Microsoft Action
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.
Heads up, after the close the Government ruled that Microsoft is a monopoly in PC operating systems. The stock was down over 3 points in early after hours trading. Because Globex S&P futures are closed, it’s impossible to gauge the possible overall market’s reaction. You might want to watch the futures when they re-open on Sunday night for clues. BTW, as you know, Microsoft is now in the Dow so we might see some pressure here.
The December S&P futures [SPZ9>SPZ9], on the Turtle Soup Plus One Sell List, gapped open to 10-week highs today (a) but sold of to close below its open. This suggests that this market may be stalling out. Look for a shorting opportunity here but wait for some additional signs of weakness as this market has been strong as of late.
December Natural Gas [NGZ9>NGZ9], on the Turtle Soup Plus One Buy List, gapped open to 20-day lows today but reversed to close well. This may have breakout players trapped on the wrong side of the market. Look for a buying opportunity here.
Volatility Watch
By now you’re probably wondering why December Corn [CZ9>CZ9] hasn’t gone anywhere in spite of being a multi-day low volatility situation. The volatility in weather related crops (i.e. corn) can dry up (no pun intended) for quite some time. This doesn’t mean that there isn’t an opportunity, it just means that you might have to be more patient and wait for some time for the volatility to revert back to its mean.
With that said, December Corn [CZ9>CZ9] 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.
January Soybeans [SF9>SF9], are now on the Volatility Explosions-Multiple Days List. Watch for a larger-than-normal move (in either direction) as volatility reverts to its mean.
Best of luck with your trading on Monday!
Dave Landry
PS-Reminder: Protective stops on every trade!