A Jack of Small Trades

Thursday’s Globex Session

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S&P futures close of the prior day’s session at the low. Overnight the selling pressure continued. S&P futures traded down to 1970: 28 points below its prior day closing range high at 1998.

Following the initial sell-off (decline), S&P futures traded up to 1988 (18.50 points) at or near the prior day’s close.

The retracement up to 1988 encountered resistance and the S&P re-tested the low, trading down to 1972: 15.50 points.

The pull-back encountered support, there was no lower low. S&P futures traded up 1987 (14.75 points) pulled back to 1976 (11.75 points) before re-testing the retracement high 1988, at or near what had been the prior day’s low.

The slope of the Kalman filter (14 tick range sample) has trend up.

A break-out above 1988 would indicate that a new low at 1970 was established during the overnight globex session.

The minimum expectation would be a rally up to the yesterday’s closing range high at or near 1998-2000.

Near term resistance is up at yesterday’s high 2010, 2018 and the overnight short covering rally high at 2027.

Below the overnight low at 1970, is the remaining support low at 1960; the 12-16-14 low.

Good Morning Traders,

Synopsis

  • The short covering rally that followed this week’s major “rout of the trading range” appears to have run its course with yesterday’s rally up to the January 1st intraday high at 2058.
  • The directional up move in the S&P March futures has “paused” and consolidated.
  • The price action is now in pull-back mode ahead of today jobs data.
  • The minor pull-back target is at or near 2056-2058.
  • The average daily range pull-back estimate is located at or near 2040-2035.
  • Depending of the today’s data, there is to possibility for a re-test of the high and a follow through to a higher high.
  • A break-out above Thursday’s high at 2058 would indicate the S&P is heading for a re-test of the January 1st opening range high at 2068.
  • Stops loss orders are likely to be located approx. 2 points above yesterday’s high.
  • The December all-time record high is up at 2088.
  • The U.S. futures currently point to a cautious open, as market participants await today’s economic data.

Relevant Market News

In economic news, fewer Americans applied for employment benefits last week, adding to signs of a strengthening labor market.

Economists expect U.S. employment to increase by about 245,000 jobs in December after an increase of 321,000 jobs in November. The unemployment rate is expected to dip to 5.7% from 5.8%, hitting its lowest level since June of 2008. 

On Thursday, the U.S. benchmark indexes rallied for a second day, with all three major indexes gaining about 1.8% each, as the short covering up into the January 1st trading range concluded.

In commodities

Oil prices appear to have stabilized.

February Crude traded at $48.74 per barrel: down -$0.05

February gold traded at $1211.6 a troy ounce: up +$3.10. 

Federal Reserve Bank of Chicago President Charles Evans said the U.S. central bank shouldn’t rush to raise interest rates until 2016, given low inflation and mediocre progress in the housing market.

The President of the Minneapolis Federal Reserve Bank said that the Fed is not acting more forcefully to push inflation higher.

In economic news, fewer Americans applied for employment benefits last week, adding to signs of a strengthening labor market.

Economists expect U.S. employment to increase by about 245,000 jobs in December after an increase of 321,000 jobs in November. The unemployment rate is expected to dip to 5.7% from 5.8%, hitting its lowest level since June of 2008.

Hello Traders,

S&P futures closed higher on Thursday as the short covering rally continued back up to the January 1st trading range.

S&P futures traded up to 2058: 45 points (2.2%) above the previous intraday low at 2013.

S&P futures closed at 2052: 68 points (3.4%) above Monday’s low.

U.S. stocks rallied for a second day on Thursday, boosted by expectations the U.S. economy will continue to improve and by hopes for more aggressive action from the European Central Bank.

The Dow Jones industrial average rallied 323points (1.8%) to end 17,907.  The S&P 500 gained 36points (1.7%) to close at 2,062. The Nasdaq Composite advanced 85 points (1.8%), to finish the session at 4,736.

The S&P 500's two-day gains were its biggest since the December 17th & 18th: the previous Federal Reserve-fueled rally of 4.5%.

The S&P also snapped back above its 50-day average, a technical support level it fell below on Monday.

The S&P 500 has recovered the majority of the 104 points (4.9%) decline from its end of the year Santa Claus all-time record high last two sessions, returning  the index to positive territory for 2015.

The Dow and Nasdaq also turned up for the year so far.

The advance was broad, with the S&P materials, energy and technology sectors each rising more than 2 percent, leading the day's gains.

ON the NYSE: advancing issues (2396) outnumbered declining (718).

Approximately 7.1 billion shares changed hands on U.S. exchanges, above the 6.7 billion average for the last five sessions.

The majority of Tuesday’s gains were the result of a break-out above yesterday’s high in the overnight session. There was no pull-back to fill the “gap” at Wednesday’s close.

The overnight rally continued to accelerate at the open. Following the initial “run” up to 2056 there was one minor intraday pull-back to 2048, after which S&P futures traded up to re-test the high and made a minor higher high 2058.

Market participants seem unconcerned that U.S. crude oil continued to trade below the psychology $50.00 price level for a second day. February Crude closed at $48.79 per barrel.

The shift back to “risk on” sentiment may have also been attributed to the continued weak euro zone data, which has been fueled speculation that the European Central Bank will take more aggressive action: start printing money.

U.S. unemployment benefits declined from the prior week, pointing to a firming labor market ahead of Friday's key monthly payrolls report. The jobs reports have been coming in consistently in the 200,000 or 200,000-plus range.

Friday's December jobs report is expected to show 240,000 non-farm payrolls added.

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