IIFT Daily Note with Peter Brown

Another sharp correction in stocks.

Posted by:  |  Time: 8:13 am  |  Topic:
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It is quite clear now that 2014 will not be the same as 2013. Stocks are not going to power ahead as they did last year. We have now had two very sharp corrections from bull markets. Yesterdays was caused by very little in reality. A report from BOA that the market may be fully valued and bad results from J&J. This combined to spook the market and the S&P fell 160 points. All this will make the market lose confidence in these rallies. We do not expect the 10% correction some are calling for and more likely is we settle into a wide trading range. 1850  1810.

Today is key to see if the market can recover all lost ground and post a new high, but it looks unlikely. This is not a one way bet like last year. Days of gain are being lost is hourly falls.’ Up the escalator down the lift’.

Elsewhere the Euro is still being talked down but showing it’s usual strong resistance to weakening. the trend is definitely down but the big moves are more likely closer to Draghi speaking early next month.

Today should be Choppy  likely rallies will be sold into.

Levels are Euro 1.3570  1.3500  S&P (MAR) 1846  1836  Wall St (DFB) 16450  16325  weaker due to J&J.

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