Financial exchanges in Shanghai, Shenzhen and Zhengzhou re-opened today after an extended Lunar New Year holiday and share prices had a lot of catching up to do. The biggest 300 companies closed off 7.7 per cent with some firms hitting the daily limit 10 per cent decline. The price of some commodities also fell. Eyewitnesses say the cities themselves are still like ghost towns with only essential trips outdoors being made. Yesterday the Peoples Bank of China announced it will be adding 150 billion yuan into the banking system to help in the fight against the coronavirus. The Caixin manufacturing PMI dipped to 51.1 from 51.5 in December.
India’s finance minister Nirmala Sitharaman told CNBC on Sunday that economic growth projections for fiscal 2020/2021 of between 6 and 6.5 per cent were realistic. Previously she had announced an extra 2.83 trillion rupees to be spent on agriculture and rural development, plus a cut to personal taxes.
DAX 30
History doesn’t repeat itself but it rhymes, as they say. The monthly shooting star candle in January 2020, at a marginally higher record high at 13640, has many echoes of January 2018 when the index first reached a then record high at 13600. Two years on and progress is nil, and the MACD hardly bullish.
SHORT TERM TRADER: Short at 13460; stop above 13400. Target 13000.
POSITION TAKER: New short at 12945; stop above 13650. Target 11850.
FTSE 100
A diamond top chart pattern is notoriously difficult to spot and to work with, but this is potentially want the FTSE 100 has been building over the last 3 years. The MACD reflects the challenges posed by this formation.
SHORT TERM TRADER: Short at 7470; stop above 7550. Target 7200.
POSITION TAKER: New short at 7260; stop above 7440. Target 6800.
S&P 500
A perfect dragonfly doji at the record high on the monthly chart might mark the top of a highly irregular wedge formation. Despite Friday’s close off the top, the index is still overbought.
SHORT TERM TRADER: Short at 3260; stop above 3350. Target 3100.
POSITION TAKER: Square.
BRITISH POUND/US DOLLAR
Holding rather half-heartedly – with no momentum – roughly in the middle of the range since mid-2016.
SHORT TERM TRADER: Small long at 1.3075; stop below 1.3000. Target 1.3500.
POSITION TAKER: Square.
EURO/US DOLLAR
No traction and no decent price action, and momentum bearish for 19 consecutive months.
SHORT TERM TRADER: Took profit at 1.1100, ahead of target at 1.1160 because the rally was so sudden and unexpected.
POSITION TAKER: Square.
GOLD
Overbought since August and stalling at Fibonacci 76.4 per cent retracement resistance. Not a terribly promising combination.
SHORT TERM TRADER: Cut out my small long at 1578 for zero profit or loss.
POSITION TAKER: Square.
