IIFT Daily Note with Peter Brown

Steady market

Posted by:  |  Time: 7:49 am  |  Topic:
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Commentary:

Taking a break next week so you will be in the capable hands of Niall for the next 5 days. Not a lot to say today, the figures from the US yesterday were mixed but the market choose to focus on wage growth and this drove the dollar higher.

We are in a very steady market. Stocks are good and dollar is the currency. Sometimes we do not need much analysis and that is true now. I see this trend continuing for a while and my initial target on the DAX still holds at circa 11,800.

Euro starting to slide and we all know that QE is coming so play it from the sell side and you will do well.

There were two straddles yesterday but I was on tour so I do not know how they fared.

Today we have CPI in Spain at 8am and Italy at 10am. You can try a straddle on the IBEX and MIB.

We should get a fade trade in the DAX also.

See you in a week.

 

 

Latest Trading Strategies:

Dax Fade Trade.

This trade is working really well, mainly because there is no big news story to make the first DAX move a big one. Some days the trade is only worth 20/50 points but it is happening frequently. Good way to make money in a quiet market.

We have noticed that after the initial 8am market move the DAX is reversing that move on a consistence basis. Look to fade the initial market move either higher or lower after the first 15/30 minutes. Unlikely to work on days where there is a big story in the market (rarely at present) or where my condition call is Hurricane. Trade is worth 40/80 points.

 

Dow/S&P Gap play from below.

A downside gap occurs when we have bad news in Asia or Europe so we are not getting many at present. However if one does present itself the chances of success are very high.

The gap play has a high success rate when traded from a down gap. Look to set trades between 11.30am to 12.30pm. Be careful if there are major news releases in from the US at 1.30pm. Market may wait until then to start the move. If the gap close has not completed by 3.30pm square up.

 

Straddle Trade.

I am looking to use the straddle trade technique for the next few months. I think the market conditions are perfect for this technique. I will recommend trying the straddle on various economic releases some in unusual products. Remember 20 point stops are the norm although on some of the products I may recommend more. I am hoping for feed-back from other traders who are using this technique. I will update the strategy from the calendar each day.

 

 

Wall St (DFB)

Just a simple buy on any dip. Levels are tricky because of the continuous new highs..

 

 

Conditions: Choppy Resistance: 18,350 Support: 18,150

 

 

S&P Mar Future

As above

 

Conditions: Choppy Resistance: 2,2150 Support: 2,150

 

 

DAX (DFB)

We are just flying higher. Need to go sideways at some stage because the rally has been stellar. Still some way to go however.

 

Conditions: Choppy Resistance: 11,400 Support: 11,200

 

 

FTSE 100 (DFB)

RBS knocked the stuffing from the rally and we are now range bound for a bit..

 

Conditions: Choppy Resistance: 6,970 Support: 6,935

 

 

EUR/USD (DFB)

Big hit to the down side due to US figures. Sell on rallies.

 

Conditions: Choppy Resistance: 1.1300 Support: 1.1100

 

 

USD/JPY (DFB)

Still firmly range bound..

 

Conditions: Calm Resistance: 120.00 Support: 117.00

 

 

AUD/USD (DFB)

As above, there is easier money in this market.

 

Conditions: Choppy Resistance: ..8000 Support: .7630

 

 

GOLD (DFB)

We are holding in around 1200 level. Not much going on at present and more fun to be had on indices and the Euro. Would buy on a break to 1185.

 

Conditions: Choppy Resistance: 1225 Support: 1180

 

 

SILVER (DFB)

As above, would buy on a break lower using the 1180 level on gold as my trigger.

 

Conditions: Choppy Resistance: 16.50 Support: 16.00

 

 

Market Conditions

Potential Moves:

  • Calm = 20/50 pts
  • Choppy = 60/80 pts
  • Hurricane = 100+ pts

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