DAILY TRADING ADVISORY 29-April-2009
World markets traded under pressure as swine flu spreads. A report calls Citi and BAC to increase their capital, Consumer Confidence jumps to 39.2 on stock markets recovery; and the S&P Case-Shiller Home Price Index coming out showing an 18.6% decrease indicating that the market may be stabilizing. Markets rallied but failed to hold their gains into the close.
ECONOMIC DATA
8:30 AM GDP- adv.
8:30 AM Chain Deflator- adv.
10.35 AM Crude Inventories
1.15 PM FOMC Rate Decision
YESTERDAY’S MARKET
For a second session on a row markets started the day trading with losses. The E-mini SP started the session at 841.50 from where it bounced to 846.00; a pullback to 842.75 gave way to another upside move that reached 847.25. After trading near the intraday highs for a few minutes, the SP broke higher reaching 848.75.once the Consumer Confidence data get released, the SP rallied to 854.50. The SP backed off to 851.00 and bounced to new high at 855.50 and then to 858.50 where the rebound ended. The SP pulled back to 852.50 and with volumes running very light, the SP bounced to 854.50 and pulled back to 851.00. The SP bounced once more to 858.00 where the double top gave way to a test of the 852.00 area. With the markets stalled in a 5 point range, the session continued with no so much involvement but some small short covering on the SP gave way to a new high at 861.50 and after trading below that area and the 858.00 level, it pushed down to 855.50, bounced a few points and pushed down to test the 852.00 areas closing around there. For the day, the SP lost 5.00 points and closed at 851.75, the Nasdaq ended lower by 12.75 points closing the session at 1360.50 and the Russell closed almost unchanged at 470.90. The Dow lost 8 points and settled at 8016.
.
MARKET COMMENTARY AND OUTLOOK
Last Friday I wrote: “This time was the flu, but this is the third Monday in a row that the markets are under pressure. This flue fear could last for one or two more days, but the importance of the trading pattern continues to be the same. The SP has not been able to close above the last high, and that is threatening the recent rally, the Dow has been trading in some kind of congestion between the 7800 and 8200 area, and the NQ which has been the most bullish index keeps holding its powerful trend. Yesterday I wrote that we could see this trend get resolved in three different ways, a surprising continuation pattern that pushes the SP above the 900.00 area, or just a marginal new high that leaves late longs trapped at the highs, the other one, is for the markets to exhaust the uptrend, by a spike, or by this kind of sideways pattern that finally gets broken to the downside, and yesterday’s negative session keeps this scenario open. So, if the scenario that the market will fail at these levels will become the one that its true, the selling that we saw yesterday will have to show some follow through and break the recent support levels around the 831.00 area on the SP, and obviously the 873.00-875.00 area must remain intact on a closing basis, because if the SP closes 2 times above it, it could become strong support and give this index the momentum to try to get near the 900.00. For today’s trading session, selling the rallies all the time that the SP keeps trading below yesterday’s highs or the NQ does not break above 1385 may be the way to go but early support could be found around the 850.00 level on the SP and the selling pressure will be stronger, only below 843.00.”
Once more a lower opening gave way to a strong upside move, nothing seems to break the current bear market rally and the pattern that have the indexes trading in a wide range, 831.00-875.00 on the SP and 7800-8200 on the Dow is still holding; the bullishness on the Nasdaq continues to be the leading force behind this rally.
Nothing indicates yet that this sideways pattern will get broke to the upside, but evidence that the markets will trend down has not been seen yet. However if the markets put a lower high or marginal new high around the 875.00 area on the SP and 8200 on the Dow, those may be great levels to get short. The other probable scenario is that the markets have already topped and that the consolidation that we have seen during the last two sessions where the markets have started the day with extreme pressure, then rally and then trade lower are the first signals that the upside move have been exhausted. I assume that for the markets to start and trade down we need to see a wide range negative session on the Nasdaq and some follow through during the next session, and today, with the FOMC Rate decision to get released, the markets could just trade at a new marginal high, after a spike, or initiate the downward move no matter the end of month bullish bias.
