IIFT Daily Note with Peter Brown

Just a correction or the end of the rally?

Posted by:  |  Time: 7:56 am  |  Topic:
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The market spent the European session mostly ignoring the implications of the Italian election comming up this weekend. However following the FOMC meeting and some concerns over continued QE the market finally cracked. The market got clobbered right across the board. Commodities were hit hardest but the S&P fell 200 points and the euro is down 180.

Is the easy market over?

Well Ithink the S&P is still supported but we could see further correction in the short term. The outcome will be determined by the election result so the next few days until Monday will be tricky. I would certainly not be a seller of the S&P down here and we may in fact get a serious bounce today.

On the Euro side I expect the market to show more nervousness ahead of the weekend. So depending on the mood this morning I may sell. This is a time to be careful, after the easy market so far this year I have no need to chase this. The easy trade seems to be USD/JPY which was virtually unchanged yesterday amidst the carnage. New targets there are 115!

This market is very volatile so a strategy based on following the mood rather than trying to fade it might be better.

Levels are  S&P 1500  1503 support and 1516 on the topside. Euro 1.3200  1.3200  and resistance at 1.3280  1.3300

IBEX is a sell if it bounces around 8200.  Morning market could be bearish afternoon market could bounce.

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