Larger than expected jobless claims gave the stock market a bit of a shake this morning. Claims came in at 439,000, an increase of nearly 78,000 from the previous week. Labor Department officials attribute the large increase in part to Hurricane Sandy. There was a large increase in claims in areas directly hit by the storm. The storm destroyed and damaged many businesses, and many areas were out power for an extended period. More applications were filed after an initial delay as government offices began to reopen. This was the biggest increase in claims since 2005 following Hurricane Katrina.
The market seemed to have possibly accounted for the effects of the storm, the Dec E-Mini S&P only saw a four point sell off. That sell-off tested the 1350 level, a place the S&P hasn’t seen since the beginning of August. The market has continued to sell off from the October high of 1466. The market has a bearish feel, but will need some help to continue the downward trend today.
KEY LEVEL
Keep an eye on 1350. We may see strong support there through the session. Short term resistance should show up near 1360. I like trading the range today. I like getting long near 1350 if the opportunity is there. Look for an exit near 1358. If the market can push through resistance at 1360, the next push should be to the 1365-1367 area.
BIG DAY, MANAGE RISK
There is a lot on the schedule today. Several Federal Reserve Bank Presidents are speaking throughout the day. Fed Chairman is scheduled to talk at 1:20 PM ET. Any of their comments could potentially spark a reaction in the markets, so be prepared to manage your risk wisely.
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.
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