IIFT Daily Note with Peter Brown

Gold sell off destabilises markets.

Posted by:  |  Time: 7:47 am  |  Topic:  |  Comments: 3
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Yesterday was a classic example why we teach a 2% stop loss per trading session. Activity in the markets is frankly out of control. The gold sell off, massive as it is, has seeped into other markets and prompted a correction in the stock markets and the USD. The moves are dramatic and unpredictable. This is market where trading is pure luck and more akin to gambling. This sort of out of control volatility is fun to watch but not easy to trade. The problem is there is no stop that is safe. The volatility will continue today most likely. Have we just had a correction to the trend or have we changed course. I cannot answer that at least for a few days. We have bounced from last nights lows but await the mood when trading gets of in earnest this morning. A good strategy is to sit back and watch or trade in very small. Although this market looks exciting it is not a traders market. High volatility is an opportunity to get badly burned.

Levels this morning are going to be pretty useless, the mood will determine the direction and if we see the same action as yesterday technical analysis will be of little use. I suspect we have just seen a correction and will regain the ground we have lost but I am not 100% sure. After today’s price action we should be able to give a clearer direction.

Support levels seen overning are Euro 1.3030  S&P 1540 USD/JPY 96.00  Gold 1325

As I say you need to watch to see if this market is in sell mode again today.

 

 

3 Comments

Yuvraj

April 16, 2013

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Hi Peter,

Apple is at its long term support level, it was broken yesterday. Do you think it will bounce or flow with market to the downside?

Peter Brown

April 16, 2013

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Hi Yuvraj

In normal market conditions I would make a stab at answering that.
However in this market anything can happen.
major support is at 380 what happens this afternoon is anyone’s guess.

Peter

Yuvraj

April 16, 2013

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Peter,

You are correct in stating that markets have no direction at moment. Further havoc in Boston added negativity to the market. I guess more opportunities are there in shorting the market. Buying on dips still seems very attractive option. Decisions are hard to make.