Extreme Volatility Likely Tomorrow
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 .50 points lower and the Bond Market Futures are trading down 3 ticks.
Heads up, the Employment Report is scheduled for release tomorrow morning. This will likely cause extreme volatility in both the stock and bond markets in early trading.
December Gold [GCZ9>GCZ9], on the Pullbacks Off Lows List, has given up much (over 60%) of its recent gains and filled most of the breakout gap (a). One has to wonder if it those who were fortunate enough to have bought the original break may now be questioning their position. Look for a shorting opportunity here.
For you breakout players (or more appropriately breakdown players), the December British Pound [BPZ9>BPZ9], mentioned last night and on the Implosion 5 List, appears to be breaking down out of a inverted cup and handle formation.
December Copper [HGZ9>HGZ9], on the Turtle Soup Plus One Sell List, hit 20-day highs today but reversed to close poorly. This may have breakout players trapped on the wrong side of the market. Look for a shorting opportunity here.
Volatility Watch
December Corn [CZ9>CZ9] remains on all three Volatility Explosions Lists. Continue to watch for a larger-than-normal move (in either direction) as volatility reverts to its mean.
January Soybeans [SF9>SF9], are now on the Volatility Explosions-Multiple Days List. Watch for a larger-than-normal move (in either direction) as volatility reverts to its mean.
Best of luck with your trading on Friday!
Dave Landry
PS-Reminder: Protective stops on every trade!