Many people have made plans for the summer. Family trips, sports tournaments, camps, and many other events take time to plan. Don’t forget to plan for a move in the markets. You may be taking time off for some fun but the marketplace doesn’t get a vacation.
Economic Data
Thursday morning brought a bit of good news- bad news reporting as far as government data is concerned. The good news is that Jobless Claims fell 27,000 to 300,000 for the week ending May 24. The consensus forecast range was 315,000 -325,000. The bigger news may that the four week average fell to 311,500, the lowest level since August 2007. Both of these numbers could be an indication that the labor market is continuing to strengthen.
Now for the bad news. The GDP (Gross Domestic Product) fell 1% for the first quarter, down from the previous 0.1% gain. This was the first time the economy has shrunk since the same period in 2011. Several observers threw the weather theory out again as a possible reason for the decline. The weather has become the dog ate my homework line for any bad economic data this year. The contraction may be short lived, as current numbers look to be improving in the second quarter.
E-Mini Trade
The GDP number didn’t knock the S&P 500 down for long. The index took continued to move higher after the dust settled. We have talked about the S&P trading to 1900, and now the index has run through it, now trying to reach 1925. I think we can get there, but I am looking to fade the market here a bit and get some protection against a sell off. I’m looking to buy the June E-Mini S&P 500 1900-1850 put spread at 9 points ($450.00) or better. Risk is defined to the cost of entry plus fees and commissions. If we get the market going our way, I am looking to exit at the 25 point level.
Webinar
For those interested Walsh Trading is holding our weekly grain webinar series Friday May 30th at 3pm central time hosted by our Senior Grain analyst Tim Hannagan. Tim has been ranked #1 by Reuters and Bloomberg in 2011 and 2012 for his most accurate end of year price predictions for soybeans and corn. Registration is free and if you cannot attend live, a recording will be sent to your email upon signup.
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.
