IIFT Daily Note with Peter Brown

Surprise rate cut leads to high volatility.

Posted by:  |  Time: 7:38 am  |  Topic:  |  Comments: 5
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Well yesterday was crazy. Not so much in Europe where Mr Draghi gave us a .25% rate cut. Did not see that coming so quick. The normal is waiting a few months before doing what is necessary but Mario is showing an ability to be pro-active. Low interest rate for a long period, easy monetary conditions will keep the Euro low. Certainly his actions reflect how concerned he is about growth in Europe.

In the US it was utterly mad on the markets. Growth figures out performed and rallied the stocks. Why they crashed from the high is anyone’s guess but they did. This should finally put a top on the S&P for the year.

This morning we are faced with a downgrade to France! NFP out later.

This market is going to be very volatile so be warned. Direction is unclear but movement will be large. Keep losses to 100 points at most.

Levels today are  Euro 1.3440 small resistance 1.3300  support  S&P (DEC) 1760 1742   Wall St (DFB) 15740 15575

Level are not great today and very wide. This is a seat of the pants trading day. Be careful.

5 Comments

susan moran

November 8, 2013

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Peter

Support level for Dow must be wrong – assume you mean 15675

susan moran

November 8, 2013

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oopss 15575!

Peter Brown

November 8, 2013

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Hope that not a Freudian slip. sorry

updated now

Peter

Ross

November 8, 2013

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Let’s see how the DOW reacts. Will it hold? Anyone’s guess.

Terry Pierce

November 8, 2013

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Typical slow start to the morning session ahead of the big number due out this afternoon. I expect to see a poor number off the back of the US government shut-down in October and a potential moderate up tick in the unemployment rate. In that case we will assume that we should get the ‘Bad news in good news’ play.

However I do feel the US markets are beginning to look past the QE ideology and investors want to start seeing an improving economy rather then a QE fuelled economy. Only time will tell