Wednesday the Federal Reserve released the Beige Book, their report of “anecdotal information on economic conditions.” Yesterday’s release indicated that all twelve districts reporting “modest or moderate” growth. In Fed speak this is an improvement from the previous release, citing economic growth “at a measured pace.” This could register another sign that the economic recovery is continuing.
Yesterday’s CPI (Consumer Price Index) number came in at the consensus of 0.0%, and 0.1% for the core. This is a sign that inflation is minimal, allowing the Fed to shift its attention to other issues like the unemployment rate. Although neither report is particularly great news, it is good enough for the market to continue with its bullish sentiment.
The positive news continued this morning. Housing starts were up 12.1% to 954,000 in December, the highest level since June 2008. Weekly Jobless Claims came in at 335,000, down 37,000 from the previous week. This data might give the bulls enough fuel to break 1475, a level the market hasn’t seen since September 2012.
It’s hard to go against the trend here, 1475 should be a critical level. I like playing the market from the long side today. Look to buy the March E-Mini S&P 500 from 1466-1468. I like covering near 1474-1475. Aggressive traders could look to see if the market can break through 1475 and see how high the bulls can take it. If the market sells off and support fails, I would exit any long positions if the market breaks 1460.
The best traders are consistent traders. Manage your risk carefully and come back to trade again.
