Market Commentary for Monday, March 19, 2007
Friday left us with red closes across the broader markets on high volume. We closed quadruple witching with the bears on top of the market after the first hour. The week also closed red across the broader markets. Crude closed down 44 cents at $57.11 on the day. Gold closed up $6.80 at $653.90 on the day.
Friday’s selling action was narrow range, very similar to Thursday’s up day. So basically we went no where and stayed in range. Monday economic data is very light and we will have the FOMC meeting lingering in the air. The two day meeting will make for a slow few days on the market. Earnings will not offer much this week for volatility. We’ll need to take it easy as Monday starts to find our spots.
Last week we tested those March 5th lows and 38.2% fib support (outlined on charts below). We held well and made it through quadruple witching. I am not foreseeing anything overly negative from the FOMC for the markets right now. Which will give me a slight bullish bias into Monday but I really do not have a lot of conviction for either side as we open this week.
Economic Data for the Week of March19 – 23 Monday 01:00 Housing Market Index, Tuesday 08:30 Housing Starts, 08:30 Building Permits, 10:00 State Street Investor Index, 02:30 FOMC BEGINS (two day meeting), Wednesday 07:00 MBA Purchase Applications, 10:30 Crude Inventories, 02:15 FOMC Announcement, Thursday 08:30 Initial Claims, 10:00 Leading Indicators, 10:30 Natural Gas inventories, 12:00 Fed Governor Kroszner speaks, 01:30 Fed Governor Kohn speaks, Friday 09:15 Phil Fed Bank Pres. Plosser speaks, 10:00 Existing Home Sales, 11:30 NY Fed Bank Pres Geithner speaks.
Some of the earnings for the week of March 19: Monday pre market MOVI and after the close COSI, Tuesday pre market CRZO, CMC, SUP and after the bell ADBE, CTAS, DRI, ORCL. Wednesday pre market DIET, GMTN, MS, ROST and after the bell HIS. Thursday pre market BKS, CAG, EBS, FDX, FRED, GIS, KBH, SCHL, WSM and after the bell COMS, ESIO, JBL, NKE, PALM. Friday nothing of interest.
ES (S&P 500 e-mini) Monday’s pivot is 1401.50, the weekly is 1399.25. Pretty range bound day that bounced off the weekly pivot to just churn most of the day again on Friday. Until we clear 1410 upside will be limited and we’ll stay in range. 1395.25 breaks we would likely see selling accelerate. Intra day support: 1398.50, 1395.75, 1394, 1392.50, 1388.50, 1382.75. Resistance to look for: 1400.75, 1402.50, 1404.25, 1406.75, 1408, 1410.25, 1413, and 1416. 60 minute chart is below
I hope everyone has a great week.
Any thoughts on initiating trades prior to FOMC meeting? I don’t plan to but was curious to know other people’s thoughts on it.
Rahul
http://www.tradernirvana.com
HI Rahul,
I do take positions ahead of most meetings, I also preset some orders on futures to hit at the announcement. Then play the immediate reaction as well. For most is should depend on what trading style you have and timeline to stay in the position. I think futures are the perfect tool for the immediate reaction and positioning after that as well. Ahead of the announcement I take option positions on indexes/sectors or even gold and oil. I’ll see where premiums set Monday late day and evaluate my strategy.
Good luck to everyone trading FOMC.