IIFT Daily Note with Peter Brown

What the hell is going on ?

Posted by:  |  Time: 7:26 am  |  Topic:  |  Comments: 1
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We have turned a bull market where traders were hovering up any asset with yield and any stock, to a market where we won’t touch anything. Why? because at some point in the future QE may end and the Japanese may not do enough QE to give us a one way bet. The market is behaving like a spoilt child. Fundamentals are no different than when the S&P was surging towards 1700.

There is a great lesson here. THE MARKET TRADES ON SENTIMENT, NOT ECONOMIC FUNDAMENTALS. This is why economists find the short term market movements so confusing. The volatility in this market is crazy. We are trading in a hurricane.

The strategy to trade this market is simple as I have said before. Because the outlook is unpredictable and the volatility so high, restrict yourself to 75 points max loss per day. Therefore if you got it wrong yesterday -75.  No problem. If you got it right  150+  Simples!

As for today, no clue whatsoever.  Looks a bit low and there is a double bottom at 1597    So we may get a bounce but be careful.

Levels are wide  S&P  1620  1597 1589   Euro  1.3400  1.3325   USD/JPY  some support at 9305 !

Remember 75 points budget you’ll do ok.

One Comment

Ross

June 13, 2013

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Perhaps the spoilt child has finally reaches puberty. The realise the world is not all win win, everyone gets a prize mentality. About bloody time too.