The Asian markets closed mostly down and Europe is trading mixed. First off we have a load of economic numbers to get past today. Second, in two days there has been over $5.5bil for sale just between the Dow and the SPX. That is a huge amount of money. On one side I see the selling but on the other side the S&P futures have closed higher two days in a row despite the big time selling. So what’s that saying?
Yesterday they finally ran the 1689.00 to 1693.00 buy stops. The spoos looked great until we turned on the MIM and got an early glimpse of $700 million for sale. That alone could have knocked the spoos down but when when the $4.3 billion in SPX showed up for sale it was lights out London with a 12-handle drop. Even then the S&P bounced back up on the futures close to settle higher on the day.
Like we said yesterday: the S&P isn’t going up or down right now. The only change in the wording of the Fed announcement was regarding higher mortgage rates. What we do know is that 1670-1675 is support and 1690-1694 is resistance. Above and below are where all the stops are.
While we are still bullish, all the MOC selling is starting to scare us a bit. According to the Traders Almanac the S&P has shown a tendency to see strength into early September. We again lean to selling the early rally and buying weakness with tight stops.
As always, pay attention to the 10-handle rule and please use stops when trading futures.
It’s 5:30 a.m. and the ESU is trading up 13.20 at 1,693.70
In Asia, 9 of 11 markets closed higher: Shanghai Comp. up 35.27(1.77%), Hang Seng up 205.13 (0.94%), Nikkei up 337.45(2.47%) .
In Europe at 5:30 am CT, 10 of 12 markets were trading higher: DAX up 99.64(1.20%), FTSE up 25.73(0.39%).
Today’s headline: World markets rally after Fed statement
Total volume: 1.98mil ESU and 11k SPU traded
Economic calendar:Motor Vehicle Sales, Challenger Job-Cut Report, Jobless Claims, PMI Manufacturing Index, Bloomberg Consumer Comfort Index, ISM Mfg Index, Construction Spending, EIA Natural Gas Report, Gallup US Payroll to Population, Fed Balance Sheet, Money Supply.
Earnings from AstraZeneca, ConocoPhillips, ExxonMobil, P&G, Royal Dutch Shell, Barrick Gold, Cigna, Clorox, Time Warner Cable, AIG, Kraft Foods, LinkedIn, Leap Wireless