The latest swing in the futures market came as the sharp morning selloff amid European trade was brightened heading into Thursday's unemployment data in the States. The index futures jumped off 6:00 a.m. ET lows and broke the morning's downtrend with the 7:00 a.m. correction period. Then came the data. Claims for new unemployment benefits fell 15,000 last week with initial claims for state unemployment benefits dropping to a seasonally adjusted 372,000. Consistent reports under 400k have been welcomed in recent weeks, but it's still a long way to a solid recovery.
The real test for this week will be tomorrow's report on December's employment, including nonfarm payrolls and the latest unemployment rate. Resistance hit once again at 8:30 a.m. as the indices tested morning highs, leaving things set for a pullback ahead of the opening bell, but without a solid development just yet for a break in that larger 30 minute channel from the week-to-date.
Nasdaq Composite (Figure 3)
Unless otherwise stated, the index action described in this article relates to the E-mini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.
Toni Hansen is president and co-founder of the Bastiat Group Inc., DBA Trading From Main Street. Toni is one of the most respected technical analysts and traders in the industry. She has been trading and educating new traders, money managers, professional market analysts and traders throughout the boom and bust of the last decade. She has worked in conjunction with some of the world's top financial exchanges. Learn more about Toni Hansen and the educational services she provides through her website at http://www.tonihansen.com.