IIFT Daily Note with Peter Brown

We will get new equity highs?

Posted by:  |  Time: 7:47 am  |  Topic:
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Quiet day yesterday as the Us market was closed. We start today close to all time highs. Hard to justify why we are here, certainly not via economic fundamentals more to do with zero interest rates. Are we set for some new highs? Well it must be tempting for the market seeing as we are so close but I feel this rally is soon to end. Not much to drive the market lower but a level around 1800 would probably be more appropriate. Given the volatility we see in the market that could happen quite quickly. Issue in Germany and Italy are concerning but not that serious. In fact we are d3evoid of any big news story at present. So the market to settle at lower levels is my call.

Elsewhere a bit of dollar strength against the JPY. Euro also looks too high at these levels and we may see a correction towards 1.3650 soon. Gold also looks too high at 1330  may see small sell off there. Basically I am calling for a small reversal from these rallies. Nothing major. May try new highs first but expect lower by week end.

Conditions to day are Choppy

Levels are Euro 1.3750  1.3725  1.3680  1.3650  S&P (MAR) 1846.50  1833  Wall St (DFB) 16220  16160

 

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