IIFT Daily Note with Peter Brown

High Volatility warning!

Posted by:  |  Time: 7:39 am  |  Topic:
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We open this morning around the levels we opened yesterday but the volatility we experienced has been extreme. The stock market has decided to rise or fall 100+ points on each news alert. This is a dangerous market and given the raft of economic news today and tomorrow we need to be very careful. Tapering is back on the table but the market is still underpinned by low interest rates. I do not think anyone knows what reaction we will get if there is a hint at tapering in December or what reaction we will get if it is ruled out.

Dollar which should be supported got murdered yesterday. ECB today should be Euro negative but we are at 1.3630 . All in all this market is close to out of control, a hurricane market as we would describe it. There is no logic to trade here and the strategy is just to exploit the moves. To trade this it is the losses that need to be managed. In that regard we limit ourselves to a maximum of 75 points minus a day. This way you limit the downside and if you have a good day you should be able to post 100+.

Levels today are a bit irrelevant due to the amount of news coming out but here goes.

Euro 1.3650  1.3600  S&P (DEC) 1800  1778  Wall St (DFB) 15960 15790


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