Thursday, October 14, 2010

Emini Futures Trading / Jobless Claims Rise

(QQQQ)(DIA)(SPY)(GLD)((.SPX)

from the trading desk of CFRN...
This morning the Initial Jobless Claims had risen 13,000 to a higher than expected 462,000 people filing new claims for unemployment. At 7:25 AM CST, the E-Mini S&P500 was trading at about $1178.25 and by approximately 2:00 PM CST, we were around $1163.50. We went through the CFRN Weekly Trading Zone levels of $1167 - $1168. By the end of the session, we were back to the $1174.00 levels. The US Dollar weakened as Singapore allowed its currency to strengthen and the anticipation of the Federal Reserve increasing their stimulus. Singapore is pretty much the bellwether of the Asian Currencies. The drop in the US Dollar Index was supportive to the Stock Market and many tangible commodities as it allows foreign investors to purchase more with their currency. Our banking system and mortgage banking sectors are under fire as issues such as the “foreclosure moratorium” are in debate. 

Uncertainty and fear are still in the marketplace, but traders simply adjust their strategies to take advantage of the short-term moves that the markets offer. Interest Rate Futures fell today as investor money poured into some of the other currencies, metals, energies and back into the Stock Market. Tonight, we have a series of Foreign Economic Reports due out. Tomorrow, we have Business Inventories, CPI, Real Earnings, New York Empire State Manufacturing, Retail Sales and the University of Michigan Consumer Report. Friday’s can also be liquidation days for traders covering their positions prior to the weekend.

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S&P 500 Emini Futures / ES
The Weekly range for the S&P500 has been $1181.00 - $1151.75. We have an interesting formation on the Daily ESZ10 Chart at the $1181.00 level. Is this a double top? Is this a pause in the midst of another leg up? The RSI at about 73 tells us that this market is approaching overbought levels. The next CFRN Weekly Trading Zone to the upside is $1193 - $1194. Fund buying may push the market up. Consumer Sentiment may show progress in the recovery and economic feelings of growth and repair. On the other hand, today we failed to make new highs and fell back to our CFRN Weekly Trading Zone of $1167 - $1168 and beyond. The next downside CFRN Weekly Trading Zone is $1156 - $1157.  

A worst case scenario could eventually take us back to fill the gap in the Daily ESZ10 Chart at $1104.00. The market seems supported by Fed comments coming over the wires keeping the outlook positive with their safety nets. It would take a perfect storm to create that downside action.

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