Greenspan Cautions
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 07:00 PM EST, Alan Greenspan, in a speech to the Washington OCC Group, said that high stock prices are putting lenders at risk and they should boost reserves to cover these risks. In reaction to this, the S&P Globex Futures are trading 13.50 points lower and the Bond Market Futures are trading up 6 ticks (at the time this is being published).
Heads up, the PPI is scheduled to be released tomorrow morning. This will likely cause volatility in the stock and bond market early on.
Tonight we have 4 indicators pointing higher on the Market Bias Page. Although this is normally a positive for the index futures, it’s obvious that Greenspan’s Remarks will (and always!) overshadow any Market Bias that may exist.
Recently, I mentioned that the Oil complex was melting down and that there may be a shorting opportunity on the first pullback. Well, tonight, all three: November Heating Oil [HOX9>HOX9], Crude Oil [CLX9>CLX9] and Unleaded Gas [HUX9>HUX9] closed poorly and are on the Pullbacks Off Lows List. Look for shorting opportunities here.
November Orange Juice [OJX9>OJX9], on the Pullbacks Off Lows List, hit 10-day highs today but reversed to close poorly. Look for a shorting opportunity here.
For you breakout players, the December British Pound [BPZ9>BPZ9], mentioned last night, broke out nicely to the upside as volatility reverted back to its mean. Continue to look for a buying opportunity here.
Best of luck with your trading on Friday!
Dave Landry
PS-Reminder: Protective stops on every trade!