We saw a good deal of selling last week with the S&P 500 piercing it's 50-day moving average on Friday. So, what should we expect today?
Last night during our live group trading session in the Trading Room, that question was raised. Of course, no one really knows what the market will do on any given day, but it is possible to get a sense of where it is likely to open.
Futures contracts on the major indexes are traded prior to the U.S. markets opening. You can get live futures quotes from your broker or even by tuning into CNBC, Bloomberg, or the Fox Business Channel. For example, the ticker symbol "/ES" is the E-mini S&P 500 and "/YM" is the e-mini DJIA. If you have access to quotes from other world exchanges you may also get a glimpse into the market activity elsewhere in the world. Some of our members have found the DAX to be fairly reliable in predicting opening activity on U.S. exchanges.
It is sometimes nice to have an idea of what you might expect once that opening bells sounds. As I type this, the futures are pointing toward a higher open which may provide a bit of welcome relief for some traders. This may provide an opportunity to exit a troubled position.
Just bear in mind that a higher open does not necessarily mean that we will also have a higher close. The market is an uncertain creature and if you ever find yourself thinking that you know what it is going to do next, that's when it will do the unexpected.
Stay hedged. Trade well.