IIFT Daily Note with Peter Brown

Bad day for the markets.

Posted by:  |  Time: 7:55 am  |  Topic:
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What a sell off! The market reacted to the election result with total disinterest. Bad figures in Germany set the tone but Wall St. kept selling. We reached 1384 on the S&P, well below support at 1404  and 1394. This has set the tone and any bounce is now a sell. The market is focused on the ‘Fiscal Cliff’ we are not going to be able to get away from it for a few months. It, together with the Euro Zone outlook getting worse will put us in a bear market untill year end. We will get some bounces and today that is likely but we have to look for downside targets.

1380  and 1365 are the main supports for the S&P  but I would expect an attempt at a bounce today, maybe to 1412 area.

The picture is less clear on Eur/USD . The Euro is a sell but will the dollar be weak also? Hard one to call. Initially while we hold below 1.2835 we are in a bear trend, with a target of 1.2600.

The moves in this market are massive so be careful. Go with the flow.

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