2:00pm (EST)

Futures can cause some sleepless nights which is one reason we don’t trade them because we would never get any sleep.  When you are long call options and futures are showing a higher market before you hit the rack then you can sleep tight.  However, when futures are soaring and you are short the market, or own put options, you might find yourself grabbing a midnight snack while checking on your computer.

We also like to say after-hours trading and futures don’t really count until the market opens.  What really matters is the homework you do and keeping your emotions in check.

We had a feeling economic news would disappoint today and we also felt Spain’s bond auction wouldn’t be as smooth as Wall Street was predicting.  And, after a slightly positive start, all three major indexes are firmly in the red as we head into the second half of trading. 

Initial Claims came in at 386,000 versus expectations for a print of 370,000.  Continuing Claims were 3.29 million versus expectations for 3.3 million.  The Philadelphia Fed Manufacturing number disappointed at 8.5 which was well below the suit-and-ties guesstimates for a reading of 12.  And finally, Existing Home Sales were also a drag as March sales came in at 4.48 million versus calls for 4.62 million units.

Earnings came in better-than-expected across the board this morning as a number of companies beat expectations but many are still missing on revenue numbers.  The talking heads and Wall Street pros are saying companies are “beating” estimates but to us when you miss on 1 out of 2 estimates, you “missed” estimates.  It’s kind of like the half empty/ half full argument.

As we head to press, the Dow is down 65 points to 12,966 while the S&P 500 is off by 7 points t o 1,378.  The Nasdaq is lower by 15 points to 3,016.

We may have action to take on a few trades later this afternoon.  The 4 trades we released on Tuesday are all doing well and they were meant to be “quick” hits, meaning we plan on being in and out as we wait for confirmation of a continued breakdown.  Until it happens, it’s best to take profits while you can to continue building up your trading account.

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