ECI Coming
Each evening we focus on the most interesting aspects for the upcoming trading day. The comments are based on observations of the nightly updates of the Futures and Market Bias pages. They are provided for educational purposes only and are not intended to be direct trading advice. Also, keep in mind that these remarks are made up to 12 hours in advance of the markets opening. Therefore, overnight events may alter the outcome of these observations.
At the time this is being published, the S&P Globex Futures are trading .70 points lower and the Bond Market Futures are trading up 2 ticks.
Heads up, tomorrow the Employment Cost Index (ECI) is scheduled for release. Due to the recent focus on the Fed and inflation, this will likely cause extreme volatility in both the stock and bond markets in early trading.
The December Japanese Yen [JYZ9>JYZ9], on the Turtle Soup Plus One Sell List, gapped open to 20-day highs today(a) but reversed to close poorly (b). This may have breakout players trapped on the wrong side of the market. Look for a shorting opportunity here.
Volatility Watch
Even with today’s move in December Bonds [USZ9>USZ9], they remain on the Volatility Explosions — Multiple Days List. Watch for a larger-than-normal move (in either direction) as volatility reverts to its mean. Just use caution and watch for potential “head fakes†as the ECI (see opening comments above) will likely amplify the move.
December Corn [CZ9>CZ9] is now on all three Volatility Explosions Lists. Watch for a larger-than-normal move (in either direction) as volatility reverts to its mean.
December Silver [SIZ9>SIZ9] is now on the Volatility Explosions-Multiple Days Lists. Watch for a larger-than-normal move (in either direction) as volatility reverts to its mean.
Best of luck with your trading on Thursday!
Dave Landry
PS-Reminder: Protective stops on every trade!