IIFT Daily Note with Peter Brown

Volatility Continues.

Posted by:  |  Time: 7:42 am  |  Topic:
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Oil moves are causing all the volatility in the market. The fact that there is such an exposure to the sector and the worries that some companies may go bust, or indeed half the industry is making everyone jumpy. Add to that thin yesr end markets and you can explain yesterdays Jeckill and hyde performance. More of the same again today I am afraid. Mood trading because I have no clue which way this will break, In reality the index markets look sick on the charts but it is a Friday and a rally cannot be ruled out. Maybe a day for Christmas shopping. Go with the flow but it is hurricane markets and the last thing you want is to ratchet up losses in this crazy market before year end. DAX fade should work but we careful it may be volatile also. Hurricane conditions continue.


Latest Trading Strategies:

  1. Dax Fade.

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.

  1. 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.

  1. Looking for a major depreciation in the Eur/USD. Towards 1.1800 eventually. I am now selling and cashing as a strategy. I will not buy the pair anytime throughout this play.

Wall St (DFB) At one stage we rallied well yesterday and then the market fell over. No confidence out there and the oil price is lower overnight. Could break anyway. Same resistance levels in place supports are a good bit lower.

  Conditions: Hurricane Resistance: 17,600 Support: 17,400


  S&P Dec Future As above.  

Conditions: Hurricane Resistance: 2,036 Support: 2,016


DAX (DFB) Market can go either way. No better than a 50/50 call.  

Conditions: Hurricane Resistance: 9,860 Support: 9,635


FTSE 100 (DFB) The oil price fall is killing the FTSE and again late last night it got mullered. While oil is under pressure the FTSE remains offered and cannot bounce.  

Conditions: Hurricane Resistance: 6500 Support: 6350  


  EUR/USD (DFB) The dollar found a bit of strength in afternoon trading. Euro looks heavy and a move lower is likely. Good resistance at 1.2460  

Conditions: Choppy Resistance: 1.2460 Support: 1.2345    


USD/JPY (DFB) We found a bottom and rallied hard. 119 is now the pivotal point. Buy on dips, with support around 118.00  

Conditions: Choppy Resistance: 120.00 Support: 118.00  


  AUD/USD (DFB) Aussie no different and a retracement on the weaker dollar. This is not a trade in this market. If you are going to buy dollars down here do it in a less volatile pair.

  Conditions: Choppy Resistance: .8350 Support: .8200  


  GOLD (DFB) Gold has found its ranging boots. Below 1220 looks cheap and above 1250 looks too high. Brave trading in this market however.  

Conditions: Choppy Resistance: 1250 Support: 1220


    SILVER (DFB) Very similar to Gold. So I prefer the gold trade..  

Conditions: Choppy Resistance: 1730 Support: 1690    


Market Conditions Potential Moves:

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

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