On Tuesday April 12th the eminiglobex system was long 1 contract of ES emini and was stopped out for a loss of 12.25 points or $612.50 per contract. As with all eminiglobex trades, there was excellent historic expectation for this trade and combined with the positive bias of April opex week, I was happy with the entry. There was a slight wildcard in that it was the beginning of earnings season. Earnings season has the potential to change the tone of the market, but whilst AA results slightly missed, the markets reaction was muted, so this was not a concern.
I spend a lot of time reviewing losing trades, and one thing I noticed was that there was no Fed POMO activity on April 12th. After some research, other recent dates with no POMO activity were 10th Feb, 10th March, 11th March, 15th March, April 1st, April 8th. With the exception of April 1st (which has its own bullish seasonal bias) all of these dates had some selling pressure at some point in the session, with some heavy selling on March 10th, March 15th and April 12th. Whilst it is to few instances to draw any major conclusions, it may be indicative that a lack of POMO activity is impacting the market. The fed activity (QE2) is currently due to end in June 2011, so this could have a huge impact on markets.
The POMO schedule can be seen here . There is no POMO activity on 21st April, 22nd April or 27th April. The next schedule release will be at 2pm on May 11, 2011.
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