Hello All,
We broke support right after Consumer Confidence was reported far worse than expected, and there was no looking back afterwards. At best we may get a neutral unemployment report on Friday, so overall there is nothing that would provide much support for the market the rest of the week. As a rule of thumb, I typically expect trends to reverse after 3 day weekends, which we have coming up, so maybe the worst downside will be done by Friday. The question is whether we will break psychological support at 1000 on the S&P. Will the plunge protection team come out and play? Treasury yields were setting record lows today and that is indication enough that current trends will continue to be pressed for the most part. On the bright side the decline in the euro and crude was not as bad with respect to support levels, and the s&p cash did technically close back above the 1040 support level. But trading over the next couple of days is not worth the risk given all the uncertainty. We'll use the high vix to capture option premiums rather than pick a direction, and let the big boys hash it out until next week.
If you have yet to participate in our option writing program, there are some very appealing trades we will be ready to implement in the morning. Give us a call to learn more.
Best,
Arman Vahdatinia
Futures & Options Strategist
1-877-338-EXPO [3976] ext. 25
*There is a risk of loss trading futures. Past performance is not indicative of future results.
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