Daily Trading Advisory
DAILY TRADING ADVISORY 19-February-2008
Markets end the week with moderate gains despite warnings and new evidence that the economy is weakening.
Markets rallied strong during yesterday's shortened Globex session in a continuation of late Friday's rally, if the indexes manage to sustain the Presidents Day rally, be ready for a reversal from our resistance levels at 1368.75-1370.00 levels, but if the E-mini SP manage to break up above those levels, the rally could continue with resistance at 1375.00-1376.00 and then 1380.00-1382.00. a close above those areas would indicate a continuation of the rally during the coming sessions.
If the indexes give back yesterday's gains before the opening, expect more sideways trading until a solid break out of the ranges is seen.
WEEKLY PIVOTS FOR WEEK ENDING 22–FEBRUARY-2008
R3 1410.00
R2 1398.00
R1 1365.25
PP 1347.50
S1 1337.50
S2 1323.00
S3 1296.59
ECONOMIC DATA
None
WEEKLY RECAP
On Monday, after reaching strong support at 1320.00, the E-mini SP and all the other indexes recovery their early loses and closed slightly positive for the session. Tuesday, before the market opened, Buffett’s offer to assume $800 billion municipal bonds in liability resulted in a huge gap up for the markets opening, the early strength reached our 1363.00-1364.00 markets turning point, but gave back half of its earnings during the afternoon, the E-mini SP closed at 1349.75 and the Dow cash settle with solid gains at 12373.
Better than expected Retail Sales numbers for the month of January gave the indexes another boost as the rally from the 1330.00’s level continue with strong pace but with low volumes. The E-mini SP opened at 1360.00 and rally immediately to 1364.75. The E-mini SP reached 1367.00 before pulling back to 1361.00, and unable to break bellow support and with the help of a strong E-mini Nasdaq punched to new highs during the last hour of trading reaching 1370.50 while the E-mini Nasdaq got as high as 1829.00 and the E-mini Russell to 720.90. All of the indexes gave back part of their gains before the close and settle well bellow fair value at 1364.00 on the E-mini SP, 1820.25 on the E-mini Nasdaq and 720.90 on the E-mini Russell. The Dow cash added another 178 points closing at 12552.
Thursday’s session, the indexes opened on a strong note, but unable to reach the nightly highs,the indexes started to pull back. Just with the release of Bernanke’s speech, the indexes started a downward move which reached our 1354.00-1353.00 support area on the E-mini SP and 1798.00 on the E-mini Nasdaq. The E-mini SP bounced back to our updated resistance area on the 1361.00-1362.00 zones where our readers took advantage and entered short. The downside pressure took the index down to the 1352.00-1350.00 support level. After trying hard to push lower, buyers stepped in and manage to get as high as 1357.75 where another wave of selling pushed prices to new intraday lows exactly to our third support band on the 1348.50-1347.00 levels. The lows were bought with enthusiasm but failed once more above the 1358.00 where a double top resulted in a late sell off moving the indexes lower and after placing higher lows the markets closed a few points above the daily lows. The E-mini SP lost 12.75 points for the day, the e-mini Nasdaq gave back 26 points and the E-mini Russell settle with a loss of 15.2 points. The Dow cash lost 175 points closing at 12376. Downside risks to growth quoted by Fed Chairman Bernanke before the Senate Banking Committee. Bernanke, was stating the obvious, yet the market chose to put a negative spin on his remarks, notwithstanding the inference that further rate cuts from the Fed are likely.
The release of the economic data on Friday, that included the reading in the New York Empire State Index which came out at its lowest level since May 2003 and the lowest consumer sentiment reading reported by the Univ. of Michigan since February 1992, along with a warning from Best Buy pushed the markets down early Friday. The lower opening on the E-mini SP managed to get reversed during the last two hours of the session as February option expiration contributed to maintain the markets afloat. The E-mini SP ended the session almost unchanged and the E-mini Nasdaq lost 7.75 points for the session. The indexes ended the week with gains of 1.4% for the SP and Dow cash and .7 for the Nasdaq.
FRIDAY’S MARKETS
Markets opened lower for the session as new signs of weakness in the economy, and Greenspan’s commentaries about recession ended the last short covering rally. The E-mini SP opened at 1344.75 and after a pop up to our resistance level at 1346.50 was sold reaching the 1338.75 area. Unable to trade bellow the Globex lows, the index rallied all the way back up to 1349.50 while all the other indexes failed to make new intraday highs. Another wave of selling pushed prices down to 1339.50 on the E-mini SP where support acted correctly and the index bounced back up to 1346.00. Another attempt to the downside resulted in a double bottom at 1338.50 where the E-mini SP started a nice short covering rally that reached Thursday’s settlement at 1351.50 in an effort to close above the 1350.00 level for the February option expiration. The E-mini SP settle up .25 points, the E-mini Nasdaq gave back another 7.75 and the E-mini Russell lost 4.4 points. The Dow cash closed with a loss of 28 points at 12348.
