Jobless claims jumped 46,000 this week (388,000), following a 27,000 drop (revised) last week. The unusual swing in the reports is a result of some states reporting end of quarter numbers a week late. With the unusual reporting, traders need to take a closer look at the four week average. That average comes in at 365,500, just 1,000 more than the previous week. This could be a sign that the economy is in a slow sustained recovery.
KEY LEVEL
The December E-Mini S&P is trading nearly 30 points higher than the lows on Sunday night. The bulls have taken every little bit of good news and run with it this week. After breaking through resistance and closing above 1450, I believe the market will need to stay above that level to sustain the rally.
SHORT TERM BUY SPOT
I’m looking for buying opportunities on retracement to the 1450-1451 level. Long positions should look to cover from 1453-1455. Traders looking for a larger gain can stay in and look to test resistance near 1457. It the market is able to push through 1460, look for new support to come in near 1453.
Manage your risk wisely, and come back to trade another day.
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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[Editor’s note: For beginning traders, the S&P 500 E-mini futures contract is one of the most actively traded financial futures. The smaller contract size (mini) versus the larger S&P 500 futures contract makes it less expensive to trade and more accessible to individual traders. An advantage of futures contracts is that it allows traders to easily go long (with a bullish outlook) or go short (with a bearish view). It is a very liquid contract, which means there is less likelihood of slippage. For traders looking for contract specifications, these are available on the CME website.]
