Bill Cara’s Blog for Jan 5, 2012
CTA Trading Desk Morning Report
[9:15am ET] Good morning, Geoff here.
Yesterday, the S&P 500 sold off in the morning only to find support just above the 200 dma. That marks 2 consecutive closes above that key level which will provide confidence to the bulls. However, the October high still has not been broken and a break above that level will truly confirm the breakout for the S&P 500.
This morning, the ADP report showed a significant increase in hiring in December as the private sector added a seasonally adjusted 325,000 jobs. That beat expectations and was up significantly from the 204,000 add in November.
Jobless claims fell a seasonally adjusted 372,000 which was roughly what was expected and marks claims falling in four out of the last five weeks.
Those two reports can be seen as positive signs on the employment picture. Tomorrow’s employment data will be watched closely by the market and as I noted yesterday; “At times when the market is stretched, a key economic data release can serve as the catalyst for a price reversal.” In other words, because the market is overbought, tomorrow may be a “sell the news” event if the data is positive.
The fly in the ointment for the bulls is the US dollar which is also poised to breakout. Right now, we are playing the game of chicken waiting for confirmed breakouts in either the dollar or the S&P 500.
We continue to be leaning long, but as I noted yesterday, we are poised to take a defensive stance very quickly. As I said; “with that scenario in mind, taking gains in current holdings that have rallied and/or adding downside protection at these levels would be prudent.”
Have a great trading day!
Here are the 7:00am ET snapshots of the latest equity market trading results for Europe, and futures prices plus 5-minute charts of the futures for S&P 500, 30-year US Treasury Bond, US Dollar index, Gold and Crude Oil.
|Symbol||Name||Last Trade||Change||Related Info|
||35.00 (1.80%)||Components, Chart, More|
||19.71 (0.93%)||Components, Chart, More|
||31.81 (1.00%)||Components, Chart, More|
||59.36 (0.97%)||Components, Chart, More|
||2.49 (0.79%)||Components, Chart, More|
|^OSEAX||OSE All Share||449.43
||0.50 (0.11%)||Components, Chart, More|
||1.10 (0.35%)||Components, Chart, More|
||39.32 (0.65%)||Components, Chart, More|
||45.18 (0.80%)||Components, Chart, More|
||21.80 (2.35%)||Chart, More|
||18.27 (2.13%)||Components, Chart, More|
||14.71 (1.01%)||Chart, More|
|GD.AT||Athex Composite Share Price Index||646.69
||15.60 (2.36%)||Chart, More|
The team will check in during the day, reporting in the Discourse when there is a new entry.
Enjoy your day.
Cara on Trends & Cycles
Vad’s Catch of the Day
Kaimu’s Sound Money
CTA Trading Desk Mid-Day Report
CTA Trading Desk Post-Close Report