It’s time for traders to exercise caution

The tug-of-war in American politics has thrown investors into a spin. John C Burford explains how you can use the charts to navigate the volatile markets.

As the debt ceiling deadline looms, all eyes are on the US Congress. In spite of what some over-heated pundits and politicians are claiming, money appears to have settled on an eventual agreement not to plunge the world into chaos. The belief is that Armageddon will be postponed again when Congress and the president hammer out a deal whereby the US will not default, and government will continue to be funded.

The question for traders is this: has the rally late last week in stocks fully discounted this expectation?

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.