FED week is almost here.

by Larry Levin

Earlier this week the market exploded on a notoriously faulty report, the ADP jobs data. If you remember, it claimed Friday's jobs data would reveal an approximate jobs gain of 189,000. The actual government figure, however, was well below the ADP prognostication at just 94,000. Since the reason for the initial rally was 50% illusory, you might think it should have dropped? But it didn't as you know. Although the real number was 50% lower than the ADP data, it was still much better than what economists had expected.

Peter Cardillo, chief market economist at Avalon Partners was quoted as saying, (the jobs data) "points to an economy that is not slipping into a recession anytime soon, but we're likely to see some sort of a pullback here because most of the news is already digested, and a rate cut is already priced in." I am in agreement with Mr. Cardillo and wouldn't be surprised to see the pit a little pressured with selling come Monday's open.

Because of this good jobs data, the FED may give pause to a 50-point basis cut on Tuesday. After the report, federal funds futures on the Chicago Board of Trade reflected a 48% chance of a 50 basis-point cut, down from 56% before the report's arrival.

We will get a lot of economic reports next week, none being more important than the FOMC decision, however, Monday's pending home sales report should be interesting. It has recently been very bad and I wonder if the market will pay much attention to it this go-around. Later in the week inflation figures and retail sales reports could affect the markets once the "big decision" is behind us.

So as you can see, next week will bring us a great deal of news that should make the markets quite volatile. Trade close to the vest, especially Tuesday afternoon.

Real Time Trading Signals*for

Trade Date: 12/7/07

E-Mini S&P Trades*
(before fees and commissions):

8:33 FT BUy 10.50 = -1.50 all

9:41 ID VA Buy 7.50 = -1.50 all

11:02 ID VA Sell 12.00 = b/e, +1.00, +.25

1:40 FT Buy 10.00 = +.75, -1.50

2:16 ID VA Buy 10.75 = -1.50 all

2:31 ID VA Buy 6.75 = +.75, -.25

2:43 ID VA Buy 6.75 = +.75, b/e

E-Mini Russell Trades*
(before fees and commissions):

1) Buy @ 8:32am at 786.6 = -1.2 & -1.2

2) Sell @ 8:56am at 783.6 = -1.0 & -1.0

3) Sell @ 9:09am at 784.0 = +.4 & -1.5

4) Sell @ 9:34am at 784.6 = -.3 (1 lot)

5) Sell @ 9:50am at 784.4 = +.5 & +1.0

6) Buy @ 10:10am at 784.4 = +.5, +1.0, b/e

7) Buy @ 10:28am at 784.5 = +.5 & +1.2

8) Buy @ 11:00am at 787.2 = +.3 & b/e

9) Buy @ 11:54am at 786.0 = -.2 & b/e

10) Sell @ 12:42pm at 784.1 = -.6 & -.6

11) Sell @ 1:02pm at 785.3 = +.5 & +1.0

12) Sell @ 1:26pm at 785.4 = -1.0 (1 lot)

13) Buy @ 1:49pm at 785.8 = +.3 & +.5

14) Buy @ 2:14pm at 786.9 = +.5 & -1.1

15) Sell @ 2:44pm at 785.2 = +.5 (1 lot)

16) Sell @ 2:47pm at 784.9 = +2.2 (1 lot)

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