Wednesday, November 03, 2010

Emini Futures Rally On Election Results And FOMC Statement

(QQQQ)(DIA)(SPY)(GLD)($SPX)  

from the trading desk of CFRN... 

The Stock Indices responded well to the Election Results and the Federal Open Market Committee Meeting statement! The E-Mini S&P 500 initially dived at 1:30 after the FOMC Statement and the Election results were in to $1179.50. It was almost the close by the time the market digested the effects of the reports and considered them friendly to the commodity markets. We rose to a high of $1198.00. The Fed decided to hold the rate target at .25%, to stay low for the “extended” period. The Committee commented on purchasing $600 Billion in Treasuries by the end of the 2nd quarter.

Previous expectations were more in line with $500 Billion. They added that they will have the ability to review the stimulus and adjust it according to our employment numbers. The Election results will take longer to manifest in terms of possible changes in policies. One may think that the Republican House may draw more concern from the deficit and the fate of small business in America. It is the growth of small to medium business in the US that has taken us higher to become one of the most respected nations economically going back through history. Perhaps, we need to find our strengths and core US values to ascertain the previous greatness that we enjoyed. Other nations held and purchased our debt instruments in the past and the weaker US Dollar certainly does not give us any advantage in our foreign relations. It may help our export numbers as US goods become cheaper to our foreign neighbors, but certainly the stronger dollar is viewed as outwardly detrimental to trade practices abroad.

The E-Mini S&P 500 spent most of the session at or near our CFRN Weekly Trade Zones of $1188.00 - $1189.00 and $1184.00 - $1185.00. The sprint into the close just missed our highest Weekly Zone at 1199/1200. With two trading days left in the week we won't rule anything out just yet. While rare, we reiterate our opinion that a break and hold outside of our Weekly Trading Zones would indeed be good news for the market in general. As my Dad used to say, "sometimes you just need to take it out on the highway and blow the smoke out of it". Giddy-up!


S&P 500 Emini Futures / ES


After the price action today a retracement would be in order. Any underlying support could be at the CFRN Weekly Trade Zones of $1188.00 - $1189.00 to $1184.00 - $1185.00.

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