While I still favor a multi day wide sell off, trading sessions where we have an FOMC rate decision, tend to be tricky, and many times, the real trend is seen during the following day, so, with the difficult to predict what can happen during today’s trading session, be aware that the struggling upside move should be able to continue for the rest of the week even if we have one negative session, but a close below 831.00 could be the first indication that the markets will start to fall.
The early part of the session will be influenced by the economic data, if those are not worst than expected we should see some short covering in front of the interest rate decision. Once the first 2 hours of trading finish, the market should enter in a "Mexican Siesta or midday sleep" period where nothing happens and everybody takes a couple of hours or goes for and early lunch. Then 15-20 minutes before the announcement, the early move should get reversed as traders start to lighten positions. When the FOMC decision comes out, we should see three different moves during the next 40 minutes, an initial impulsive move that fails, a reversal of that move and the final trend move which is the one that we traders try to follow. Only if you have big bucks and wide stops get involved, and take into account that if you are lucky and you go in the right direction, you could have a quick nice profit. Anyway, stops must be wider than in a regular trading session.
For the early going, if the SP opens below 850.00 but get reversed after the first 40 minutes of the session, expect some short covering that could push the index up to yesterday’s highs.
TODAY’S SESSION
There is good resistance at 855.00-856.50 on the SP, 1368.00-1370.00 on the Nasdaq and 473.20-474.10 on the Russell, if the markets fail there, look for some profit taking before the FOMC announcement gets released, but if they trade above them, the next resistance levels at yesterday’s highs, 861.00-863.00 on the SP, 1383.50-1385.00 on the Nasdaq and 475.40-476.20 on the Russell may get tested. If those can not hold, look for the markets to push higher reaching 865.00-867.50 on the SP, 1382.25-1384.00 on the Nasdaq and 480.30-481.60 on the Russell. Trading above them will clear the way for a test of the 875.00 area on the SP.
Initial support is at 846.50-845.50 on the SP, 1355.00-1354.00 on the Nasdaq and 467.70-466.90 on the Russell. Trading below could push the indexes to a test of yesterday’s Globex lows at 839.00-838.00 on the SP, 1349.50-1348.00 on the Nasdaq and 463.80-461.50 on the Russell. A successful test of those areas, could give way to a strong short covering rally, but if the markets fail there, then a visit to 833.00-832.00 on the SP, 1342.00-1340.00 on the Nasdaq and 457.80-456.10 on the Russell may be seen before some bulls jump in. 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
World markets traded under pressure as swine flu spreads. A report calls Citi and BAC to increase their capital, Consumer Confidence jumps to 39.2 on stock markets recovery; and the S&P Case-Shiller Home Price Index coming out showing an 18.6% decrease indicating that the market may be stabilizing. Markets rallied but failed to hold their gains into the close.
ECONOMIC DATA
8:30 AM GDP- adv.
8:30 AM Chain Deflator- adv.
10.35 AM Crude Inventories
1.15 PM FOMC Rate Decision
YESTERDAY’S MARKET
For a second session on a row markets started the day trading with losses. The E-mini SP started the session at 841.50 from where it bounced to 846.00; a pullback to 842.75 gave way to another upside move that reached 847.25. After trading near the intraday highs for a few minutes, the SP broke higher reaching 848.75.once the Consumer Confidence data get released, the SP rallied to 854.50. The SP backed off to 851.00 and bounced to new high at 855.50 and then to 858.50 where the rebound ended. The SP pulled back to 852.50 and with volumes running very light, the SP bounced to 854.50 and pulled back to 851.00. The SP bounced once more to 858.00 where the double top gave way to a test of the 852.00 area. With the markets stalled in a 5 point range, the session continued with no so much involvement but some small short covering on the SP gave way to a new high at 861.50 and after trading below that area and the 858.00 level, it pushed down to 855.50, bounced a few points and pushed down to test the 852.00 areas closing around there. For the day, the SP lost 5.00 points and closed at 851.75, the Nasdaq ended lower by 12.75 points closing the session at 1360.50 and the Russell closed almost unchanged at 470.90. The Dow lost 8 points and settled at 8016.
