IIFT Daily Note with Peter Brown

Tapering concerns dominate

Posted by:  |  Time: 7:50 am  |  Topic:  |  Comments: 4
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The slide in equities are purely down to the tapering debate. Most expect it to start in September but how much and how quickly. Bernanke want’s tapering to start before his term ends. This will be his measure of success. How much he is willing to gamble with the tentative recovery in the US economy we do not know.

So the market is set to be nervous for the comming weeks. Overnight the Japan story had an interesting twist. Abe suggested a corporate tax cut (which would be equity positive ) but then it was denied.

We start this morning on the soft side and at recent support levels. We need to see some price action in Europe to see if we can break this support. Overall the market is a sell on any rally and this should last for the next few weeks.

Levels this morning are. 1695  1688  and big support at 1672                                        Euro 1.3320  1.3260  1.3235

4 Comments

Kevin

August 15, 2013

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Would you have any concerns over US stocks given that the 6th hidenburg omen has occured in the last 8 days?

I enjoy your daily comments.

Kevin

    Peter Brown

    August 15, 2013

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    Hi Kevin,

    Yes I would, there are a lot of fund managers up good money this year. Should they take profit?
    This sort of market weakness makes them nervous.
    So be careful on the buy side

    peter

Herbie

August 16, 2013

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Peter, I had a look @ forexlive for a possible reason for the fall of the euro @ 13:30 and the sharp rise @ 18:00, but could not find anything, if anything, I would have thought that the USD would have fallen@ 13:30 because of the bad PPI numbers. Bullard’s speech was only @ 18:20, but the USD already fell @ 18:00? And High inflation will hit both Europe and USA, so… they should not have moved…

Peter Brown

August 16, 2013

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Hi Herbie,

You are right. What we have here is the last of the summer markets. Thaey are thin and manipulated. These moves are hard to understand. We will be back to normal in September.
This is why most traders just ignore August and go on holidays. Something to put in the memory bank for years to come

Peter