This morning’s positive news contrasts to yesterday’s earnings reports. Apple reported sales numbers that were below expected targets. IPhone sales numbers also came in below expectation. Apple shares were down over 10% after reporting. Because of Apple’s size in relation to the market (10% of the NASDAQ), and widespread ownership, there can sometimes be a spillover effect on the rest of the market. Positive reports from Netflix and a few others may have helped balance out the Apple news.
Jobless claims came in 5,000 lower this morning to 330,000. Not quite as large of a drop as last week (37,000), but it does bring the weekly number to its lowest level in five years. The four-week average is down over 8,000, coming in at 351,750, the lowest level since March 2008. Numbers like these may give investors a sign the economy is potentially in active recovery mode.
KEY LEVELS
I believe the market still has an overall bias to the upside. The S&P 500 briefly traded above 1490 yesterday. The market seems to be drawn to 1500, but, in my opinion, it may take a while. The 1490 level has been broken, but is still serves as resistance.
THE TRADE
Today I am looking to be a buyer on breaks to the 1488 level. Ideally I would like to get long between 1485-1486. My target exit is from 1496 to 1498. Aggressive traders could hang in to see if the market can push through the 1500 threshold and rally on. Watch closely if the market breaks down to 1480. Any trading below 1480 could possibly trigger a reversal and a strong sell off.
THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES. A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.
