IIFT Daily Note with Peter Brown

This is going to be volatile.

Posted by:  |  Time: 7:35 am  |  Topic:
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Yesterday gave us an insight into how these market will react over the next few days. 100 point moves will be common. We are waiting on a deal but have no idea when it will arrive. The market is shooting up and down on bits of news. I still think a deal will be done but as we get closer to the deadline we can expect a ,kick the can, type of solution. This initially will cause a relief rally but in reality a lot of damage has been done. The US market and indeed the reputation of the dollar has been weakened. I suspect that after the initial rally the market will focus on the damage that has been done. So it is a buy the rumor sell the fact trade.

Trading in this market is crazy, frankly. Nobody knows what is comming next. I am using a very small stop strategy. 20/30 points max. When I am wrong it is small but if I catch a move I can make 100 points. This gives me a cahnce to make money with a 25% win ratio.The important issue is not to pay away big points.

Levels today are  S&P (DEC) 1706  1691  Wall St (DFB) 15270  15150  Euro 1.3580  1.3480 strong support

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