What a difference a week makes. Seven days ago we were awaiting action from the Fed, and they delivered as expected with QE3. Yesterday the Bank of Japan joined the ECB and the Federal Reserve, adding 10 trillion Yen to their asset purchase program. The market has seemed to enjoy this buying influx so far.
MARKET RECAP
The S & P 500 continued to rally potentially due to the Fed’s decision to add more quantitative easing. The December E-Mini topped at 1468. We’ve come down a bit, but have held above the 1450 level for most of the week. Jobless Claims were lower this morning at 382,000 versus last week’s 385,000, but the four week average rose to its highest level in 3 months. We saw mini S&P 500 (ESZ2) break the 1450 level, and it has been in a short term sell off.
TESTING DOWNSIDE SUPPORT
The market broke through another short term support near the 1447 level. I am looking for the ESZ2 to continue to test support to the downside. I’d like to be a buyer between the 1439-1443 levels on a further push down. 1450 may be new short term resistance, I’d be happy to cover any long positions near there.
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.
