IIFT Daily Note with Peter Brown

Dollar to the stars.

Posted by:  |  Time: 7:43 am  |  Topic:
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Good Morning

Well an amazing NFP on Friday sent the index markets into a flurry and roared the dollar. The market is now 70% certain of a rate rise in December; I am close to 90%. This market is very defined macro wise on FX and confused with regards to the indices.

Dollar is a bit softer this morning and that is to be expected due to some profit taking. It will not last long however and the buying will resume. This is the easy trade this side of year end.

How will the equity markets take the possibility of a rate rise. We will see over the next few sessions. My guess is that we will range. No great rallies. No great sell-off. It is only a 1/4% move after all.

Nothing on the calendar today, so possibly a ranging day. We may get a chance to set some dollar buy trades if we pull back further.

Dax fade should be in play this morning.

 

Update: We are delighted to announce that there are now three parts to the blog:-

 

  1. DAY TRADING COMMENTARY
  2. STRATEGIC TRADES (DAYS TO WEEKS)
  3. EQUITY TRADES (WEEKS TO MONTHS)

 

The day trading commentary you will be familiar with. We have added strategic trades and Equity trades as we know many traders are not day trading and have a longer perspective. These trades come from trusted professional sources and are validated by IIFT. They will include entry points; stop loss and profit take levels. We will also include any intra-trade actions, such as stop loss adjustments etc, as the trade is in running.

It will take a little time to get up and running but be assured all these trades will undergo analysis before they are posted. I hope they will help to bring some profit but also add an insight into how other traders are thinking. Feedback will be very welcome.

 

On the calendar today:

Nothing of note

 

http://www.iift.ie/economic-calendar/

Comments and questions to pbrown@iift.ie

  1. DAY TRADING COMMENTARY

 

S&P (Cash/DFB)

Despite the huge NFP figure we are using more or less the same levels as Friday. This market is range bound with a bias to the down side. It will be an interesting session this afternoon to see the mood. Sell on rallies is my bet.

Conditions: Choppy Resistance: 2,109 Support: 2,083

 

 

Wall St (DFB)

Again the same levels as Friday which is amazing after such a big miss. As above really.

Conditions: Choppy Resistance: 17,925 Support: 17,775

 

 

DAX (DFB)

Levels up about 100 points on the DAX. lower Euro is positive for the DAX and we should see it outperform the DOW. Not a sell on rallies but a buy on dips this one.

Conditions: Choppy Resistance: 11,060 Support: 10,870

 

 

FTSE 100 (DFB)

Our short trade has triggered. Mood here is negative. Poor Chinese data leading to lower commodities.

Conditions: Choppy Resistance: 6,380 Support: 6,330

 

 

EUR/USD (DFB)

A bit of a bounce of the lows but I do not expect that to last long. Sell on every rally and a chance to break the low of 1.0470 before the rate decision in December.

Conditions: Choppy Resistance: 1.0780 Support: 1.0700

 

 

USD/JPY (DFB)

Too late for a strategic trade, we have come a long way. We may hit 125 by December so buy on a pullback or day trade with a bias to the buy side.

Conditions: Choppy Resistance: 124.00 Support: 123.00

 

 

AUD/USD (DFB)

Missed the boat here but you cannot get them all. Again need a pull baqck.

Conditions: Choppy Resistance: .7200 Support: .6900

 

GOLD (DFB)

I took my profit on gold on Friday at 1190. If we bounce towards 1100 I will look to re-set the short.

Conditions: Choppy Resistance: 1100 Support: 1082

 

 

SILVER (DFB)

Silver is in a wide range. We need it lower toward 14.00 to set up a strategic long. There may be small value selling here.

Conditions: Choppy Resistance: 15.80 Support: 14.00

 

  1. STRATEGIC TRADES (Trade duration: DAYS TO WEEKS)

Sold FTSE AT 6390 S/L AT 6468 T/P AT 5990

 

  1. EQUITY TRADES (Trade duration: WEEKS TO MONTHS)

Short Unilever:

We think Unilever is looking toppy.  While clearly a good company with great brands, the share price has struggled through the year to break significantly above £30 a share.  Profit-taking, exposure to emerging markets, no great growth upside story and price action has led us to short the stock at £28.75.  SLO at £30.25 and profit order at £25.70.  R/R just shy of 2:1 but we anticipate adjusting order levels as the trade develops.

Reckitt & Benckiser:

Another solid consumer brands company that merits a look.  The firm has popular brands like Durex, Nurofen and Harpic and of course it has global presence. Recent results have been OK but we think there’s a shorting opportunity lurking.  In the summer it had a 700 point swing downwards and there’s no significant profit growth on the horizon.  Value is key with this one.  A level between £64 and £65 is where we see that value.  So, the order is on to short it at £64.64, SLO at £66.66 and profit order at £59.50 giving a decent 5:2 R/R. Order placed on Nov 4th.

 

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