IIFT Daily Note with Peter Brown

Market still soft.

Posted by:  |  Time: 7:43 am  |  Topic:
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Very little in the way of a bounce yesterday. Outside a 100 point recovery in the DAX but other indices remained offered. Market has agreed we are in a correction phase and the question is how big will it be. Taking the S&P as the reference 5% would be 1798.  7% would be 1760 and 10% would be 1703.

As we said yesterday the market will not move soley in one direction so days of bouncing will be normal. However the poor stats in the US have led us to believe that valuations in the stock market were too high. This is especially true in the Nasdaq were stocks were trading at an incredible 37 times earnings!

So today we have little in the way of economic releases. Market should be calm /choppy and a sell on rallies.

Levels are:- S&P (JUN) 1850  1840 Wall St (DFB) 16300  16200 DAX (DFB) 9530  9450 Euro 1.3820  1.3750 Gold 1325  1300

Watch the DAX for the mood. My guess is we should have a sideways to up day and a chance to reset shorts.

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