.
MARKET COMMENTARY AND OUTLOOK
Last Friday I wrote: “This time was the flu, but this is the third Monday in a row that the markets are under pressure. This flue fear could last for one or two more days, but the importance of the trading pattern continues to be the same. The SP has not been able to close above the last high, and that is threatening the recent rally, the Dow has been trading in some kind of congestion between the 7800 and 8200 area, and the NQ which has been the most bullish index keeps holding its powerful trend. Yesterday I wrote that we could see this trend get resolved in three different ways, a surprising continuation pattern that pushes the SP above the 900.00 area, or just a marginal new high that leaves late longs trapped at the highs, the other one, is for the markets to exhaust the uptrend, by a spike, or by this kind of sideways pattern that finally gets broken to the downside, and yesterday’s negative session keeps this scenario open. So, if the scenario that the market will fail at these levels will become the one that its true, the selling that we saw yesterday will have to show some follow through and break the recent support levels around the 831.00 area on the SP, and obviously the 873.00-875.00 area must remain intact on a closing basis, because if the SP closes 2 times above it, it could become strong support and give this index the momentum to try to get near the 900.00. For today’s trading session, selling the rallies all the time that the SP keeps trading below yesterday’s highs or the NQ does not break above 1385 may be the way to go but early support could be found around the 850.00 level on the SP and the selling pressure will be stronger, only below 843.00.”
Once more a lower opening gave way to a strong upside move, nothing seems to break the current bear market rally and the pattern that have the indexes trading in a wide range, 831.00-875.00 on the SP and 7800-8200 on the Dow is still holding; the bullishness on the Nasdaq continues to be the leading force behind this rally.
Nothing indicates yet that this sideways pattern will get broke to the upside, but evidence that the markets will trend down has not been seen yet. However if the markets put a lower high or marginal new high around the 875.00 area on the SP and 8200 on the Dow, those may be great levels to get short. The other probable scenario is that the markets have already topped and that the consolidation that we have seen during the last two sessions where the markets have started the day with extreme pressure, then rally and then trade lower are the first signals that the upside move have been exhausted. I assume that for the markets to start and trade down we need to see a wide range negative session on the Nasdaq and some follow through during the next session, and today, with the FOMC Rate decision to get released, the markets could just trade at a new marginal high, after a spike, or initiate the downward move no matter the end of month bullish bias.
While I still favor a multi day wide sell off, trading sessions where we have an FOMC rate decision, tend to be tricky, and many times, the real trend is seen during the following day, so, with the difficult to predict what can happen during today’s trading session, be aware that the struggling upside move should be able to continue for the rest of the week even if we have one negative session, but a close below 831.00 could be the first indication that the markets will start to fall.
The early part of the session will be influenced by the economic data, if those are not worst than expected we should see some short covering in front of the interest rate decision. Once the first 2 hours of trading finish, the market should enter in a "Mexican Siesta or midday sleep" period where nothing happens and everybody takes a couple of hours or goes for and early lunch. Then 15-20 minutes before the announcement, the early move should get reversed as traders start to lighten positions. When the FOMC decision comes out, we should see three different moves during the next 40 minutes, an initial impulsive move that fails, a reversal of that move and the final trend move which is the one that we traders try to follow. Only if you have big bucks and wide stops get involved, and take into account that if you are lucky and you go in the right direction, you could have a quick nice profit. Anyway, stops must be wider than in a regular trading session.
For the early going, if the SP opens below 850.00 but get reversed after the first 40 minutes of the session, expect some short covering that could push the index up to yesterday’s highs.