MARKET COMMENTARY AND OUTLOOK
Last Friday I wrote:” The fact that the index moved higher from obvious support but failed to sustain a 7-10 days rally opens once more the possibility of an important move lower, and, the chart should tell us, if that move will take prices first bellow the 1342.00-1340.00 area and then bellow the base pattern at 1332.00-1330.00 then the way to the January lows will be open.”
Friday’s long tail and large volume showed buying support, but that can be a consequence of the February option expiration as the indexes remain in a consolidation move forming a triangle pattern, and only a clear breakout will give us indication of a medium term direction. Last week rally from the 1320.00 area to the high around 1370.00 with only one close “above” our 1363.00-1364.00 area leaves the E-mini SP futures vulnerable to a move down, and the pullback from the 1370.00 high to the Friday’s low at 1338.00 which is the 38.2 Fibonacci retracement form the weekly lows makes me think that in the short term the market is headed for lower prices. The triangle pattern continues to develop at overall lows and this is another bearish sign.
The action on all the indexes is getting more and more tightly which increases the probabilities of a strong breakout, but when occurs, the indexes will have to deal with their previous support and resistance areas.
The outlook for the E-mini Nasdaq looks more bearish, and despite the fact that we can have a one day rally, the index should move lower in the short term, the first signal for a move that could take prices down to new lows will be a close bellow 1755.50.
TODAY’S SESSION
For today’s session, the first hour should tell us if the volume is setting up a continuation of last Friday late rally that could result in a move to resistance on another quite session, and that will give us the ideal multi day downward move that we are looking for.
So, if the market opens lower but turn positive, don’t fight the trend and follow the move, but if the indexes gapped up at the opening beware of a pullback from resistance that reaches settlement before turning back up.
There is resistance at 1355.00-1356.75 on the E-mini SP, 1794.00-1796.00 on the E-mini Nasdaq and 704.50-705.20 on the E-mini Russell. An upside move that stalls at those levels should offer a good short entry for 6-8 points on the E-mini SP, but if the market push higher the 1360.75-1362.25 on the E-mini SP, 1802.00-1804.00 on the E-mini Nasdaq and 709.10-711.00 on the E-mini Russell could be seen. Those areas should offer strong resistance and set up a move down. If those don’t stop a post Presidents day rally then last week highs is all the markets should run before getting back in troubles at 1368.75-1370.00 on the E-mini SP, 1815.00-1816.00 on the E-mini Nasdaq and 715.40-717.50 on the E-mini Russell.
There is initial support at the pivot levels in case the markets rally since the beginning of the session, but if they trade slightly negative buyers should step in at 1346.50-1345.50 on the E-mini SP, 1780.00-1778.50 on the E-mini Nasdaq and 698.70-697.40 on the E-mini Russell, those are pivotal for a rally into today’s session . If the market trades bellow those areas, 1341.00-1339.50 on the E-mini SP, 1771.00-1770.00 on the E-mini Nasdaq and 694.20-693.50 on the E-mini Russell must hold or the chances for a wide range down day will be open. If those levels can not hold the selling pressure, then Friday’s lows at 1337.00-1335.75 on the E-mini SP, 1756.00-1754.50 on the E-mini Nasdaq and 687.00-685.50 on the E-mini Russell will be the only step before putting in jeopardy the 1331.00-1330.00 base built early last week. 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[/QUOTE][/QUOTE][/QUOTE]
DAILY TRADING ADVISORY 19-February-2008
Markets end the week with moderate gains despite warnings and new evidence that the economy is weakening.
Markets rallied strong during yesterday's shortened Globex session in a continuation of late Friday's rally, if the indexes manage to sustain the Presidents Day rally, be ready for a reversal from our resistance levels at 1368.75-1370.00 levels, but if the E-mini SP manage to break up above those levels, the rally could continue with resistance at 1375.00-1376.00 and then 1380.00-1382.00. a close above those areas would indicate a continuation of the rally during the coming sessions.
If the indexes give back yesterday's gains before the opening, expect more sideways trading until a solid break out of the ranges is seen.
WEEKLY PIVOTS FOR WEEK ENDING 22–FEBRUARY-2008
R3 1410.00
R2 1398.00
R1 1365.25
PP 1347.50
S1 1337.50
S2 1323.00
S3 1296.59
ECONOMIC DATA
None
WEEKLY RECAP
On Monday, after reaching strong support at 1320.00, the E-mini SP and all the other indexes recovery their early loses and closed slightly positive for the session. Tuesday, before the market opened, Buffett’s offer to assume $800 billion municipal bonds in liability resulted in a huge gap up for the markets opening, the early strength reached our 1363.00-1364.00 markets turning point, but gave back half of its earnings during the afternoon, the E-mini SP closed at 1349.75 and the Dow cash settle with solid gains at 12373.
