The Federal Reserve has about as much faith as I do that Congress can keep their mouth shut. After realizing that the FOMC minutes were “accidently emailed” Tuesday to Congressional employees (along with some trade lobbyists), the Fed released the minutes ahead of schedule Wednesday morning. Aside from the unusual circumstances of the release, there may have been some further insight to the Fed’s asset purchase program.
Most Fed members support continuing with the program through the middle part of the year. A larger number than previously thought were in favor of slowing down the program gradually, along with a few looking to slow it down in the third quarter. This news was not enough to stop the S&P 500 index from putting in a new contract high at 1586.
THE TREND IS YOUR FRIEND
It is hard for me to fight against the upward trend. If you are a believer in this bull market, you may want to play it with a call spread. I am looking at a June E-Mini S&P 500 1600-1620 call spread. Try to get in at points ($400) or better. Risk would be cost of entry plus commission and fees on the trade. June E-Mini S&P 500 options expire on 6/21/13 so we have quite a bit of time left. I am looking for a target exit at 16 points or better, aggressive traders may want to stick around for the full 20 point maximum allowed by the spread.
Not all trades are good for all traders. Be sure and assess your risk tolerance on a regular basis. In a zero sum game, the only person looking out for you is you.
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. 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. 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. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS.