TODAY’S SESSION
There is good resistance at 855.00-856.50 on the SP, 1368.00-1370.00 on the Nasdaq and 473.20-474.10 on the Russell, if the markets fail there, look for some profit taking before the FOMC announcement gets released, but if they trade above them, the next resistance levels at yesterday’s highs, 861.00-863.00 on the SP, 1383.50-1385.00 on the Nasdaq and 475.40-476.20 on the Russell may get tested. If those can not hold, look for the markets to push higher reaching 865.00-867.50 on the SP, 1382.25-1384.00 on the Nasdaq and 480.30-481.60 on the Russell. Trading above them will clear the way for a test of the 875.00 area on the SP.
Initial support is at 846.50-845.50 on the SP, 1355.00-1354.00 on the Nasdaq and 467.70-466.90 on the Russell. Trading below could push the indexes to a test of yesterday’s Globex lows at 839.00-838.00 on the SP, 1349.50-1348.00 on the Nasdaq and 463.80-461.50 on the Russell. A successful test of those areas, could give way to a strong short covering rally, but if the markets fail there, then a visit to 833.00-832.00 on the SP, 1342.00-1340.00 on the Nasdaq and 457.80-456.10 on the Russell may be seen before some bulls jump in. GOOD LUCK
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 873.00-875.00 1389.50-1391.00 483.40-486.10
Resistance 3 865.00-867.50 1382.25-1384.00 480.30-481.60
Resistance 2 861.00-862.00 1375.00-1377.00 477.90-478.60
Resistance 1 855.00-856.50 1368.00-1370.00 473.20-474.10
PIVOT 850.50 1363.00 470.50
Support 1 846.50-845.50 1355.00-1354.00 467.70-466.90
Support 2 839.00-838.00 1349.50-1348.00 463.80-461.50
Support 3 833.00-831.00 1342.00-1340.00 457.80-456.10
Support 4 827.00-825.00 1336.00-1334.00 453.30-454.20
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
959.25 1490.13 551.5
921.71 1446.88 523.6
898.71 1420.38 506.5
884.50 1404.00 495.9
875.71 1393.88 489.4
861.50 1377.50 478.8
852.71 1367.38 472.3
850.00 1364.25 470.3
847.29 1361.12 468.2
838.50 1351.00 461.7
824.29 1334.62 451.1
815.50 1324.50 444.6
801.29 1308.12 434.0
778.29 1281.62 416.9
740.75 1238.38 389.0
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 856.50 1369.00 483.40
AS DAILY LOW 833.50 1342.50 466.30
S&P NASDAQ RUSSELL
Resistance 4 873.00-875.00 1389.50-1391.00 483.40-486.10
Resistance 3 865.00-867.50 1382.25-1384.00 480.30-481.60
Resistance 2 861.00-862.00 1375.00-1377.00 477.90-478.60
Resistance 1 855.00-856.50 1368.00-1370.00 473.20-474.10
PIVOT 850.50 1363.00 470.50
Support 1 846.50-845.50 1355.00-1354.00 467.70-466.90
Support 2 839.00-838.00 1349.50-1348.00 463.80-461.50
Support 3 833.00-831.00 1342.00-1340.00 457.80-456.10
Support 4 827.00-825.00 1336.00-1334.00 453.30-454.20
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
959.25 1490.13 551.5
921.71 1446.88 523.6
898.71 1420.38 506.5
884.50 1404.00 495.9
875.71 1393.88 489.4
861.50 1377.50 478.8
852.71 1367.38 472.3
850.00 1364.25 470.3
847.29 1361.12 468.2
838.50 1351.00 461.7
824.29 1334.62 451.1
815.50 1324.50 444.6
801.29 1308.12 434.0
778.29 1281.62 416.9
740.75 1238.38 389.0
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 856.50 1369.00 483.40
AS DAILY LOW 833.50 1342.50 466.30
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