DAILY TRADING ADVISORY 18-November-2008
Stocks fluctuate on recession fears, NY Empire State Index lower than expected and Industrial Production and capacity Utilization better than expected. Forecasters look for a 14 month recession.
ECONOMIC DATA
8:30 AM Core PPI
8:30 AM PPI
9:00 AM Net Foreign Purchases
YESTERDAY’S MARKET
After trading at 874.25 during the Globex session, the E-mini SP opened at 859.25 from where it moved higher finding early resistance at 862.00. The index pulled back to 856.00 and after holding pushed to new early highs at 864.00 from where it pulled back once more to the 856.00 level and rallied to 866.00 where the early strength lost its momentum. The SP sold off to new intraday lows at 847.00, bounced back up to 856.00, posted a higher low at 859.50 and traded sideways with a slightly bullish bias reaching Friday’s settlement. As the low volumes continued, the indexes traded on a sideways pattern with a slightly bullish bias that finally broke higher matching the 874.25 Globex high and then pushed to a new intraday 878.25 new high. The E-mini SP pulled back to 872.00 and rally to 881.75, just below our 882.25 resistance area where the rally failed resulting in a downward move to 866.25 from where the SP bounced to 872.00 and got sold reaching 861.00. Another rally pushed the index back up to 872.00 where the short covering rally was rejected. Once more the SP pulled back down to 866.00 from where it rallied to the Globex 874.25 high printing a double top. After trading in a sideways pattern between the 874.00 and 862.00 areas for the next hour, the SP finally broke down and sold off making its daily lows near the end of the session. For the day, the SP lost 10.50 points closing the session at 851.00, the Nasdaq ended higher by 3 points at 1158.50, and the Russell gained 1.80 points ending the day at 449.50. The Dow lost another 193.00 points and closed the session at 8323.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:”Markets continue to trade with huge volatility reflected in intraday wide ranges and huge swings. Thursday’s new lows and the huge reversal from what can be view as a false break did not showed the expected follow through during Friday’s session but the rally from the obvious support, despite that the indexes retracted during Fridays, could be the initial movement of a strong bear market rally that could reach the 1040.00-1060.00 levels during the next two weeks. The key for this scenario to happen will be the capacity of the SP to hold during the next two days the 832.00 area. Friday’s close at the daily lows could be seen as a temporary exhausting move that could hold in front of this option expiration week, however, Thursday’s rally may be a failed one day countertrend move and if the markets won’t trade higher during the next two sessions, or the SP breaks back below the 832.00. For today’s trading session, on a weak opening that holds above the 848.00-846.00 area on the SP, or an initial sell off that reaches my 832.00 area during the first 90 minutes of the session but lost momentum there, be ready for a huge reversal, that could reach the 910.00 level once it get back up above the 889.75, but if that 889.75 area holds intact, then the way will be open for new lows during the week. On the other side of the coin, if the indexes rally before the opening to start the session near fair value, and gain upside momentum during the first 45 minutes of trading, look for an upside move all the time that the early lows hold.”
Yesterday’s early action held perfectly our 848.00-846.00 area, actually, the daily low was printed just at those levels, 847.00, but the scenario where the SP failed just above our 880.00 pivot point without trading above the 889.75 level, has opened the way for lower prices, maybe another test of the past week lows or a higher low near our important 832.00 short term key support area. Yesterday’s scenario has not changed yet, even with the rejected rally that resulted in a sell off. The intraday action showed support and the ranges where not so wide, also, the losses, besides the Dow were moderate. So one day has passed and the SP held the 832.00 level, if that level can resist the selling pressure during today’s trading session, it may be that the markets are ready for a second degree countertrend rally, a 12-15 days upside move that pushes prices up well above last week highs around the 915.00 area.
On the other side of the coin, failure to move higher during today’s trading session will point first, to a test of the 832.00 area on the SP and the 8000 level on the Dow, but if a higher low is in process to be established, the indexes should be trading higher for Friday’s November option expiration.
The first sign of weakness will be the Dow trading below the 8200 area, if that happens the remaining longs will start to throw away the towel waiting for the markets to test the levels I just mentioned. If we see the opposite and early sell off that holds, and a rally that carries the SP above the 866.00 level and the Dow to the 8600, then the consolidation between the recent highs and lows probably will be resolved to the upside.
