IIFT Daily Note with Peter Brown

Bernanke wants to taper!

Posted by:  |  Time: 6:53 am  |  Topic:  |  Comments: 1
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A clear outcome to the FOMC yesterday, which surprised the market. Tapering ,if the economy stays strong, will start this year and end mid 2014. A very clear signal. Now it is up to the major players in the market to decide whether to exit the stock market with the profits they have year to date (about 15%) or stay on the basis the economy is improving and the market will keep rising.

The initial reaction of a 300 point fall is just a knee jerk. The real outcome will take about a week. 1600 to 1594 is the expected bottom. If we start to move below there it will be very bearish. I suspect we will be ok. Some nervousness over the next few days but I think we will settle down and rally. We may even rally today.

Let the market have some time to settle the macro view will emerge.

If you stick to the 75 point rule you will do ok.

Ending QE will also strengthen the dollar.

Levels today are difficult but here goes.

S&P 1640  1618  1600   Euro 1.3300  1.3180

One Comment

Fearghal Power

June 20, 2013

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Spot on with 1.3180