Be willing to take modest gains from the market. If you are looking to take away a big pot of gold, you are better off chasing leprechauns.
We are in the second week of the government implemented “sequester.” To date, the cuts have been minimal, and don’t seem to be affecting most Americans day-to-day lives yet. I believe further cuts will be coming as different government entities are forced to figure out where they have to cut back. On a personal level, I am disappointed that I will not get to hear the roar of the USAF Thunderbirds over the Chicago lakefront this summer.
The move forward to sequestration hasn’t seemed to slow down the markets. Both the Dow Jones and S&P reached levels we haven’t seen since 2007. The market also, in my opinion, seemed to like the job numbers as the June S&P put in a new high following the release of the data. Also, a better than expected retail sales number may have helped sustain the rally in the indices.
DON’T FIGHT THE TREND
I’m not going to fight the trend here. I am looking for the June E-Mini S&P 500 to push up to the 1560 level. I like trying to enter the market on the long side from 1551 to 1554. I don’t think it will be an easy run to the upside, look for resistance to come in near 1557. Aggressive traders could look to exit closer to 1560. I think it will take a few visits to break through the 1560 level, and I expect to find strong resistance there. If the market reverses, I would exit on a break to the 1550 level.
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. 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. 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.
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