For today’s trading session, before the opening we’ll get the PPI numbers, expectations are for a sharp drop on the regular number and a zero increase in the core rate, is that good for the U.S. economy, not really, the real p[problem is deflation, lower assets values, but the initial markets reaction could be a powerful short covering rally, if that happens, the SP that at the moment that I am writing my report is trading at 844.00, could reach the 866.00 area, however if the indexes move down, expect the important 832.00 level to be tested, holding there during the session could lead to a multi day rally once that market breaks above 855.00. If that area does not hold, forget about any long position.
.
TODAY’S SESSION
There is initial resistance at 858.00-860.00 on the SP, 1167.50-1168.50 on the Nasdaq and 453.40-455.20 on the Russell, if those are exceeded expect a test of the short term pivot point at 865.00-866.00 on the SP, 1173.00-1175.00 on the Nasdaq and 461.40-461.90 on the Russell. If the markets are weak, or the current consolidation will continue, those areas should hold, however, if the indexes want to show their muscles expect the next levels at 870.00-872.00 on the SP, 1185.00-1186.50 on the Nasdaq and 565.20-467.80 on the Russell to be reached. Breaking above them could indicate that short term low has been posted.
Initial support is at 847.00-845.50 on the SP, 1152.00-1150.00 on the Nasdaq and 446.50-445.20 on the Russell, trading below them will point for a test of the next support levels at 841.00-838.50 on the SP, 1144.00-1142.00 on the Nasdaq and 442.20-441.00 on the Russell. If those can not hold the selling g pressure then the KEY SUPPORT levels at 833.00-831.50 on the SP, 1135.00-1133.00 on the Nasdaq and 437.30-435.80 on the Russell will get visited. If the markets break down below them and spend more than 15 minutes without showing a comeback of the buyers, forget about any long position as much lower prices could be seen during today’s trading session or in the following days. GOOD LUCK.
Futures and options trading have large potential rewards, but also LARGE POTENTIAL RISK. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy or sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in this document. The past performance of any trading system or methodology is not necessarily indicative of futures results.
DAY TRADING INVOLVES HIGH RISK AND YOU CAN LOSE A LOT OF MONEY.
Every effort has been made to accurately represent all of our products and it's potential. As with any business there is a risk of loss of capital and there is no guarantee that you will earn any money. The financial markets are risky .Investing is risky. The foregoing has been prepared only and solely for informational purposes and is not a solicitation or an offer to buy or sell any security, option or futures contract. Opinion is based on historical research but there is not guarantee that futures results will be profitable. We are not advocating or recommending trading futures and our services, notes and entry and exit prices to the markets only reflects our opinion an a manner how markets can be traded. We mention many indexes like the S&P, NASDAQ, Russell, Dow Jones as T-Bonds only because they are the most known and liquid markets, and not because we recommend in any way to be traded.
You can lose more than your initial investment.
We are not Brokers, Registered Trading Advisors, Registered Investment Advisors or Commodity Trading Advisors. All the material contained here or in any communication is only for information purposes and part of our thoughts and personal conclusions.
Copyright © by theminitrade.com
Stocks fluctuate on recession fears, NY Empire State Index lower than expected and Industrial Production and capacity Utilization better than expected. Forecasters look for a 14 month recession.
