Market gapped downa and tanked further... Short --> $220 profits
5 min Emini Nasdaq 100
Hi,
Market gapped down and there wasn't much action with Short-term MACD close to the zero line... I stayed out of the market... It was until aroudn 15:15 when price started to drop vigorously that I began to take notice.. price had failed to break out of the resistance formed at 2238.. and Stochastics was turning down... I shorted 1 contract at 2225 and and got out at 2214.. with profits of $220. There wasn't enough room for me to trade another 2 more contracts.
Fundamentals:
Wall Street plunged Thursday, pulling the Dow Jones industrial average down more than 360 points as investors found themselves confronted by two uncomfortable prospects: an end to interest rate cuts and a slowing economy.
Mindful of a warning from the Federal Reserve Wednesday about inflation, the market nervously watched the price of oil, which passed $96 a barrel overnight for the first time before dipping on profit-taking. The Fed, which cut interest rates a quarter point, said in a statement that inflation remained a concern, and oil's ascent to another record raised the possibility not only that the Fed might stop cutting rates, but that it might even consider raising them if inflation accelerates.
Meanwhile, Wall Street also had to contend with concerns about a slowing economy. A report from the Commerce Department indicated consumers scaled back their spending in September as worries mounted about a worsening housing market and further credit market turmoil. And a trade group reported that manufacturing in the U.S. grew in October at the weakest pace since March.
The combination of factors led investors to pull back sharply from Wednesday's rally, in which the Dow climbed 137 points after the Fed said the economy had weathered the summer's credit crisis.