DAILY TRADING ADVISORY 05-December-2008
Initial Claims lower than expected, Factory Orders minus 5.10%, a global rate cut and automakers once more at the Congress result in a quite session in front of the monthly unemployment data.
ECONOMIC DATA
8:30 AM Average Workweek
8:30 AM Hourly Earnings
8:30 AM Nonfarm Payrolls
8:30 AM Unemployment Rate
3:00 PM Consumer Credit
YESTERDAY’S MARKET
A volatile nightly session where the E-mini SP tested levels above the 874.00 and sold off later, the index started the session at 854.00 posting the early low. Buyers stepped in and guided by the strength on the Nasdaq the SP rallied all the way to 872.50 from where it pulled back strongly to our updated 861.50 support level. As buyers continued to buy the breaks, the index pushed up once more reaching 869.50, backed off to 864.50 and rallied to new highs at 875.50. The SP pulled back once more holding at 866.00 and moved up posting a lower high. The index sold off all the way to 863.50 and bounced back to 870.00. The sideways pattern continued to be in play as the index pulled back once more to a new marginal low at 858.50 from where it bounced once more to 866.00.Once more sellers stepped in pushing the markets to new intraday lows at 855.50 from where it bounced strong reaching almost our updated 870.50 resistance area just to collapse during the last hour of the session breaking all the support levels and testing the KEY short term support at 832.00 from where it bounced into the close. For the day, the SP lost 21.00 points and settled at 847.50, the Nasdaq ended the session at 1135.00 losing 21.00 points for the session and the Russell lost 11.60 points ending the day at 441.50. The Dow ended lower by 215 at 8376.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” Yesterday’s lower opening and mid-day sell off, held perfectly above our 833.00-831.00 levels resulting in huge intraday rallies as the markets try to come back after Monday’s huge sell off. This triangle pattern continues to be valid and probably won’t get broken until tomorrow after the unemployment figures get released. There is not too much to add to yesterday’s report, however, yesterday was the second session where a lower opening and huge volatile swings markets post a positive close. I am afraid that yesterday’s rally could have already exhausted the countertrend rally, and today, another weak opening won’t be able to find strong support. Yesterday’s late highs can be the top of this move as a countertrend move that shows weakness after two sessions have the tendency to get reversed, so don’t get so optimistic about further advance until yesterday’s highs get exceeded. Selling the rallies all the time that those highs remain intact is the best way to go. Keep in mind that the markets are sending mixed signals, low volumes, a seasonal slightly bullish bias and huge selling pressure where every advance get sold. So if the market can hold until Friday’s close, we could see higher prices, but if today’s trading session result in another wild sell off that does not get reversed tomorrows morning, then this rally attempt will be over.”
We came into yesterday’s session looking for the recent highs to get sold if they would not get exceeded with strength. As yesterday’s highs were only marginal breaks of Wednesday’s highs, sellers stepped in, and despite the early support that the markets showed, the weakness in the Nasdaq finally resulted in a steep fall. The reaction to the lows, just as the previous session, proved to be pivotal, so nothing bad will happen until those lows around the 830.00 keep holding. However, the indexes are still trapped in a trading range, a wide one, which has formed a triangle pattern that will have to get resolved during the next sessions with a huge breakout.
The unemployment data will get released today before the opening, everybody knows that the numbers will be terrible; some trades consider that this data has been already discounted by the markets; other will justify a strong sell off based on these numbers, no matter how the markets react to the data, the initial move should get reversed. So if we sell off once the numbers get released and the SP trades below the 830.00’s testing the lower boundary of the triangle pattern around 820.00 and holds, look for a strong reaction rally, but for the rest of the session take into account that a close below the 850.00-860.00 band on the SP could have bearish implications for the upcoming sessions.
TODAY’S SESSION
Initial resistance is at 853.00-855.00 on the SP, 1140.50-1142.00 on the Nasdaq and 444.50-445.60 on the Russell. If those get exceeded look for additional short covering that pushes the indexes to their pivotal levels at 859.50-861.50 on the SP, 1148.00-1151.00 on the Nasdaq and 450.50-452.00 on the Russell. Trading above those levels could initiate a multi day rally that carries the markets up for the next week, in particular if the next resistance levels at 865.00-866.00 on the SP, 1155.00-1156.00 on the Nasdaq and 455.10-456.20 on the Russell get beaten.
There is support at 843.00-841.50 on the SP, 1129.50-1128.00 on the Nasdaq and 438.40-437.50on the Russell, an initial reaction to the job report that pushes below those levels, could easily reach 838.50-836.50 on the SP, 1121.00-1119.00 on the Nasdaq and 434.60-433.60 on the Russell. If those can not hold the selling pressure look for the indexes to test yesterday’s lows at 832.00-831.00 on the SP, 1110.00-1108.00 on the Nasdaq and 430.50-429.80 on the Russell. Trading below them could press the markets much lower, but once the indexes get reversed above them, a good short covering rally that carries the SP back above the 850.00 area could be seen. 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
FOR THE REAL TIME REPORT VISIT OUR WEBSITE
Initial Claims lower than expected, Factory Orders minus 5.10%, a global rate cut and automakers once more at the Congress result in a quite session in front of the monthly unemployment data.
