Leaning Toward a Down Monday

While the S&P 500 had a nice rally of about 20 points from Thursday morning's low to Friday morning's high, it was not really the big move in one day that has usually occurred recently after a small NYMO change day. With the somewhat muted reaction to this indicator so far, we're looking for a potential big move day on Monday, the first trading day after quadruple witching expiration.

Whereas on Wednesday we were looking for a move up, which we got, we're now leaning toward the next big move being down. The lackluster rally in response to the NYMO indicator could portend a down move, though it's hard to tell if quadruple witching expiration had an effect.

If Friday's lows get broken on Monday, we'll be looking for a more sizable down day. However, if the market breaks out above Friday's highs, we'll be looking for continued up side. In any case, we'll be ready for a break in either direction, as our system will react to wherever the market goes. There should be some nice volatility on Monday from which active traders can profit.

Live testing of our automated system continues to go very well, with strong returns and minimal draw down. With the arrival of our new hardware, we continue to expand the system's coverage. The bond and U.S. dollar futures trading so far has provided very nice gains to supplement the stock index futures trading, and we're now adding gold futures trading. We'll continue to expand the scope to include oil and other commodities.

To all the fathers out there, have a Happy Father's Day Sunday!

Comments

[Richard R:]

Yeah, it´s time for Mr. Market to go down...about -100 pts for Dow

Jun 21 03:49 PM

[RiskReturnO...:]

Iran will drive the next move in the market. If SPY breaks 875 and trades toward 800, QQQQ will trade toward $30 to form a strong intermediate term base / support.@

Jun 21 09:22 PM

[User 434809:]

My $84 puts just missed 6/19/09


On Jun 21 03:49 PM User 423124 wrote:

> Yeah, it´s time for Mr. Market to go down...about -100 pts for Dow

Jun 21 09:34 PM

[markfl:]

Reuters moved a story late Sunday (EDT) regarding details of a revised global economic forecast for 2009 and 2010. These forecasts include substantial downward revisions in economic growth for all the world's trade zones except India and China--these two countries have slight upward revisions. Comparing forecasts from the US Federal Reserve and the IMF, this World Bank data suggests the US will have a difficult time obtaining positive GDP for the third quarter. I think the markets have priced-in an end to the recession this Summer, with slight positive growth for Q3.

Much will depend upon how the US press digests this report, but it is difficult to interpret as other than sobering. There is ample opportunity, absent some countervailing economic data, for markets to correct considerably in advance of the holiday weekend. The release of 2Q GDP will be pivotal. It will throw either fertilizer--or herbicide--on the green shoots.

Jun 22 02:17 AM