When stepping away from the markets for nearly a week, I find my return akin to drinking from a fire hose as I try to slurp a cascade of data that have rained down during my absence.  Playing catch up can be daunting although recognizing a near 6% drop in the S&P 500 over the past two sessions is obvious.  So too is reviewing the economic numbers as well as digesting market moving news such as The Wall Street Journal’s reporting that the New York Fed has started to question overnight funding from large European banks with significant operations in the U.S.  As always, I will attempt to find the rare nuggets of information Continue reading »

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Since I began writing this commentary over five years ago, I have listed key technical benchmarks for the S&P 500 E-Minis after the main body of the note.  Although it attracts the least amount of attention, I share these key support and resistance points as an additional tool to reduce slippage for execution traders.  I never will judge the value of the content I provide from the written text as I leave that to those who choose to take the time to read it; however, I will put these index levels up against anyone else’s in terms of quality.  In fact, paper trading a futures intraday model against these metrics has produced consistent returns in the high-teens with only modest drawdowns.

The secret in identifying support and resistance Continue reading »

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Extending yesterday’s baseball analogy, the market hit one deep into the gap on Thursday.  Before other bulls start doing cartwheels, let me remind them that a double does not score any runs with no one on base and over the past three weeks the bears have outscored us 12-3.  I certainly can run through paragraphs of analysis on the milestones the TICK data reached yesterday, but I ask that you take it on faith that the information suggests investors put money to work aggressively.  Instead, I want to focus more on the psychology of this promising bounce off the bottom in an effort to determine if stocks can extend this move.

Given the extremely elevated volatility and uncertain macro environment, the large long only institutions will Continue reading »

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