Yesterday, the global markets closed weak and the S&P futures went along for the ride on the first day of the Federal Reserve’s two day meeting. The day’s trade was highlighted by some big name earnings (AAPL) and the Fed’s ongoing push to raise interest rates. On the cash close the Dow futures (YMZ15:CBT) closed down 37 points, or -.20% to 17515. The S&P futures (ESZ15:CME) closed down 2.25 point, or -.10% to 2060.50, and the Nasdaq futures (NQZ15:CME) closed up 14.5 points, or .30% to 4632.50.
Eco and Earnings Reports
For the most part it was a very quiet trading day. Early on, traders got a look at the September durable goods number, which did not come out very well. After being revised down in August, orders were down another 1.2% in September. Before the bell Ford (F) reported record profits and Apple (AAPL) beat expectations. IBM disclosed that it was being investigated by the SEC, and Twitter (TWTR) slid on revenue concerns.
All in all it was a quiet day. The ESZ15 only had a 12.50 handle range with 1.2 million contracts traded, compared to Monday’s 1.16 million contracts traded. One of the things that did stick out yesterday was the Dow Jones Transportation Average…it closed down -2.8%, or down 231 points. JetBlue (JBLU) disappointed, and railroad companies were down hard with Union Pacific Corps leading the way with a -4.9% decline.
Conclusion; The S&P futures have closed down two days in a row ahead of today’s statement from the Federal Reserve. JP Morgan’s chief market strategist, David Kelly, said he “doesn’t expect the Fed to make a move on interest rates until the December meeting.” MrTopStep still believes there will not be a rate hike in 2015. After the weaker than expected non-farm payroll number, the policy action by the Chinese, and Mario Draghi backing more QE, the S&P is having its best month in 4 years. While we can’t rule of some type of pull back, keep in mind that November is one of the top performing months out of the best six months for stocks. November is also known for big mutual fund inflow, and the ‘best 3 months for stocks November to January.’ But the real rally doesn’t start until the last two weeks of December, so keep your rally hate close, ESZ15 2085 is on TAP.
In Asia 10 out of 11 markets closed lower (Shanghai Comp. -1.72%), and in Europe 7 out of 11 markets are trading higher (DAX +.69%). Today’s economic calendar includes day 2 of the 2 day FOMC meeting, Bank Reserve Settlement, MBA Mortgage Applications, EIA Petroleum Status Report, 2-Yr FRN Note Auction, 5-Yr Note Auction, FOMC Meeting Announcement, and earnings by Amgen Inc (AMGN), Boston Scientific Corp (BSX), Buffalo Wild Wings Inc (BWLD), Coca-Cola Femsa Sab De CV (KOF), General Dynamics Corp (GD), Gopro Inc (GPRO), Hershey Co (HSY), Hess Corp (HES), La Quinta Holdings Inc (LQ), Lifelock Inc (LOCK), Murphy Oil Corp (MUR), Norfolk Southern Corp (NSC), Northrop Grumman Corp (NOC), O’Reilly Automotive Inc (ORLY), Occidental Petroleum Corp (OXY), Suncor Energy Inc (SU), Valero Energy Corp (VLO), Yelp Inc (YELP), & others.
Don’t Forget About the Halloween Rally
Our View: The ESZ finally ran some downside sell stops, and most of the selling was tied to nervous longs concerned about what the Fed was going to say. It’s our guess that the choppy trade we saw yesterday resumes today into the afternoon Fed release. We have a few economic reports out, but there are a boat load of earnings. Our view is sell the early rally and buy weakness. Spooky October is far from over…
‘The S&P 500 and Day 1 of the 2 Day FED Meeting’
MrTopStep WEBINAR:
Please join MrTopStep’s Danny Riley and Rob from Discovery Trading Group for this Saturdays, October 31, 2015, 10:00am CST webinar.
MISCONCEPTIONS AND REALITIES OF HIGH FREQUENCY TRADING
SPACE IS LIMITED, SO SIGN UP NOW!!!
As always; please use protective buy and sell stops when trading futures and options.
- In Asia 10 out of 11 markets closed lower : Shanghai Comp. -1.72%, Hang Seng -0.80%, Nikkei +0.67%
- In Europe 7 out of 11 markets are trading higher : CAC +0.47%, DAX +0.72%, FTSE +0.42% at 7:00am CT
- Fair Value: S&P -6.78 , NASDAQ -9.75 , Dow -85.11
- Total Volume: 1.2mil ESZ and 3k SPZ
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