On Tap – the FOMC decision!

by Larry Levin

This week's economic calendar is full of important reports. Monday through Friday we'll get data from; new home sales, consumer confidence, GDP, Chicago PMI, construction spending, ISM, and the monthly jobs report…just to name a few. And during this long list of data, the FOMC will meet to (surely) slash the fed funds rate again.

All of the data will probably be viewed in two segments, the first half being dominated by the FOMC decision Wednesday afternoon and its statement on the economy.

Until we learned about the SocGen induced market sell-off, the Fed's decision was believed to be a certain additional 50-basis point cut. Now the decision is up in the air because of the emergency rate cut of 75-basis points. The Fed didn't react to economic data last week, but to the market which it is not supposed to do, lest it be accused of pandering to Wall Street over Main Street . Its decision will be interesting, as well as its statement.

Although the FOMC decision will be huge, its importance will be rivaled by the second half of the week's important data: Friday's monthly jobs report. The last jobs report from the Labor Department started the January stock market slide. That report showed a surprise spike in the unemployment rate, to 5%, and said companies added a mere 18,000 nonfarm jobs on a seasonally adjusted basis, the most anemic job growth since August 2003.

The jobs reports are fraught with revisions. With the stock market still in a precarious position, I am expecting to see a "surprise revision" that takes back a lot of last month's shock & awe from the labor front. Wouldn't that be a convenient coincidence to help give the White House's "stimulus" plan much needed help.

Real Time Trading Signals*for

Trade Date: 1/25/08

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

8:33 B/A Buy 68.50 = +.75, +.50, b/e

9:30 ID VA Buy 2.25 = -1.50 all

9:36 VA Buy 52.75 = +.75, +3.00, +2.75

10:30 OTF Sell 54.25 = -.50 all

10:58 VA Buy 52.75 = +.75, b/e, +2.00

1:15 FT Sell 5.75 = +.75, -1.50, -1.50

1:40 FT Sell 7.75 = +.75, +1.75, +4.75

2:28 FT Buy 38.00 = +.75, b/e

2:33 FT Buy 37.50 = +.75, b/e

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

1) Sell @ 9:16am at 701.8 = b/e (1 lot)

2) Sell @ 9:34am at 700.6 = +1.5 (1 lot)

3) Buy @ 10:25am at 698.7 = +.5, +1.0

4) Buy @ 10:50am at 701.5 = b/e & +1.5

5) Sell @ 12:39pm at 690.6 = +3.2 (1 lot)

6) Sell @ 12:55pm at 688.7 = -1.3 & -1.3

7) Sell @ 1:21pm at 690.8 = -1.4 & -1.4

8) Buy @ 1:27pm at 690.4 = -1.2 & -1.2

9) Sell @ 1:36pm at 690.3 = +.5 & +1.2

10) Buy @ 2:27pm at 690.1 = b/e (1 lot)

11) Buy @ 2:49pm at 688.5 = -1.3 & -1.3

12) Sell @ 2:56pm at 688.6 = -1.0 & -1.0…-$300.00


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