IIFT Daily Note with Peter Brown

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Good Morning

Today is all about the NFP number. We are expecting 180k but there is a feeling that it may be lower. Either way I am confident it will not affect the macro view that rates will rise in December and that the dollar will continue to strengthen. If the number is sub 150k we may see a dollar pull back but that will be a buying opportunity. For stocks I think the figure is meaningless. We will get some price action for sure but expect the initial move to reverse. This US market is very defined, they have some growth, they have some inflation, they are creating jobs, they will raise rates.

So on FX there will be trades today. A big number and the dollar continues to appreciate, a poor number and we re-trace a bit to resume the rally next week. The S&P and Dow are for the mood traders.

Fade happened too late yesterday to be useful. Today we expect a very quiet European session ahead of the NFP, so the fade may be tiny.

 

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:

US NFP at 1.30pm

 

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

Comments and questions to pbrown@iift.ie

 

  1. DAY TRADING COMMENTARY

 

S&P (Cash/DFB)

We have cut our strategic trade this morning. Market looks too stable to break lower to our target. NFP the big event of course, some action for the mood traders but expect the market to be practically unchanged by close. The jobs data is less important now that the economy is confirmed to be growing. Rate movements are now the big event.

Conditions: Choppy Resistance: 2,109 Support: 2,089

 

 

Wall St (DFB)

These tech levels are quite good. If the NFP does not miss by too much these levels should define the trading range today.

Conditions: Choppy Resistance: 17,930 Support: 17,770

 

 

DAX (DFB)

Not a big day for the DAX so expect this morning to be very quiet. Action is all on this afternoon. More or less the same tech levels as yesterday.

Conditions: Choppy Resistance: 10,970 Support: 10,780

 

 

FTSE 100 (DFB)

Market is performing poorly overall. Mining stocks are dragging. See below for our strategic trade set up.

Conditions: Choppy Resistance: 6,410 Support: 6,340

 

 

EUR/USD (DFB)

Yet another big day for the Euro. A high NFP and we may test the low 1.08 support again. A low figure and we may bounce a bit. Either way we should stop in and around the levels below.

Conditions: Choppy Resistance: 1.0935 Support: 1.0805

 

 

USD/JPY (DFB)

As above really except in reverse of course. Use the levels below.

Conditions: Choppy Resistance: 122.60 Support: 121.40

 

 

AUD/USD (DFB)

Aussie market is too quiet for a strategic trade at these levels to be honest. Any bounce into the .73’s  is where I would set a strategic sell.

Conditions: Choppy Resistance: .7400 Support: .7000

 

GOLD (DFB)

I sold gold yesterday at 1116. I have a stop at 1131 and a take profit at 1082. Still value in the trade once the dollar keeps strong. I am running the trade into the NFP data. No matter what the figure I think the dollar will resume its rally next week.

Conditions: Choppy Resistance: 1131 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)

SELL S/P 500 AT 2110 S/L AT 2120 T/P AT 2102 AND 2073 (half and half)

Cut the remainder this morning. Trade over.

New Trade order: SELL 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.

 

2 Comments

Brendan Ferriter

November 6, 2015

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Hi Peter,

In relation to the FTSE strategic trade, are you using the December Contract ?

Regards
Brendan

    Peter Brown

    November 6, 2015

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    Hi Brendan,

    No always the DFB

    Regards

    Peter