Hit the Mark Trading’s Brief Review of Overnight Market Action Setting the Tone for the Trading Day
Good morning, traders! ADP just released their report on private sector hiring exceeding expectations with 238,000 actual new hires. This report is a precursor to Friday’s US government Employment Situation Report. A robust report on Friday matching or exceeding today’s ADP release could see US bonds drop, stocks rise, and gold could pop on the basis of perceived inflation. Time will tell. US Dollar is climbing on ADP report. A wild card factor Friday is if stocks sell off out of fear a better than expected report means faster QE taper.
Today we have release of FED FOMC Minutes at 2PM ET. My guess is after the initial morning rush hour move we will see equity index futures grind in side way chop fashion. This is typical action in front of a widely anticipated government report so plan on a longer lunch or some other activity leading into announcement. I would not press my luck trying to trade a known period of likely inaction.
Traders will parse the minutes looking for evidence of future tapering schedule. The FED has a difficult job in projecting a strong enough economy to excite Wall Street versus knowing any rapid taper schedule is likely to cause a market sell-off. Note that tapering means less money printing. Typically, less money printing means a stronger currency. We have discussed US Dollar Index reversal patterns on the weekly chart. Yesterday’s USA trade balance report added fuel to the fire of a stronger USA economy. FED President Williams said QE could end this year in a Tuesday speech.
Germany reported factory orders rose more than expected in November. Euro zone unemployment remains 12.1%. Euro zone retail sales exceeded consensus strongly coming in at 1.4% versus expectations of 0.2%.
Tonight China releases Consumer Price Index and Consumer Producer Price Index numbers. Thursday we have ECB and Bank of England monetary policy statements. All eyes on the ECB amidst increased concern of deflation.
Today’s Reports and FED Activity
- 10:30 AM ET – EIA Petroleum Status Report
- 14:00 PM ET – FOMC Minutes
- 15:00 PM ET – Consumer Credit
We are seeing reluctance of European equity futures movement leading into the ECB policy statement tomorrow. Everyone is waiting for the USA market open for action and greater trading range.
- ES has done nothing with the better than expected ADP report.
- USA Crude is trading in a dangerous tight range area near our support and resistance bench marks. Day traders please let price resolve this issue! I am looking at my 10 range bar chart.
- DAX slightly higher thanks to German factory orders report.
- STOXX 50 flat/incrementally lower.
- Bonds lower on ADP report.
- Gold incrementally lower.
- Euro very quiet.
- US dollar higher. Weekly chart signals reversal higher. ECB statement will affect.
- Yen slightly lower.
- Coffee proving volatile rising strong on Monday, giving back gains on Tuesday and higher in today’s pre-market.
- Sugar below 16.
- Cotton flat / incrementally lower waiting on Friday USDA report.
- Grains are quiet going into Friday USDA report.
Day Trader Bench Marks
Intraday ES Floor Pivots – Using 24 hour electronic market hours 1800-1715 ET.
Main floor pivot: 1828.25
Intraday Euro Floor Pivot – Using 24 hour electronic market hours 1800-1700 ET.
Main floor pivot: 1.3622
Think About This…
When you think about all the famous gangsters in history it seems like banksters now wear the crown of public enemy number one. Yesterday JP Morgan agreed to a $2.6 billion settlement stemming from failed fiduciary responsibility. These guys are incredible and never face jail time. What business and what a country failing to punish individuals! No worries, the final take down comes from share holders who see profits diverted to legal fees. Too big to fail and too big to punish the executive level. Just my opinion.
Have a great trading day!
To learn more from Martin, visit HitTheMarkTrading.com to join his mailing list and receive blog updates.