And So We Resume
The resumption of trading today has been anxiously awaited, but will bring with it much uncertainty. This uncertainty will result in wide spreads and high volatility in the market.
Also keep in mind that September is still the front month in stock index futures. That means we could see some big moves and large size being done as trading desks roll positions into December.
It is very difficult to estimate where S&P futures will open. A 5% limit down equates to 1035.70. We could go lower than that. European markets are lower this morning.
As a trader today, you need to prepare yourself for very, very wide spreads. Our hunch is that on the open — whenever and wherever we open — we will see 300 to 500 point spreads in the market. In addition, the market will be moving on news, on rumors, on short covering and on a whole myriad of factors.