ECONOMIC DATA
8:30 AM Core PPI
8:30 AM PPI
9:00 AM Net Foreign Purchases
YESTERDAY’S MARKET
After trading at 874.25 during the Globex session, the E-mini SP opened at 859.25 from where it moved higher finding early resistance at 862.00. The index pulled back to 856.00 and after holding pushed to new early highs at 864.00 from where it pulled back once more to the 856.00 level and rallied to 866.00 where the early strength lost its momentum. The SP sold off to new intraday lows at 847.00, bounced back up to 856.00, posted a higher low at 859.50 and traded sideways with a slightly bullish bias reaching Friday’s settlement. As the low volumes continued, the indexes traded on a sideways pattern with a slightly bullish bias that finally broke higher matching the 874.25 Globex high and then pushed to a new intraday 878.25 new high. The E-mini SP pulled back to 872.00 and rally to 881.75, just below our 882.25 resistance area where the rally failed resulting in a downward move to 866.25 from where the SP bounced to 872.00 and got sold reaching 861.00. Another rally pushed the index back up to 872.00 where the short covering rally was rejected. Once more the SP pulled back down to 866.00 from where it rallied to the Globex 874.25 high printing a double top. After trading in a sideways pattern between the 874.00 and 862.00 areas for the next hour, the SP finally broke down and sold off making its daily lows near the end of the session. For the day, the SP lost 10.50 points closing the session at 851.00, the Nasdaq ended higher by 3 points at 1158.50, and the Russell gained 1.80 points ending the day at 449.50. The Dow lost another 193.00 points and closed the session at 8323.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:”Markets continue to trade with huge volatility reflected in intraday wide ranges and huge swings. Thursday’s new lows and the huge reversal from what can be view as a false break did not showed the expected follow through during Friday’s session but the rally from the obvious support, despite that the indexes retracted during Fridays, could be the initial movement of a strong bear market rally that could reach the 1040.00-1060.00 levels during the next two weeks. The key for this scenario to happen will be the capacity of the SP to hold during the next two days the 832.00 area. Friday’s close at the daily lows could be seen as a temporary exhausting move that could hold in front of this option expiration week, however, Thursday’s rally may be a failed one day countertrend move and if the markets won’t trade higher during the next two sessions, or the SP breaks back below the 832.00. For today’s trading session, on a weak opening that holds above the 848.00-846.00 area on the SP, or an initial sell off that reaches my 832.00 area during the first 90 minutes of the session but lost momentum there, be ready for a huge reversal, that could reach the 910.00 level once it get back up above the 889.75, but if that 889.75 area holds intact, then the way will be open for new lows during the week. On the other side of the coin, if the indexes rally before the opening to start the session near fair value, and gain upside momentum during the first 45 minutes of trading, look for an upside move all the time that the early lows hold.”
Yesterday’s early action held perfectly our 848.00-846.00 area, actually, the daily low was printed just at those levels, 847.00, but the scenario where the SP failed just above our 880.00 pivot point without trading above the 889.75 level, has opened the way for lower prices, maybe another test of the past week lows or a higher low near our important 832.00 short term key support area. Yesterday’s scenario has not changed yet, even with the rejected rally that resulted in a sell off. The intraday action showed support and the ranges where not so wide, also, the losses, besides the Dow were moderate. So one day has passed and the SP held the 832.00 level, if that level can resist the selling pressure during today’s trading session, it may be that the markets are ready for a second degree countertrend rally, a 12-15 days upside move that pushes prices up well above last week highs around the 915.00 area.
On the other side of the coin, failure to move higher during today’s trading session will point first, to a test of the 832.00 area on the SP and the 8000 level on the Dow, but if a higher low is in process to be established, the indexes should be trading higher for Friday’s November option expiration.
The first sign of weakness will be the Dow trading below the 8200 area, if that happens the remaining longs will start to throw away the towel waiting for the markets to test the levels I just mentioned. If we see the opposite and early sell off that holds, and a rally that carries the SP above the 866.00 level and the Dow to the 8600, then the consolidation between the recent highs and lows probably will be resolved to the upside.
For today’s trading session, before the opening we’ll get the PPI numbers, expectations are for a sharp drop on the regular number and a zero increase in the core rate, is that good for the U.S. economy, not really, the real p[problem is deflation, lower assets values, but the initial markets reaction could be a powerful short covering rally, if that happens, the SP that at the moment that I am writing my report is trading at 844.00, could reach the 866.00 area, however if the indexes move down, expect the important 832.00 level to be tested, holding there during the session could lead to a multi day rally once that market breaks above 855.00. If that area does not hold, forget about any long position.
.
TODAY’S SESSION
There is initial resistance at 858.00-860.00 on the SP, 1167.50-1168.50 on the Nasdaq and 453.40-455.20 on the Russell, if those are exceeded expect a test of the short term pivot point at 865.00-866.00 on the SP, 1173.00-1175.00 on the Nasdaq and 461.40-461.90 on the Russell. If the markets are weak, or the current consolidation will continue, those areas should hold, however, if the indexes want to show their muscles expect the next levels at 870.00-872.00 on the SP, 1185.00-1186.50 on the Nasdaq and 565.20-467.80 on the Russell to be reached. Breaking above them could indicate that short term low has been posted.
