Heads Up, CPI 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 1.20 points lower and the Bond Market Futures are trading up 2 ticks.
Heads up, tomorrow the CPI number is scheduled for release. This report will likely create volatility in the bond and index futures markets as many players are obsessed in trying to predict the Fed’s next move.
Tonight, we have three indicators pointing lower on the Market Bias page. This suggests a downside bias for the September Index Futures. Look for shorting opportunities in the September S&P [SPU9>SPU9] and NASDAQ [NDU9>NDU9] which are pulling back from stronger downtrends than the Dow Futures [DJU9>DJU9]. However, as I discussed Friday night, don’t fight the tape should we get a positive reaction to the number.
September Unleaded Gas [HUU9>HUU9], on the Pullbacks Off Highs List, is a shallow pullback from life-of-contract highs. Look for a buying opportunity here, especially if it can take out today’s high (around .6485).
Source: Omega Research.
October Lean Hogs [LHV9>LHV9], mentioned last night and on the Pullbacks Off Highs List, still looks like it has the potential to rally out of its pullback. Look for a buying opportunity here.
Volatility Watch
December Gold [GCZ9>GCZ9], on all three Volatility Explosion Lists, sold off earlier but recovered to close well. This “head fake†may have shorts trapped on the wrong side of the market. Look for a buying opportunity here.
September Heating Oil [HOU9>HOU9] is now on all three Volatility Explosion Lists. Look for a larger-than-normal move (in either direction) as volatility reverts to its mean.
Best of luck with your trading on Tuesday!
Dave Landry
PS-Reminder: Protective stops on every trade!