Thursday, November 04, 2010

Emini Futures Continue To Climb On Fed Stimulus


from the trading desk of CFRN...   
UP UP and AWAY! The Dow Jones industrial average reached its highest level in two years Wednesday after the Federal Reserve announced plans to buy $600 billion in Treasurys to stimulate the economy. The S&P 500, the measure most closely watched by professional investors, is still about 20 points, or 1.6 percent, below its high of the year. The technology-focused Nasdaq closed at its highest level for the year for the second straight day.

From start to finish the SP EMINI charged higher despite 457,000 workers filing for unemployment claims last week. The SP EMINI finished at 1218.50 or up almost 2% today which puts us at levels not seen since September 2008. The Fed’s intention to buy $600 bln of bonds by June is the driving force behind the move. At this point It doesn’t matter what the economic picture looks like or is perceived as long as the FED is in the picture the path of least resistance is to the upside. Yesterday’s news from the FED has shoved the Dollar Index to new lows against all the major currencies which is also driving commodity prices through the roof. Energies +2.14%. Gold and Silver +3.5% and +6.5% respectively, grains, soft’s and meats. 
That’s the descriptive stuff now the predictive stuff. What should one expect tomorrow?? The unemployment report is set to be released at 0730am cst. In my opinion it doesn’t matter what the Payroll Number is we're going higher. If the Unemployment report disappoints we might get a sell-off but I would view that as a buying opportunity. Why not? The FED will be there to catch us if we fall. Technically In the SP EMINI, I view the 1211/1210 level as support if we stay on the path that we're on. If the market wants to widdle out the “weak longs” then the 1206/1204 area should be viewed as support. On the other side of the fence, I would fade this market or sell the SP EMINI if we climbed to the 1224/1228 area the first time up. 

If you weren’t there you missed a good show. The CFRN listeners got to listen to Jerry LIVE! Jerry Thanks for stopping bye and pitching in I think the community benefited from your experience on the SANDBOX. 
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