Thursday morning brought us Jobless Claims, along with a bit if a surprise. Most market watchers were looking for a consensus of around 325,000, with a wide range of 315,000 to 350,000. Most of us were surprised to see the number come in at 368,000.  The holiday season can make it difficult to interpret this type of data. One thing that does not need to be interpreted is that claims are at highest level since the government shutdown in October.

The Fed has indicated that they will rely on a constant data stream to dictate their “taper” view. Although this week’s Jobless Claims number wasn’t good, I don’t think it will alter their current outlook. I think the Fed has a current “soft” target of late first quarter 2014 to start cutting back on its asset buying program.

THE TRADE

The S&P has enjoyed quite a run this year. I expect to see some profit taking take place over the next few weeks. With eight days until expiration, I like selling the December E-Mini S&P 1820-1830 call spread at 14 point ($700) credit or better. The maximum risk is defined to the difference between the strikes at 10 points ($500.00). I don’t expect this market to put in a new high before year end, as money managers and retail investors are looking to settle up their positions before the year is over. I am looking to take this spread all the way into expiration on December 20th.

GRAINS WEBINAR

For those interested in grains, Walsh Trading’s senior grain analyst Tim Hannagan will be holding his weekly webinar series this Thursday at 3pm Central. Tim is the #1 rated grain analyst per Reuters and Bloomberg for his most accurate price predictions for corn and soybeans in 2011 and 2012. If you cannot make it live, recordings will be sent to your email and signup for both live and recorded here.

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.