c08 JWBT016-Busby September 30, 2008 14:0 Printer: TBD
Making Money with Bernanke 101a glance. Specifically, I need to know the price of the S&P 500 futures, the
Nasdaq 100 futures, and Dow 30 futures, and the Dax futures. Lately, I have
also been closely following the Dow Jones EuroStoxx. Per the exchange,
this index contains 50 stocks billed as “supersector leaders” from across
Europe. On April 30, 2008, the numbers were as follows when I jotted them
down:S&P 500 1400.00
Nasdaq 100 1950.00
Dow 30 12950.00
Dax 7000.00Those prices are important because they represent the value that
traders around the world are placing on these specific investments prior
to the news. Once the news is known, if prices move up and break above
my numbers, I will take a long position. If they move down and break below
them, I will go short. Not only will I use the numbers on this date, but I will
use them as benchmarks from today until the next Fed Day. If prices are
moving up and approaching those numbers, there will be some resistance
there. If prices are going down, expect some support to step in near those
prices. Therefore, these price points are important pivot numbers for my
near-term trading.
These numbers are so important that I track them on a chart. I write
down prices on each of the Seven Sisters. These are so important that I
refer to them over and over again in the days that follow the Fed news.
Figure 8.1 is the key number chart for April 30, 2008. The numbers on the
chart are for Fed Day exclusively. I track the daily open, high, low, the
1:15PMprice and the daily close.
At precisely 1:15PMon April 30, 2008, the decision is known. For a few
moments on this date, the markets seemed confused. I did not see a play
until 1:16 and I stayed out. I cautioned my listening audience that I thoughtFIGURE 8.1 I chart prices just seconds before the Fed news is released. These
numbers are very important, and I use them as support, resistance, and pivot prices
for weeks.