Fed minutes worries, Consumer confidence down, Broke support level --> $540 profits.
5 min Nasdaq Emini 100
Hi,
How is it going? We are entering a new era of hightened volatility... market is nervous about how things might turn out.. Major economic news have an amplified effect on market movements.. Today we have two major pieces of news. The consumer confidence report at 10:00 and the FED minutes at 14:00
Market gapped down without really recovering... Although the general direction was down, there was no strong momentum ... Consumer confidence did not really have a big impact on the market.. I stayed on the sidelines...
Fed minutes came out at 14:00 and market did not react in a big way at all.. But now however, it was pretty obvious that market was slowly trending down.. I only needed a technical confirmation for me to go short... The signal came at 14:45 when price broke the support line at 1923. I shorted 1 contract at 1920 and another 2 more contracts at 1917.. Although stochastics was not strictly in the overbought region, it also turned down... Short-term MACD also turned down sharply below the zero line.. I held my position all the way till the close and exited at 1909 with profits of $540.
Fundamentals:
The stock market found little to assuage concerns in minutes from the Fed's last meeting, released during afternoon trading. The major indexes' losses steepened after investors parsed the minutes for signs of a possible cut in interest rates.
There had been some hope on the Street that Fed policymakers might have sent a stronger signal they were more willing to cut interest rates to help calm turbulent market conditions. But in the minutes from the Federal Open Market Committee's Aug. 7 meeting, while the central bank noted the turmoil in the markets and said, "to the extent such a development could have an adverse effect on growth prospects, might require a policy response," it didn't discuss a cut in the benchmark federal funds rate that Wall Street has wanted.
The meeting predated a number of actions taken by the central bank to try to alleviate market volatility, including the Aug. 17 lowering of the discount rate, the interest the Fed charges banks to borrow money. Wall Street, despite a calmer week after that step, seems to be growing more dissatisfied because the Fed has not yet lowered the funds rate -- and with a return to the intense volatility seen earlier this month may be trying to force the Fed to act.
"Investors are getting whipped side-to-side because their expectations, which are changing almost on a daily basis, aren't being met," said Chris Johnson, chief investment strategist at Johnson Research Group. "We've gone from the roof is on fire to the Fed is riding in on a white horse, and what we're seeing now is a reality check."
Stocks were down the entire session on further worries about the economy. The Conference Board's report that consumer confidence sagged in August amid volatile financial markets and ongoing housing problems added to the downbeat mood on the Street. Keeping alive credit worries, a Standard & Poor's housing index showed that U.S. home prices in the second quarter posted the sharpest decline since 1987.