RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

The S&P ended last Friday with an explosive push to the upside at hit an all-time high of 2580.75 after great earnings from both tech and financial stocks. The NASDAQ was the big winner on Friday finishing at 6214 after reaching all-time highs of 6225.75, the move largely attributed to a massive move up on Amazon. Yesterday was a fairly quiet day with most traders expecting volatility to pick up with the Fed announcement on rates coming tomorrow, the monthly payroll number on Friday, and a announcement of a new Fed chairman that will likely provide traders decent volatility through the rest of the year. This is a key market mover because the markets will be looking for the new appointee to come in with either a hawkish tone or a dovish tone. Traders should be on guard for sharp moves with any headlines coming from the tape. Traders should also remember that last month’s employment number came in weak largely due to the massive hurricanes in Houston and Florida. Traders are looking for a modest rebound of 300K in non-farm payrolls, and if we should see a headline number below 100K, in my opinion, we may be close to a top in equities sue to the fact that the press cannot use the excuse for the hurricanes after two months of data. But trying to pick a high in the stock market has been a losing proposition for anybody who dares to sell. The S&P has not had a 3% correction in over a year, and I believe there are two main forces behind the strength. First, everyone is looking for a correction and when views are all one way, normally they do the opposite. Secondly, investors continue to search for yield and US stocks that offer best return on investments. I expect a quiet day today, but we should see some trade opportunities after Fed announcement tomorrow at 1:00pm central.

 

Dec ’17 Emini S&P Daily Chart

Dec '17 Emini S&P Daily Chart

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Greg Perlin

Senior Market Strategist
Greg is a former Chicago Board of Trade member. He was an independent floor trader, pit broker and floor broker with Cantor Fitzgerald. Some of his clients included traders from Morgan Stanley and Lehman Brothers. He also acted in the capacity of desk manager for the morning trade desk. Greg was part of the elite Lind Plus Division for 10 years before joining RJO Futures in 2011.
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