Friday, January 08, 2010
Observations of the Pre-Opening Trade
The long-awaited jobless numbers have affected the U.S. dollar more than stocks, as USD has been weak vs. both euro and Aussie dollar. While stocks sold off on the weaker than expected numbers, note (above) that the ES futures are above yesterday's lows. That low area between 1127 and 1128 is emerging as important intermediate-term support.
We had built volume in pre-market trade around 1137-1138 in ES; now we're seeing volume build around 1134. I'll be watching this AM how we treat those two levels.
Meanwhile, it remains difficult to imagine that the Fed will hike rates as long as unemployment trumps inflation as a headline theme. Longer term, that is supportive of the risk rally.