Emini Futures Trading / Triple Witching Wobble

by DeWayne Reeves

E-Mini S&P 500; Triple Witching wobble?

The E-Mini S&P 500 had an inside to higher day Friday as we had anticipated.  Volatility seems to be increasing in the marketplace as the newswires heat-up with calamities.  We were oversold from the previous moves lower, so it was only natural to retrace higher.  (Please read Thursday’s report for our anticipated high!)  Another factor, was the Triple Witching;  An event that occurs when the contracts for stock index futures, stock index options and stock options all expire on the same day. Triple witching days happen four times a year on the third Friday of March, June, September and December.  One would like to view the markets from a technical perspective, but with all of the news, traders were asking “What just happened?” as the moves were not predictive from a technicians viewpoint.  The market may leave us on tender hooks with so much jostling about globally, but the technical perspective should not be left behind.  If an emotional shudder is felt, one may want to stand aside for a time to allow the knowledge and discipline to return.  One cannot trade the news stories successfully!  The chart will tell the story, but without the hype. 

NATO had issued the resolution on the no-fly zone last evening!  Friday, news spread that a ceasefire was in place.  President Barack Obama issued a humanitarian warning to Maummar Gaddafi to allow aid to reach the rebels and to allow the water and supplies through.  It is an intervention, yet President Obama had left out the portion about Gaddafi leaving the country.  Perhaps the less threatening warning will cushion any potential retaliation in the future from any of the Middle Eastern countries. 

Japan is seeking to control the Nuclear Power Plants with no hope of future usage.  They, in fact, were toying with the idea of burying the plants.  Japan is a hardworking, financially stable country that will possibly just have to flatten and rebuild.  Clearly, they have a path to follow that will or may ultimately create a demand for many tangible goods.  In an economically depleted environment, it should boost jobs creation and exports.

Monday, what to expect!  US Existing Home Sales at 9:00 AM CST. We are technically still in sell mode!  Today’s range was $1287.50 - $1261.50.  The market settled at $1274.25.     Our comfort zone or point of control for this market appears to be $1276.50.   We remain bearish as long as we stay below $1308.00 according to the Daily Chart.  What we anticipate is an inside to higher day as the market is still oversold.   Little to no news may serve to calm some of the nervous traders fears as this week’s catastrophes seem to weigh on us.  We should be able to allay those fears and get on with the business of potentially making a living.  The anticipated range for next week is $1291.00  -  $1262.00.

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Whenever you find yourself on the side of the majority,
it's time to pause and reflect.
- Mark Twain -

Best regards,

Leslie Burton

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