Better than expected Retail Sales numbers for the month of January gave the indexes another boost as the rally from the 1330.00’s level continue with strong pace but with low volumes. The E-mini SP opened at 1360.00 and rally immediately to 1364.75. The E-mini SP reached 1367.00 before pulling back to 1361.00, and unable to break bellow support and with the help of a strong E-mini Nasdaq punched to new highs during the last hour of trading reaching 1370.50 while the E-mini Nasdaq got as high as 1829.00 and the E-mini Russell to 720.90. All of the indexes gave back part of their gains before the close and settle well bellow fair value at 1364.00 on the E-mini SP, 1820.25 on the E-mini Nasdaq and 720.90 on the E-mini Russell. The Dow cash added another 178 points closing at 12552.
Thursday’s session, the indexes opened on a strong note, but unable to reach the nightly highs,the indexes started to pull back. Just with the release of Bernanke’s speech, the indexes started a downward move which reached our 1354.00-1353.00 support area on the E-mini SP and 1798.00 on the E-mini Nasdaq. The E-mini SP bounced back to our updated resistance area on the 1361.00-1362.00 zones where our readers took advantage and entered short. The downside pressure took the index down to the 1352.00-1350.00 support level. After trying hard to push lower, buyers stepped in and manage to get as high as 1357.75 where another wave of selling pushed prices to new intraday lows exactly to our third support band on the 1348.50-1347.00 levels. The lows were bought with enthusiasm but failed once more above the 1358.00 where a double top resulted in a late sell off moving the indexes lower and after placing higher lows the markets closed a few points above the daily lows. The E-mini SP lost 12.75 points for the day, the e-mini Nasdaq gave back 26 points and the E-mini Russell settle with a loss of 15.2 points. The Dow cash lost 175 points closing at 12376. Downside risks to growth quoted by Fed Chairman Bernanke before the Senate Banking Committee. Bernanke, was stating the obvious, yet the market chose to put a negative spin on his remarks, notwithstanding the inference that further rate cuts from the Fed are likely.
The release of the economic data on Friday, that included the reading in the New York Empire State Index which came out at its lowest level since May 2003 and the lowest consumer sentiment reading reported by the Univ. of Michigan since February 1992, along with a warning from Best Buy pushed the markets down early Friday. The lower opening on the E-mini SP managed to get reversed during the last two hours of the session as February option expiration contributed to maintain the markets afloat. The E-mini SP ended the session almost unchanged and the E-mini Nasdaq lost 7.75 points for the session. The indexes ended the week with gains of 1.4% for the SP and Dow cash and .7 for the Nasdaq.
Markets will be closed Monday in observance of Presidents Day.
FRIDAY’S MARKETS
Markets opened lower for the session as new signs of weakness in the economy, and Greenspan’s commentaries about recession ended the last short covering rally. The E-mini SP opened at 1344.75 and after a pop up to our resistance level at 1346.50 was sold reaching the 1338.75 area. Unable to trade bellow the Globex lows, the index rallied all the way back up to 1349.50 while all the other indexes failed to make new intraday highs. Another wave of selling pushed prices down to 1339.50 on the E-mini SP where support acted correctly and the index bounced back up to 1346.00. Another attempt to the downside resulted in a double bottom at 1338.50 where the E-mini SP started a nice short covering rally that reached Thursday’s settlement at 1351.50 in an effort to close above the 1350.00 level for the February option expiration. The E-mini SP settle up .25 points, the E-mini Nasdaq gave back another 7.75 and the E-mini Russell lost 4.4 points. The Dow cash closed with a loss of 28 points at 12348.
MARKET COMMENTARY AND OUTLOOK
Last Friday I wrote:” The fact that the index moved higher from obvious support but failed to sustain a 7-10 days rally opens once more the possibility of an important move lower, and, the chart should tell us, if that move will take prices first bellow the 1342.00-1340.00 area and then bellow the base pattern at 1332.00-1330.00 then the way to the January lows will be open.”
Friday’s long tail and large volume showed buying support, but that can be a consequence of the February option expiration as the indexes remain in a consolidation move forming a triangle pattern, and only a clear breakout will give us indication of a medium term direction. Last week rally from the 1320.00 area to the high around 1370.00 with only one close “above” our 1363.00-1364.00 area leaves the E-mini SP futures vulnerable to a move down, and the pullback from the 1370.00 high to the Friday’s low at 1338.00 which is the 38.2 Fibonacci retracement form the weekly lows makes me think that in the short term the market is headed for lower prices. The triangle pattern continues to develop at overall lows and this is another bearish sign.
