IIFT Daily Note with Peter Brown

A waiting game.

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Commentary:

Last day of trading before we enter the big events of Draghi and the NFP, going to be a rocky ride for Thursday and Friday. Today however we have some interesting releases. GDP and PMI at 10am in Europe which I expect will be fairly poor given the recent releases and later Manufacturing PMI at 15.00 in the US. Just enough to keep the market interesting.

Yesterday we saw a sell off early in the DAX and some sideways trading later in the day. Market really in a waiting mode given the importance of Draghi tomorrow. Today expect some movement but mainly sideways again.

We have reached a new high on most indices some foot on the ball action is no surprise. On FX we are going nowhere in a hurry as dollar weakness is offsetting Euro weakness. Big day tomorrow for this pair and the blog will be heavily concentrating on tactics around the Eur/Usd.

 

Latest Trading Strategies.

  1. Dax Fade.

 

We have noticed that after the initial 8am market move the DAX is reversing that move on a consistence basis. Look to fade the initial market move either higher or lower after the first 15/30 minutes. Unlikely to work on days where there is a big story in the market (rarely at present) or where my condition call is Hurricane. Trade is worth 40/80 points.

  1. Dow/S&P Gap play from below.

The gap play has a high success rate when traded from a down gap. Look to set trades between 11.30am to 12.30pm. Be careful if there are major news releases in from the US at 1.30pm. Market may wait until then to start the move. If the gap close has not completed by 3.30pm square up.

  1. EUR/USD sell.

Market is in a strategic down move. Initial target is 1.3550 but may be lower when Draghi speaks in June. Use bigger stops on this trade as it is silly to get stopped out on small bounces. Tech. levels are very sticky so use them for stops and cash in points.

 

 

 

 

 

Wall St (DFB)

Market stayed within our trading range yesterday and we expect more of the same today. News not that significant to warrant a big move..

 

Conditions: Calm Resistance: 16760 Support: 16690

 

 

S&P June Future

Market has broken the 1900 level and is stabilizing. Good support and little to suggest that the market is not comfortable at these levels.

 

Conditions: Calm Resistance: 1925 Support: 1915

 

 

DAX (DFB)

Slightly negative yesterday and broke through support at 9930. Follow through was another 50 points lower where we stopped and bounced. Market looking to tomorrow although there are major releases at 10am which could provide some direction..

 

Conditions: Choppy Resistance: 9960 Support: 9880

 

 

FTSE 100 (DFB)

Slight negativity in Europe early yesterday knocked the FTSE out of the tight trading range. Now settled down 30 points lower. Overall the market is supported and a buy on dips..

 

Conditions: Calm Resistance: 6880 Support: 6815

 

 

EUR/USD (DFB)

Range bound until tomorrow 1.3650  1.3600..

 

Conditions: Calm Resistance: 1.3650 Support: 1.3600

 

 

USD/JPY (DFB)

Bit of dollar strength pushing through and we made a break above 102.50 Somehow feel we will be stuck below 103.00 as this pair ranges in 50point segments without any clear direction..

 

Conditions: Calm Resistance: 103.00 Support: 102.50

 

 

AUD/USD (DFB)

We can close the range to .9320 on the top side. .9200 still serious support. Policy announcements causing the volatility but the range still holds. This market is for the medium term strategic traders at present. Trades take a few days to play.

 

Conditions: Choppy Resistance: .9320 Support: .9200

 

 

GOLD (DFB)

There is just no reason to buy Gold. Low growth ,no inflation, and the Chinese have stopped buying. We have reached the first major support at 1235/40. This level may hold for some time. However we need some good news for gold to avoid a slip to 1180.

 

Conditions: Choppy Resistance: 1260 Support: 1235

 

 

SILVER (DFB)

Very similar story, and hard to differentiate the two. The big support in sliver is at 1865. We have not been below that level since 2010. However unless Gold can find some feet these levels will go. There is just not enough risk appetite in the market at present.

 

Conditions: Calm Resistance: 1880 Support: 1865

 

 

Market Conditions

Potential Moves:

  • Calm = 20/50 pts
  • Choppy = 60/80 pts
  • Hurricane = 100+ pts

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