Initial support is at 847.00-845.50 on the SP, 1152.00-1150.00 on the Nasdaq and 446.50-445.20 on the Russell, trading below them will point for a test of the next support levels at 841.00-838.50 on the SP, 1144.00-1142.00 on the Nasdaq and 442.20-441.00 on the Russell. If those can not hold the selling g pressure then the KEY SUPPORT levels at 833.00-831.50 on the SP, 1135.00-1133.00 on the Nasdaq and 437.30-435.80 on the Russell will get visited. If the markets break down below them and spend more than 15 minutes without showing a comeback of the buyers, forget about any long position as much lower prices could be seen during today’s trading session or in the following days. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 881.00-882.50 1194.50-1197.00 473.40-473.70
Resistance 3 870.00-872.00 1185.00-1186.50 465.30-467.80
Resistance 2 865.00-866.00 1173.00-1175.00 461.40-461.90
Resistance 1 858.00-860.00 1167.50-1168.50 453.40-455.20
PIVOT 860.00 1162.50 452.20
Support 1 847.00-845.50 1152.00-1150.00 446.50-445.20
Support 2 841.00-838.50 1144.00-1142.50 442.20-441.00
Support 3 833.00-831.50 1135.00-1133.00 437.30-435.80
Support 4 825.00-823.00 1116.00-1114.00 430.00-429.10
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
937.98 1268.84 499.25
929.77 1257.16 494.15
916.50 1238.25 485.90
903.23 1219.34 477.65
895.02 1207.66 472.55
881.75 1188.75 464.30
868.48 1169.84 456.05
864.38 1164.00 453.50
860.27 1158.16 450.95
847.00 1139.25 442.70
833.73 1120.34 434.45
825.52 1108.66 429.35
812.25 1089.75 421.10
798.98 1070.84 412.85
790.77 1059.16 407.75
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 866.25 1198.50 456.90
AS DAILY LOW 831.50 1148.00 435.30
S&P NASDAQ RUSSELL
Resistance 4 881.00-882.50 1194.50-1197.00 473.40-473.70
Resistance 3 870.00-872.00 1185.00-1186.50 465.30-467.80
Resistance 2 865.00-866.00 1173.00-1175.00 461.40-461.90
Resistance 1 858.00-860.00 1167.50-1168.50 453.40-455.20
PIVOT 860.00 1162.50 452.20
Support 1 847.00-845.50 1152.00-1150.00 446.50-445.20
Support 2 841.00-838.50 1144.00-1142.50 442.20-441.00
Support 3 833.00-831.50 1135.00-1133.00 437.30-435.80
Support 4 825.00-823.00 1116.00-1114.00 430.00-429.10
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
937.98 1268.84 499.25
929.77 1257.16 494.15
916.50 1238.25 485.90
903.23 1219.34 477.65
895.02 1207.66 472.55
881.75 1188.75 464.30
868.48 1169.84 456.05
864.38 1164.00 453.50
860.27 1158.16 450.95
847.00 1139.25 442.70
833.73 1120.34 434.45
825.52 1108.66 429.35
812.25 1089.75 421.10
798.98 1070.84 412.85
790.77 1059.16 407.75
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 866.25 1198.50 456.90
AS DAILY LOW 831.50 1148.00 435.30
Futures and options trading have large potential rewards, but also LARGE POTENTIAL RISK. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy or sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in this document. The past performance of any trading system or methodology is not necessarily indicative of futures results.
DAY TRADING INVOLVES HIGH RISK AND YOU CAN LOSE A LOT OF MONEY.
Every effort has been made to accurately represent all of our products and it's potential. As with any business there is a risk of loss of capital and there is no guarantee that you will earn any money. The financial markets are risky .Investing is risky. The foregoing has been prepared only and solely for informational purposes and is not a solicitation or an offer to buy or sell any security, option or futures contract. Opinion is based on historical research but there is not guarantee that futures results will be profitable. We are not advocating or recommending trading futures and our services, notes and entry and exit prices to the markets only reflects our opinion an a manner how markets can be traded. We mention many indexes like the S&P, NASDAQ, Russell, Dow Jones as T-Bonds only because they are the most known and liquid markets, and not because we recommend in any way to be traded.
You can lose more than your initial investment.
We are not Brokers, Registered Trading Advisors, Registered Investment Advisors or Commodity Trading Advisors. All the material contained here or in any communication is only for information purposes and part of our thoughts and personal conclusions.
Copyright © by theminitrade.com