Economic reports and their impact on e-mini futures markets

This week brings a slew of US economic reports. I mean the week that spans the last days of January and the first days of February 2013. Do such reports affect the futures markets, e-mini futures, in particular?

The answer, not surprisingly, is affirmative. They do affect both the stock and futures markets, and since e-mini futures are simply a class of futures markets, very much related to "regular" futures, they get affected as well.

Now, that's not the end of the story yet. Knowing that they can affect the markets is one thing, how and when is another. Let me now address the how and when.

To make my task a bit easier I have written three articles about this week reports and posted them on my awesomely glorious Blogger blog at

The first of the articles addresses the FOMC announcements that can generate quite a bit of volatility about 2:15 PM EST on the day they are broadcast, which can be a Tuesday or a Wednesday. This year it will be Wednesdays all the time starting the last Wednesday of January.

It is usually a good idea to abstain from trading around the announcement time, for at least 15 minutes or so. Especially, if you are not a very experienced trader or don't like very volatile trading situations. Just sit and watch. For more about this issue in the said article about the FOMC meetings that also includes their tentative schedule for 2013. You may want to bookmark this blog post and visit it from time to time so that you don't forget about another FOMC announcement day.

Another article discusses the ADP National Employment Report that is released at 8:15 AM EST towards the end or the beginning of the month. This time around it will be the end of the month of January with the report on the employment situation in the very same month.

All other economic reports that fall out this week are discussed by the last article in this series. As you will find out from it, they happen to be released either at 8:30 AM EST or at 10:00 AM EST on certain days that also tends to be either close to the start of a new month or the end of the month about to expire. These reports are mentioned in detail in the article in question, so I will not go over them here. I will only say that some of them, those issued at 8:30 AM, especially if they coincide with some other economic reports at the same time, can make the market gap compared to the previous daily session close (at 4:15 PM EST for many stock index futures, such as ES, NQ, or YM).

Those gaps can be played nicely using, for instance, George IV, a sound e-mini trading system, currently offered as a strategy. When the gap is in place, the market often likes to move in its direction during the daily trading session that follows the report(s). By the daily session I mean the period from 9:30 AM to 4:15 PM EST that pretty much coincides with the US stock market daily trading session.

The reports at 10:00 AM EST should too be watched carefully as they can lead to a volatility spike shortly after 10:00 AM, usually brief in duration, but you probably don't want to find yourself on the wrong side of it. This spike may also give rise to a more sustainable trend or reverse any early morning trend for good. Either way, you definitely want to pay attention to them if you trade around this time, which I usually don't, but that's a different story.

Posted on January 28th, 2013.