As we suggested could happen on our Emini Radio Program over the past few weeks, the absence of a definitive move by the Fed has indeed resulted in the market throwing a bit of a temper tantrum led by none other than Goldman Sachs.
Here’s the note from Goldman:
We are recommending a short position in the S&P 500 index with a target of 1285 (roughly 5% below current levels) and a stop on a close above 1390. This morning, the Philly Fed print of -16.6, down sequentially and worse than expected, provides further evidence that weakness has extended into June.
Although yesterday’s FOMC delivered easing as expected, with a dovish statement, positive risk sentiment ahead of the FOMC had already buoyed markets. And we now think, with incremental US monetary policy on hold, the market will need to confront a deteriorating growth picture near term.
The risk to our recommendation is that the data soon reverts to the 2-percent growth path our economists expect, that China growth turns, or that European policy-makers’ rhetoric buoys risk sentiment further from here, with the upcoming end-of-June summit a focal point on this count.
Just a few hours later Moody's Investors Service cut its credit ratings for Goldman Sachs Group Inc. along with those of more than a dozen of the world's biggest banks. Probably just a coincidence.
At session end the major indexes lost nearly 2 percent apiece with the Nasdaq leading the pack. S&P -30.18 Dow -250.82 Comp -71.36
Purpose Driven Trading
I'm quite sure that most of you are familiar with Rick Warren's best selling book "The Purpose Driven Life". Through the 40 day journey many have found destiny, purpose and answers to some of life's most challenging and compelling questions.
Over the next few days I want to initiate a discussion with you regarding your Emini Trading and the purpose that drives you. Please use the comment section at the bottom of this post to share your thoughts and questions with the rest of the community.
In his book, Rick asks a very basic but profound question - What Drives Your Life?
In the same vein I would like to ask you - What Drives Your Trading?
It may seem difficult to believe that any of the issues listed above could impact your trading. After all, to be successful as a trader all you really need to know is when to get in and when to get out... right? Or, perhaps it's a little more complicated than that.
Over the next few days with the help of our resident trading coach Robin Dayne, we shall endeavor to take you to the next level in your Emini Futures Trading.
To join the conversation, use the comment section at the bottom of this post, drop us an email, or better yet a leave a voice mail at 415-857-5654 and we'll discuss it live on the show.
S&P 500 Emini Futures
(ES) Emini Futures Tweet 06/20/12
This Emini Tweet was issued at 11:08PM PDT on 06/20/12. The trade itself was triggered today 06/21/12 during the second worst beating Wall Street has taken all year. At the bottom of the decline we have a Bullish Harami and price has consolidated for 9 hours as I type inside of a 1 point range which just so happens to be a Weekly Trading Zone given to our CFRN Partners before the market opened on Monday.
The only high impact economic news due out on Friday is the German Ifo Business Climate report. This survey is highly respected due to its large sample size and historic correlation with German and wider Eurozone economic conditions. It tends to create a hefty market impact upon release. This reports comes out at 4:00 AM Eastern here in the US. If this report is bearish look for the S&P 500 to drop as low as 1304/1305. If the report is bullish we could see 1333/1334 on the upside.
Keep in mind that Asian markets have slid some 2% tonight and have yet to drag the S&P down with them. Regardless of the outcome of the economic report, heads up at 4:00 AM. If the markets do move lower as we head into the London open, watch 1317/1318 for potential support.
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