IIFT Daily Note with Peter Brown

Straddle Day

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Good Morning All,

(Niall here filling in for Peter who will return next week)

Well today will be an interesting day which I will get to in a moment. Just to look at yesterday first, the day went pretty much as expected. US and German Indices continued to be subdued with very little news out there. With the markets overbought and trading high it did not attract a huge amount of buyers. Many buyers are probably just looking for a pull back to a cheaper level but there is very little in the ways of a sell off. Just sturdy and flat for now.

What strategy can we use here? Same as yesterday, Peter’s High Frequency is one way to reduce the boredom if you are at your screens and looking to practice and learn new tactics. For the less frequent and more strategic traders, patience is a skill at these times. This is only for Indices really. We have had good movement in currencies with USD continuing is bull run for the week. Hopefully any currency traders out there have been going with the USD strong trend.

Today we will continue our focus as we have the last two days but we have a new addition. For me, today is all about the straddle. We have two very good Straddle opportunities for us so I recommend you prepare well for these. Straddles have been the most profitable strategy this year and has been beating my expectation for the year with 1 – 2 good straddles every week. We already had one on Tuesday and we have two today.

12pm – UK MPC Interest Rate Vote – Expectation is 7 to vote for no change and 2 to vote in favour of a hike. We could still a 6-3 or even a 5-4 shock which would send gbp through the roof. Based on Carneys comments saying a hike soon is unlikely, 7-2 does seem more likely but we never know. This is why we straddle it.

1.30pm US CPI – This has also been a market mover lately so I will also be ready at the helm at 1.30pm.

We all know if we get any scary news from NK at any stage that we leave the buy button alone for the day.

Thankfully not a whole lot to discuss on the news front so we can focus on Tech levels again today although many of the levels wer not even reached, it was so subdued.

See the breakdown of products for a bit more clarity….

On the calendar….

Yesterday:

Today:

12:00 – MPC Vote – Straddle either GbpUsd with 15-20pt orders or EurGbp with 15pt orders and you can allow a little touch more risk than normal here.

13:30 – US CPI – Straddle with 15-20pt orders on EurUsd or UsdJpy and you can allow a little touch more risk than normal here also if the Gbp Straddle works ok. If Gbp Straddle ends up with a loss then do not add more risk on to this.

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

Comments and questions to noconnor@iift.ie

 

Day trading picture 1

S&P (Rolling Daily)

Subdued 60pt range. Bias to the upside but looking for dips first. If you are buying at any support levels just make sure they are hold first and that it looks like other buyers exist at the levels you are getting in. Tight range on the levels, I feel either of these could be broken if the markets get punchy so be cautious.

Conditions: Choppy Resistance: 2500 Support: 2491.5

Wall St (Rolling Daily)

Same as S&P

Conditions: Choppy Resistance: 22,160 Support: 22,100

DAX (Rolling Daily)

Still watching the same resistance level which has held for a second day. Ran out of juice it seems. I expect we will get a pull back towards the 12,485 before we have another go at it. 3rd time lucky maybe. Bias is to the upside anyway but a small sell off first would not be a surprise. If we fall below 12,485 and stay down there then my opinion would change to a weaker bias.

Conditions: Choppy Resistance: 12,560 Support: 12,485

FTSE 100 (Rolling Daily)

This has flopped on its own and does not look good. I would be a seller looking at this, purely based on the pattern. Looks top heavy here and should fall. Resistance stays the same as yesterday.

Conditions: Calm Resistance: 7,410 Support: 7,340

EUR/USD (Rolling Daily)

1.2000 resistance held nicely, little surprised it wasn’t tested as it hit 1.1995. Now surprise on the dip lower as Usd bulls have control. No trade here for me now as we are trading at support. I will await the US CPI straddle for direction and hopefully some profit.

Conditions: Calm Resistance: 1.2000 Support: 1.1845 (if we dip further but sitting on a support here at 1.1880

USD/JPY (Rolling Daily)

USD holding on to gains and holding above 110. 110 was used as support in asian trade and it will be our support today. Careful of the 1.30 CPI though as anything could happen then.

Conditions: Choppy Resistance: 110.80 Support: 110.00

EUR/GBP (Rolling daily)

Unable to break the 8980 support so it looks like it has bottomed out. No trade here so it a wait until 12pm straddle for this market. I had a resistance of .9150 yesterday which was a typo (EurGbp range would never be that wide), .9030 is our resistance today.

Conditions: Calm Resistance: .9030 Support: .8980

GOLD (Rolling Daily)

With no NK issues and a bullish Usd Gold dropped lower and even went through the 1325 support. Based on this I am still not a buyer. IT is a sell on a bounce here but be careful at 1.30pm news.

Conditions: Calm Resistance: 1330 Support: 1317.5

SILVER (Rolling Daily)

Anyone taking the sell on silver with the stop behind 18.00 would have gotten their 2:1 hopefully. Today it’s much the same as gold, needs a recovery bounce before selling again. USD News at 1.30pm so I will be more focused on that today.

Conditions: Calm Resistance: 17.95 Support: 17.63

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