Federal Reserve Chairperson-Designate Janet Yellen

11-14-2013 4-41-25 PMThis morning at 10:00 a.m EST in Washington DC, Janet Yellen, Federal Reserve Chairperson-Designate, testified on monetary policy before the Senate Banking Committee. Unexpectedly, text of the testimony was released 17 hours earlier than the scheduled speaking time. Today’s testimony had a positive effect on currency. The testimony is normally given in two parts. First, the prepared statement is read and a text version is made available on the Fed’s website. The second part is a Q&A session, where the questions are not known beforehand. The questions, being unscripted, can lead to some moments of heavy market volatility, as traders try to predict the effect on the bank’s monetary policy.

Jobless Claims

10-31-2013 5-11-38 PMToday’s E-mini S&P opening price was (1756.50). The market price dipped to (1750.25) for the day’s low at 10:40 a.m. US/Eastern time. The market day’s high of (1764) was hit at 2:35 p.m. US/Eastern time. In the week of October 26 jobless claims at 340,000, which is 10,000 below the previous week. Government contractors who were filing claims during the government shutdown in the first half of the month and California, with counting problems that were tied to a computer changeover, are no longer inflating these factors. The 4-week average has risen to 356,250 in the latest week, which is the highest reading since April. In the latest data which is for the October 19 week continuing claims are up 31,000 to 2.881 million. The 4-week average is down 10,000 in the latest week to 2.879 million which, is a bit above the month-ago trend. For insured workers, the unemployment rate is unchanged at 2.2 percent which is just up from the recovery low.

Crude Oil Prices

10-21-2013 chart2The opening price on the E-mini S&P today was (1739.25). The lowest price of the day was (1734.75) at 2:25 p.m. Eastern time. The day’s high was hit at 10:05 a.m. Eastern time of (1742.50). In the week of October 11 oil inventories rose by 4.0 million barrels to 374.5 million. Oil imports remain steady at an 8.0 million barrel per day rate in the week. With the seasonal slow down, refineries are operating at 86.2 percent capacity vs. the low 90 percent rates during the summer. Gasoline and distillate inventories are down 2.6 million and 1.8 million barrels in the week respectively. With oil prices at the $100 level per barrel, it is now moving slightly slower following today’s report.

Significant News Events

Oct10Chart1Today’s E-mini S&P opening price was (1666.75). The lowest price occurred within the first five minutes of opening at (1666.50). For the most part, price steadily rose throughout the day. The high was hit at around 3:15 US Eastern of (1687.75). The market prices can have massive price fluctuations when there are significant news events such as big-headline world events, scheduled economic reports, and prominent political figures. The Bloomberg economic calendar is a recommended resource for staying on top of scheduled events. A red star next to an event means these cause volatile activity.┬áIt is advised to stay out of the markets until volatile activity subsides.

Price Action Trading Helpful During E-mini Chaos

Many evening newscasters will surely mention today’s moderately historic economic activity, with the Dow loosing near 600 points. Of course, the Emini was along for the ride, dropping in price throughout the day. Unlike other “flat” day trading strategies, price action takes into account real-time price behavior. The day trading courses offered at Day Trade to Win teach traders how to exercise constraint, avoiding markets that are simply to volatile for retail traders to trade. Many traders see great opportunity with the market ranging as wildly as it has in the past week. When price can change four points in less than a second, its easy for a trader hoping to get the big win to blow up his or her account. As day trading coach John Paul says, trading when the ATR is above 5 is unwise. Today we saw the ATR hit 9.

Normally, the overnight Globex market is best avoided due to low volatility. However, in light of recent activity, the overnight may be the must tradeable in terms of volatility.

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