Well the economy is still a bit frightful
A taper sounds delightful
Which way will the market go?
Let it grow, let it grow, let it grow

Chairman Bernanke is smiling
As equity markets are still shining
A stimulus plan reduction
Will allow the markets to function
It’s time to stand up on their own
Will they grow, will they grow, will they grow?

As the chairman finally says goodbye
Further taper questions are still coming
Ben cracks a smile
And says don’t ask me, ask Yellen

The taper will get keep getting bigger
Along with good job figures
All the traders really want to know   

When will rates begin to grow?

THE TRADE

We’ve heard the news from the Fed in Chairman Bernanke’s final FOMC conference. The taper is on the way. We also got a small glimpse of how the market may react to further cuts in the stimulus plan.

I like buying the March E-Mini S&P 500 1820 -1845 call spread at 9 points ($450.00) or better. Maximum risk is defined to the cost of entry plus fees and commissions. I am looking for a target exit at 20 points. If this run fails to continue into the New Year I would look to cut my losses at around four points.
This will be my final commentary for the year. Thank you for reading and have a happy and safe holiday season.

For those interested, please join us for our weekly grain webinar series. Walsh Trading’s senior grain analyst Tim Hannagan, who has been rated the number one grain analyst in the United States by Reuters and Bloomberg for his accurate price predictions for both soybeans and corn in 2011 and 2012 will be hosting.

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RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING.  THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT.  WHILE 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