December news map update for NAS100 scalpers

[LondonScalper]

It's early October, but this is when I sketch December, because the last month of the year is when the US index calendar gets lumpy and the liquidity gets strange, and I've learned to plan around both before I'm tired and distracted by the holidays.

My rough December map for NAS100, as a London-based trader whose index scalps live mostly between 14:30 and 17:00 London:

First week: US jobs report on the first Friday. That afternoon gets a stand-aside from 13:15 until at least 15:00 for me. The cash open an hour after the release is usually where the real move shows up, and it can be violent.

Second week: US CPI and then the Fed meeting. I treat that Wednesday evening as off limits. In London time the statement comes after my normal hours anyway, but I don't hold anything into it.

Third week: Quad witching around the third Friday. Index futures and options expire and the cash close can produce odd moves. I'm flat by 19:30 London.

From around 20 December: thin markets. I cut size in half and usually stop completely by the 22nd.

Last week of the year: I don't trade NAS100 at all. The few times I tried, the spreads were wide and the moves made little sense.

I'll fill in exact dates when the official calendars firm up in November, but the skeleton goes into my planner now.

[Shadow Trader]

Sketching December now is sensible. I'd add one item to the first week: the ISM services release, which often comes a couple of days before payrolls and can move the index during your 14:30 to 17:00 window.

On the Fed week, I'd also mention the evening timing. The statement lands around 19:00 London, which is outside your hours, but the next morning's futures can open with a gap that makes the London overlap strange. I treat the day after as half size until 15:00.

The quad witching point is good, but I'd say the whole afternoon is unusual, not just the close. On those Fridays I've seen NAS100 pinned around a round number for hours and then jump in the last 30 minutes. Scalps that rely on follow through do badly.

Stopping around 22 December matches my experience. Spreads on index CFDs often widen well before the main holiday.

Do you look at the Santa rally pattern at all, or is that too unreliable to plan around?

[Fairman]

Third week: Quad witching around the third Friday.

One addition for that third Friday in December: it's also when the annual Nasdaq-100 reconstitution takes effect, after the close. Funds tracking the index rebalance into the closing auction on top of the quarterly futures and options expiry, so that close tends to be one of the heaviest volume prints of the year. This year the third Friday is 18 December. The other December quirk for a London-based index trader is that the Fed's December meeting comes with the new projections and the dot plot, which gives the market more to chew on than a normal statement. The move often carries into the next day's European morning rather than finishing in the US evening, so the day after the Fed is worth treating as part of the event window too.

[Shadow Trader]

Fairman's reconstitution point fills a gap in my own map, and it makes the second week busier than it looks. The Fed decision lands on Wednesday 9 December at 19:00 London, with the projections and dot plot.

The next day, Thursday 10 December, is the usual roll date for the December index futures into March. If your NAS100 CFD is priced off the future rather than the cash index, the roll can show up as a jump on the chart and a cash adjustment on any open position.

That jump also shifts levels drawn the day before by the roll difference. On a futures based CFD, I redraw everything on the morning of the 10th rather than trusting Wednesday's lines.

The reconstitution list is normally published after the US close on the Friday a week before it takes effect, which would be the evening of 11 December. It rarely moves the index much that night, but it sets up the heavy closing auction on the 18th that Fairman described.

So for me the stretch from the Fed to the following Monday counts as one event window. It's worth checking which type of CFD you trade, because the contract specification says it plainly and the chart doesn't.