IIFT Daily Note with Peter Brown

Sharp sell off.

Posted by:  |  Time: 7:45 am  |  Topic:  |  Comments: 2
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The US Senate has failed to reach a compromise that would avert broad automatic government spending cuts, just hours before they were to begin to take effect. Each party has blamed the other for the failure. The Senate on Thursday voted down two separate proposals that would have replaced existing legislation and prevented the automatic austerity measures from kicking in on Friday.

Although there appeared to be broad agreement about the need to avert the $85 billion (65 billion euros) in automatic cuts known in Washington as the “sequester,” the two parties are at odds about how to do it.

So the market sold off. The automatic austerity measures are expected to dampen growth in the economy and despite the stock market trying to ignore it’s effects it eventually buckled last night.

Will this end this leg of the bull run? We may have trouble reaching news highs and 1530 now looks like a serious top.

Mood this morning is key. we have good retail sales figures from Germany which may add support. We need to let the mood develop. This market is doing serious volatility but not in any clear direction. We are having 200+ point days on the S&P but are still at the same levels of last week.

Not an easy market to trade. Wiat for the mood and go with that. This afternoon should be interesting, if the American’s can rally this market we are ok. But if today is another down day a serious correction phase to 1450 may kick in.

Levels are 1502  1507 support 1525  1530 resistance  Euro 1.3050  1.3020 support  1.3090 resistance.

I like USD/JPY and hate gold, looks like a big sell off comming there.

 

2 Comments

Pat O'Donohue

March 1, 2013

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Hi Peter,

You say you hate Gold … do you think it’s a ‘short’ at this level and if so what target would you put on it?

Pat O’D..

    Elva Burns

    March 4, 2013

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    Hi Pat,

    Exact entry and exit points are deemed investment advice. I can provide you with commentary on the markets.

    I do not provide individual trades..

    Regards

    Peter