Thursday, October 07, 2010

Emini Futures Trading / Markets Look To Unemployment Report

From the Trading Desk of CFRN...
Initial Jobless Claims fell by 11,000 to 445,000 just slightly below analysts expectations. Retail sales came in better than expected as “back to school” shopping stimulated activity. US Consumer Credit was reported to be decreasing as credit card debt continues to shrink. With the optimistic government reports, traders experienced 2 sided trading. The E-Mini S&P 500 initially had a knee jerk reaction to the bullish news at 7:30 and rose to the high of the day $1163.75 by 7:50 just shy of the CFRN Weekly Trading Zone at $1165/66. Without follow-through, the market edged lower perhaps with jitters looking to tomorrow’s Unemployment Report or the Meeting of the G 20. Jean-Claude Trichet, European Central Bank president, had stated that we must ease Global currency concerns or perhaps duplicate some of the errors of the “Great Depression”.    (What makes a Depression Great anyway?)
Concerns are that some countries have weakened their currencies to take advantage of export trade as less may be paid for the goods of the country to increase their sales.  By 11:35, we reached the lows of the session at the $1147/48 Weekly Trading Zone. The European Central Bank created some volatility in the marketplace by putting pressure on the Euro Currency, which bolstered the US Dollar. The Gold Market and Crude Oil both experienced selling pressure. Gold traded a wide range $1326.50 to $1366.00.  A reversal looks imminent for the Gold Market as the RSI and Stochastics are pointed lower.
Market Sentiment appears to favor the Federal Reserve coming out with statements that hint at bolstering the recovery with an influx of hundreds of billions of dollars. If the Fed continues to print recovery dollars, we may find the market trading substantially higher. As to the wisdom of such economic policy, we can only refer you here.

S&P 500 Emini Futures / ES
So how will the Unemployment Report affect the market? Support for the December E-Mini S&P 500 futures contract appears to be the $1129/1130 Weekly Trading Zone. Even better support can be found at the $1117/1118 Zone. If the Unemployment Report is bullish, we may see the $1165/1166 Zone or even higher tomorrow. Keep in mind that better than expected numbers on Jobless Claims today did gap the market higher on the open by 5 points but that was quickly shrugged off and the market turned negative in the first few minutes of trading. We did rally into the close however, after a Goldman buyer stepped into the pit and other traders reluctantly it seemed, sheepishly followed suit. Any action below the $1135/1136 Weekly Zone has the potential to change the bullish sentiment into a bearish momentum trade. The US Dollar has been oversold and is due for dinner and a dance. Fridays can be a tricky as traders may often liquidate positions prior to the weekend and watch for overseas news that can impact our markets on the open, Sunday Evening.  Speaking of overseas news - Have a great Columbus Day on Monday. 
  • Watch your thoughts; they become words. Watch your words; they become actions. Watch your actions; they become habits. Watch your habits, they become your character. Watch your character; it becomes your destiny. - Unknown 

Pray Hard & Trade Safe!

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