taken from 2014’s high. Amazing how a general election in 7 days’ time concentrates the mind. Daily and weekly closes above that trend line (at 1.3100 today) will probably lead to another round of short-covering. Note that the euro this morning is worth nearly 84 pence.

 

SHORT TERM TRADER:  Small long at 1.2950; stop below 1.2875. Target 1.3350.

 

POSITION TAKER:  Long at 1.2950; stop below 1.2865. Target 1.3350.

EURO/US DOLLAR

A ridiculous market with someone gunning for stops in a thin market creating yesterday’s spike high and dragonfly doji.

 

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

 

POSITION TAKER:  Square.

GOLD

A doji yesterday as prices dither at the 1480 area.  

                            

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.