IIFT Daily Note with Peter Brown

We may have put in a short term high.

Posted by:  |  Time: 7:32 am  |  Topic:
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Stocks rallied hard on the back of a poor NFP figure yesterday. This was the old ‘no taper’ reasoning. However this figure was poor and not affected by the government shutdown. The next one will be and is likely to be lower. This shows the fragility of the US economic recovery. Some commentators are now starting to question the value of these stocks and whether we are in bubble territory. We have sold off sharply since the top yesterday. Chinese bank worries being the main catalyst. However today’s session will be key. We may see a deeper correction and a little bit of reality. I am not buying into the crash theories but we may have seen the top for a while.

On the Euro my target is up to 1.4000  the dollar is damaged and I see little in the way of support for the greenback in the short term. Euro is strong even against the JPY so buy all dips in EUR/USD.

Levels today are S&P (DEC) 1750  1736   DOW (DFB) 15460  15370  Euro 1.3800  1.3745

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