Remain nimble on March Index Futures
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 1.30 points higher and the bond market is trading down 5 ticks.
Tonight we have 4 indicators pointing higher on the Market Bias Page. Under normal circumstances this would be very bullish. However, in light of today’s extreme volatility and poor action in the bond market, I’d remain nimble (i.e. consider day trades only) on the March index futures.
Remaining flexible is key to trading. For instance, last night, it looked like March Corn [CH0>CH0] had the potential to rally. However, today it sold off and closed poorly (a). Therefore, it now appears that the play may be in the direction of its longer term downtrend. Look for a shorting opportunity here.
The February crude complex (oil, heating oil and unleaded gas) sold off on Thursday (their last day of trading until tomorrow). This is not the type of action you would expect in contracts near life-of-contract highs. Watch the behavior of these contracts going forward for possible shorting opportunities.
Volatility Watch
February Gold [GCG0>GCG0], 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.
Best of luck with your trading on Tuesday!
PS-Reminder: Protective stops on every trade!