Overnight trading saw the December E-Mini S&P trade down to 1421.25, a level we haven’t seen in a month. It held that support level with a staircase like climb to 1430. Jobless claims came in 30,000 lower than the previous week (369,000), the biggest decline since July and lowest level since February 2008. The market always responds well to a little bit of good news.
BUY DIPS
The rally from the earlier part of the session saw the ESZ2 trade through resistance at 1435. I like playing this move from the long side, trying to buy dips in the 1432-1434 area. We could see the move continue to push towards 1438, with more resistance coming in near 1442. If traders but into this rally, we could see a 25 point range for the session.
WATCH RETRACEMENTS
I expect that the market will continue to push higher on the day, look for opportunities on retracements. A higher close would bring an end to four consecutive down days. It could be short lived as traders await PPI and Consumer Sentiment tomorrow morning.
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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