My plan until Monday…
Wednesday’s Beige Book
sure turned stock markets green in a hurry. I didn’t take any time to
delve into the cumulative reports that compile this data, as the charts told us
all we needed to know. Stock players interpreted the mix as bullish, and buyers
lifted flat to choppy tapes straight upward into the closing bell from there.
S&P 500 futures bobbed sideways in a miniscule
range: 4 points high to low until past 1:00 pm EST. From there they lifted on
the news into and above R1 values, where closing bell orders ended the day on
that magnet.
ES (+$50 per index point)
ER
(+$100 per index point) <chart two>
Russell 2000 futures did a pre-expiry bob all
morning long. A buy/sell sequence of surge candles inside the noon hour shook
out players on both sides in rapid fashion. Late-day buying into the "bullish"
econ news took out shorts at R1 as they closed on session highs again.
ES (+$50 per index point)
S&P futures are trading to new multi-year highs
again. The past four days have spanned +34 index points upside, albeit still
within the previous three month sideways range. Upside bias has the nod until
proven otherwise, and the bulls need to press price action higher on accelerated
volume if the budding rally indeed has legs.
ER
(+$100 per index point)
Russell 2000 futures are back near all-time
highs, but lag the bigger caps a tad. Again, the same price levels visited in
late January might now be a triple-top pattern unless buyers keep pressing
higher on increasing volume.
Summation
Obviously, stock markets are totally news-driven in this time of anticipated
interest rate change looming ahead. CPI and jobless claims at bottom of the hour
along with Philly Fed at noon have ability to jar the tapes short-term. March
index option contracts cease trading today and settle in value at tomorrow’s
averaged open. Same for stock index futures and equity options tomorrow. The
irrational spikes witnessed in ER yesterday are probable to continue thru the
end of trading this week. Same can be expected to a lesser extent in the bigger
cap indexes.
I’ll personally trade 1/2 normal contract
positions myself until next Monday arrives, with the understanding that
remaining two days this week will likely be very good or very bad trading
conditions at either extreme. Triple witch weeks only occur four times per year,
with the gyrations involved merely a brief nuisance in the overall big picture
ahead.
Trade To Win
Austin P
(Online video clip tutorials…
open access)