The action on all the indexes is getting more and more tightly which increases the probabilities of a strong breakout, but when occurs, the indexes will have to deal with their previous support and resistance areas.
The outlook for the E-mini Nasdaq looks more bearish, and despite the fact that we can have a one day rally, the index should move lower in the short term, the first signal for a move that could take prices down to new lows will be a close bellow 1755.50.
TODAY’S SESSION
For today’s session, the first hour should tell us if the volume is setting up a continuation of last Friday late rally that could result in a move to resistance on another quite session, and that will give us the ideal multi day downward move that we are looking for.
So, if the market opens lower but turn positive, don’t fight the trend and follow the move, but if the indexes gapped up at the opening beware of a pullback from resistance that reaches settlement before turning back up.
There is resistance at 1355.00-1356.75 on the E-mini SP, 1794.00-1796.00 on the E-mini Nasdaq and 704.50-705.20 on the E-mini Russell. An upside move that stalls at those levels should offer a good short entry for 6-8 points on the E-mini SP, but if the market push higher the 1360.75-1362.25 on the E-mini SP, 1802.00-1804.00 on the E-mini Nasdaq and 709.10-711.00 on the E-mini Russell could be seen. Those areas should offer strong resistance and set up a move down. If those don’t stop a post Presidents day rally then last week highs is all the markets should run before getting back in troubles at 1368.75-1370.00 on the E-mini SP, 1815.00-1816.00 on the E-mini Nasdaq and 715.40-717.50 on the E-mini Russell.
There is initial support at the pivot levels in case the markets rally since the beginning of the session, but if they trade slightly negative buyers should step in at 1346.50-1345.50 on the E-mini SP, 1780.00-1778.50 on the E-mini Nasdaq and 698.70-697.40 on the E-mini Russell, those are pivotal for a rally into today’s session . If the market trades bellow those areas, 1341.00-1339.50 on the E-mini SP, 1771.00-1770.00 on the E-mini Nasdaq and 694.20-693.50 on the E-mini Russell must hold or the chances for a wide range down day will be open. If those levels can not hold the selling pressure, then Friday’s lows at 1337.00-1335.75 on the E-mini SP, 1756.00-1754.50 on the E-mini Nasdaq and 687.00-685.50 on the E-mini Russell will be the only step before putting in jeopardy the 1331.00-1330.00 base built early last week. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 3 1368.75-1370.00 1815.00-1816.00 715.40-717.50
Resistance 2 1360.75-1362.25 1802.00-1804.00 709.10-711.00
Resistance 1 1355.00-1356.75 1794.00-1796.00 704.50-705.20
PIVOT 1348.50 1785.50 701.20
Support 1 1346.50-1345.50 1780.00-1778.50 698.70-697.40
Support 2 1341.00-1339.50 1771.00-1770.00 694.20-693.50
Support 3 1337.00-1335.75 1756.00-1754.50 687.00-685.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
1390.01 1848.54 731.28
1385.24 1841.46 727.92
1377.50 1830.00 722.50
1369.76 1818.54 717.08
1364.99 1811.46 713.72
1357.25 1800.00 708.30
1349.51 1788.54 702.88
1347.13 1785.00 701.20
1344.74 1781.46 699.52
1337.00 1770.00 694.10
1329.26 1758.54 688.68
1324.49 1751.46 685.32
1316.75 1740.00 679.90
1309.01 1728.54 674.48
1304.24 1721.46 671.12
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 1364.50 1793.25 704.80
AS DAILY LOW 1344.00 1763.25 690.60
S&P NASDAQ RUSSELL
Resistance 3 1368.75-1370.00 1815.00-1816.00 715.40-717.50
Resistance 2 1360.75-1362.25 1802.00-1804.00 709.10-711.00
Resistance 1 1355.00-1356.75 1794.00-1796.00 704.50-705.20
PIVOT 1348.50 1785.50 701.20
Support 1 1346.50-1345.50 1780.00-1778.50 698.70-697.40
Support 2 1341.00-1339.50 1771.00-1770.00 694.20-693.50
Support 3 1337.00-1335.75 1756.00-1754.50 687.00-685.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
1390.01 1848.54 731.28
1385.24 1841.46 727.92
1377.50 1830.00 722.50
1369.76 1818.54 717.08
1364.99 1811.46 713.72
1357.25 1800.00 708.30
1349.51 1788.54 702.88
1347.13 1785.00 701.20
1344.74 1781.46 699.52
1337.00 1770.00 694.10
1329.26 1758.54 688.68
1324.49 1751.46 685.32
1316.75 1740.00 679.90
1309.01 1728.54 674.48
1304.24 1721.46 671.12
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 1364.50 1793.25 704.80
AS DAILY LOW 1344.00 1763.25 690.60
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[/QUOTE][/QUOTE][/QUOTE]