IIFT Daily Note with Peter Brown

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After yesterday’s damp squid where the market showed some volatility after the ECB, only to end back where we started. The US market is pulling everything with it. Despite the Euro market attempting to sell off after Draghi disappointed it was the surge in the S&P that caused the rally late on.

Today is NFP and we expect 140k (a low number) Normally we have to have a number 20k + or – to cause a stir. Today however I think any number at 150 or better will result in a new high for the S&P. We need lower than 130 to result in a sell off. This US equity market is teflon, and right across the globe the hunt for yield is driving a ‘buy anything policy’. This will end in tears but not yet. There will have to be a major shock to the market to force hedge funds to exit the market. As yet there is no shock in sight, so we keep buying the dips.

 

Trading levels are : S&P 1596  1576  NFP will dictate.  Euro 1.3240  1.3180  1.3100  1.3045 is the major support.

2 Comments

Myles O'Reilly

May 3, 2013

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Hi Peter – is there potential for straddle play on nfp’s?

    Elva Burns

    May 3, 2013

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    Hi Myles.

    No is the answer. The reason is the revision to the previous month.
    This can cause a reversal in the first move.

    Peter