The start to October brought a change of season along with a government shutdown. During the sixteen day shutdown, all data and numbers released by the different government agencies was dormant. This can cause serious obstacles for market participants who rely on that data. If you are one of those people who was longing for news from the government, you must be happy this week as we get the data flow back on “schedule.”

We received quite a bit of news on Thursday morning, some expected, some not. The GDP climbed 2.8% for the 3rd quarter, above the consensus expectation near 2%, and higher than the previous 2.5%. Another surprise to most observers was the ECB announcing a rate cut. The ECB lowered its benchmark “refi” rate a quarter of a percentage to .25%. Some market watchers had been looking for the ECB to take action amid concerns of an over-valued Euro, but not this quickly.

Jobless Claims gave us their first non asterisk report since early September. Previous reports had to be viewed with a filter, accounting for computer counting issues in a few states, and the government shutdown.  Claims fell 9,000 to 336,000, right near the expected 335,000. These numbers appear to show a fairly stable but slow growing jobs market. All eyes now turn to Friday’s employment situation numbers.

We know a few things ahead of tomorrow’s numbers. The taper can has been kicked down the road for a while, so the Fed will continue to print money at a high pace. Eleven months into the year, I feel this stimulus continues to flow into the stock market. Investors have been getting good returns under current conditions, so I don’t see a change coming anytime soon.

E-MINI CALL SPREAD

I like going with the trend here, and playing the continued rally. The Dec E-Mini S&P 500 is currently trading near 1770. I like buying the Dec E-Mini S&P 500 1800-1850 call spread at 10 points ($500.00) or better. We are limiting risk to the cost of entry plus fees and commissions. A continued push towards the 1800 level should see an increase in premium. I am setting my first target exit at 20 points. I don’t expect the S&P to be trading at 1850 by expiration, but I think it can push above 1800. If this rally stalls or reverses, look to exit for a maximum 5 point loss.

We are in the home stretch for the trading year. It’s not a bad time to take a look back and see how your trading has done. Are you near your goals that you set for yourself? Often traders think in macro terms, but it can be hard for some to trade that way. If you stick to your plan and follow the paint by numbers model, you will have a nice big picture at the end of the day.

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.

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