Saturday, November 06, 2010

Emini Futures / The Juggler Has A Date With Destiny


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from the trading desk of CFRN...  

Too many balls in the air? The E-Mini S&P 500 hit a high of $1224.50 in Friday’s trading, but the US Dollar was up $ .71 to a high of $76.785 along with the metals and the energies. The US Dollar is typically inverse to the tangible goods. As the dollar weakens, the other products become more inexpensive to foreign buyers. Today, it was unusual to see the varied products all trading higher. The US Labor Department announced that Non-Farm Payrolls increased by 151,000. This was more than most analysts expected causing the markets to climb to new highs today. The report actually affected the US T-Bonds negatively creating a decline to 129^30. The safe-haven qualities of the debt instruments had little appeal in a recovery mode. One must ask “If the employment picture improves, will the US Stimulus remain or be revamped?”

The exhilaration of added stimulus this week could possibly wane should the Fed withdraw some stimulus. The S&P 500 has gone up about 16% since September, so how long can it continue? It all boils down to investor sentiment. Fear will drive traders to cover longs quickly and long-term bears are feeling the pressure holding their shorts. Sunday may reveal the direction depending on how the market reacts to the Euro Zone struggle with Ireland’s debt problem. If the E-Mini S&P 500 shrugs off the woes of our foreign neighbors to penetrate the $1225.00 area, we may perhaps forge some new highs next week. If concerns emerge regarding foreign debt, the US Dollar may strengthen and the Euro FX may turn down to sell off back into it’s previous ranges. This all could come down the line to weigh on the Stock Indices and give us a cap of $1224.50. Monday does not have any key economic reports, so the sentiment may carry the E-Mini S&P 500. 

S&P 500 Emini Futures / ES

The trend remains up, but any fears or jitters and traders may start to cover their positions to wait for further information to make sure the stimulus is intact and/or the Euro FX is stable. Look to $1225.00 for direction, the point of control or comfort level may keep the majority of bids/offers around $1218.00 

Destiny is no matter of chance; it is a matter of choice. It is not a thing to be waited for; it is a thing to be achieved. - William Jennings Bryan

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