Factor This In
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.
After the closing bell, Compaq [CPQ>CPQ] announced a negative earnings outlook. The stock traded 4 points lower in after hours trading. In addition, Intel [INTC>INTC] and Microsoft [MSFT>MSFT] traded 3 points lower (after hours) in sympathy. Therefore, we will likely get a market reaction to the downside early Monday morning. Make sure you factor this into your index futures trading.
Over the past few nights, I’ve been talking about potential buying opportunities in the energies, May Crude Oil [CLK9>CLK9], May Heating Oil [HOK9>HOK9] and May Unleaded Gas [HUK9>HUK9] as they were pulling back from highs. Today, all rallied nicely. Even with today’s rally, they still look interesting to me, especially May Unleaded Gasoline [HUK9>HUK9] which may play “catch up†to the larger moves made today in Heating Oil and Crude.
For you bottom fishers, May Sugar [SBK9>SBK9] mentioned last night, is still consolidating near multi-year lows. Referring to the chart below, notice that it is in the process of forming a triple bottom.
May Sugar
Source: Omega Research.
May Coffee [KCK9>KCK9], made major lows today but recovered and closed strong (at the high for the day). This may have the breakout players trapped on the wrong side of the market. Look for a buying opportunity here.
Best of luck with your trading on Monday!
Dave Landry
Director of Research
PS – Reminder: Protective stops on every trade!