SubscribeDaily Futures Commentary October 22, 2009
Thursday, October 22, 2009
Yesterday’s late sell-off in the U.S. equity markets demonstrates just how fragile the stock indices are at current levels. After trading higher for most of the day because of improved earnings from Wells Fargo Bank and Morgan Stanley, U.S. stock index futures sold off sharply into the close after Wal-Mart warned of massive price cuts for the holiday season and a confession that the going may be “rough.” Coupled with this revelation was a downgrade of Wells Fargo from hold to sell by widely followed bank analyst Dave Bove.
The subsequent break in the market came after the release of the Fed Beige book showed the U.S. economy was recovering slowly although problems still existed with banking and commercial real estate.
Today traders will once again be subject to another slew of earnings reports. Since traders have been accustomed to buying dips, don’t be surprised by an early rally to at least 50% of yesterday’s break. It is at this area that traders will have to decide to take the market higher or start another leg down.
Today’s Leading Indicators report could set the tone for the …
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