Daily Futures Commentary October 15, 2009

Thursday, October 15, 2009

U.S. equity futures are expected to open flat to lower based on weak pre-market trading. A shift in demand for higher risk assets early this morning is leading some traders to take a little money off the table.

The Dow closed over the psychological 10,000 level yesterday for the first time in a year. What does this mean? Nothing. The market is disconnected from the economy at this time and being driven higher by momentum and money managers chasing stocks. Technically, it appears to be closer to a high than another buying opportunity.

Yesterday, the FOMC minutes indicated that the U.S. was far from hiking interest rates. They also showed that the Fed was a long way from implementing a tight monetary policy or reducing its asset buyback program. Several Fed members even tried to increase its asset purchasing power. This is definitely a sign that raising rates at this time is not a priority. Traders interpreted the FOMC minutes as bearish for the Dollar, erasing all of the gains captured following last week’s hawkish comments from Fed Chairman Bernanke.

This morning, traders will be watching for key …
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