Quantitative Easing the Bull or the horn the market is running on high hopes? The S&P500 emini futures has been in a bullish trend reaching new highs.
The FOMC meeting on Thursday, seems like a lot of hope is betting on the next round of Quantitative Easing. Although the S&P500 emini futures contract has been trading on abysmal volume, it has levitated to new highs. Monday, we barely made it through 1 million contracts. The Support for this move is again at the previous swing high. We are looking for this break of the resistance at 1440 with a projected move to 1465, then to 1487. Normally we will see a volume increase in the second week of September but with all the pressure we have in Europe there has only been a few days close to 2 million. The problem for most investors trading this market versus the institutional trader is that these periods of low volume can produce volatile break outs which turn into head fakes as investors are buying into a move as it retraces. If the market stalls at 1452-57 after the Thursday FOMC announcement, then I will watch for a sell off to break through support at 1420, then 1398 with an extreme low of 1340. This is contrary to what is being said in the market place by the pundits for the next round of easing, If the Fed backs off then we might see this scenario. Keep your powder dry, take executable trades that follow your risk management strategies. Don't make a bet on the direction, only trade your set ups. This could be a very volat [...] day trading course