ECONOMIC DATA
8:30 AM Average Workweek
8:30 AM Hourly Earnings
8:30 AM Nonfarm Payrolls
8:30 AM Unemployment Rate
3:00 PM Consumer Credit
YESTERDAY’S MARKET
A volatile nightly session where the E-mini SP tested levels above the 874.00 and sold off later, the index started the session at 854.00 posting the early low. Buyers stepped in and guided by the strength on the Nasdaq the SP rallied all the way to 872.50 from where it pulled back strongly to our updated 861.50 support level. As buyers continued to buy the breaks, the index pushed up once more reaching 869.50, backed off to 864.50 and rallied to new highs at 875.50. The SP pulled back once more holding at 866.00 and moved up posting a lower high. The index sold off all the way to 863.50 and bounced back to 870.00. The sideways pattern continued to be in play as the index pulled back once more to a new marginal low at 858.50 from where it bounced once more to 866.00.Once more sellers stepped in pushing the markets to new intraday lows at 855.50 from where it bounced strong reaching almost our updated 870.50 resistance area just to collapse during the last hour of the session breaking all the support levels and testing the KEY short term support at 832.00 from where it bounced into the close. For the day, the SP lost 21.00 points and settled at 847.50, the Nasdaq ended the session at 1135.00 losing 21.00 points for the session and the Russell lost 11.60 points ending the day at 441.50. The Dow ended lower by 215 at 8376.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” Yesterday’s lower opening and mid-day sell off, held perfectly above our 833.00-831.00 levels resulting in huge intraday rallies as the markets try to come back after Monday’s huge sell off. This triangle pattern continues to be valid and probably won’t get broken until tomorrow after the unemployment figures get released. There is not too much to add to yesterday’s report, however, yesterday was the second session where a lower opening and huge volatile swings markets post a positive close. I am afraid that yesterday’s rally could have already exhausted the countertrend rally, and today, another weak opening won’t be able to find strong support. Yesterday’s late highs can be the top of this move as a countertrend move that shows weakness after two sessions have the tendency to get reversed, so don’t get so optimistic about further advance until yesterday’s highs get exceeded. Selling the rallies all the time that those highs remain intact is the best way to go. Keep in mind that the markets are sending mixed signals, low volumes, a seasonal slightly bullish bias and huge selling pressure where every advance get sold. So if the market can hold until Friday’s close, we could see higher prices, but if today’s trading session result in another wild sell off that does not get reversed tomorrows morning, then this rally attempt will be over.”
We came into yesterday’s session looking for the recent highs to get sold if they would not get exceeded with strength. As yesterday’s highs were only marginal breaks of Wednesday’s highs, sellers stepped in, and despite the early support that the markets showed, the weakness in the Nasdaq finally resulted in a steep fall. The reaction to the lows, just as the previous session, proved to be pivotal, so nothing bad will happen until those lows around the 830.00 keep holding. However, the indexes are still trapped in a trading range, a wide one, which has formed a triangle pattern that will have to get resolved during the next sessions with a huge breakout.
The unemployment data will get released today before the opening, everybody knows that the numbers will be terrible; some trades consider that this data has been already discounted by the markets; other will justify a strong sell off based on these numbers, no matter how the markets react to the data, the initial move should get reversed. So if we sell off once the numbers get released and the SP trades below the 830.00’s testing the lower boundary of the triangle pattern around 820.00 and holds, look for a strong reaction rally, but for the rest of the session take into account that a close below the 850.00-860.00 band on the SP could have bearish implications for the upcoming sessions.
TODAY’S SESSION
Initial resistance is at 853.00-855.00 on the SP, 1140.50-1142.00 on the Nasdaq and 444.50-445.60 on the Russell. If those get exceeded look for additional short covering that pushes the indexes to their pivotal levels at 859.50-861.50 on the SP, 1148.00-1151.00 on the Nasdaq and 450.50-452.00 on the Russell. Trading above those levels could initiate a multi day rally that carries the markets up for the next week, in particular if the next resistance levels at 865.00-866.00 on the SP, 1155.00-1156.00 on the Nasdaq and 455.10-456.20 on the Russell get beaten.
There is support at 843.00-841.50 on the SP, 1129.50-1128.00 on the Nasdaq and 438.40-437.50on the Russell, an initial reaction to the job report that pushes below those levels, could easily reach 838.50-836.50 on the SP, 1121.00-1119.00 on the Nasdaq and 434.60-433.60 on the Russell. If those can not hold the selling pressure look for the indexes to test yesterday’s lows at 832.00-831.00 on the SP, 1110.00-1108.00 on the Nasdaq and 430.50-429.80 on the Russell. Trading below them could press the markets much lower, but once the indexes get reversed above them, a good short covering rally that carries the SP back above the 850.00 area could be seen. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 871.50-873.00 1166.00-1168.00 459.80-461.00
Resistance 3 865.00-866.00 1155.00-1156.00 455.10-456.20
Resistance 2 859.50-861.50 1148.00-1151.00 450.40-452.00
Resistance 1 853.00-855.00 1140.50-1142.00 444.50-445.60
PIVOT 851.50 1137.50 445.00
Support 1 843.00-841.50 1129.50-1128.00 438.40-437.50
Support 2 838.00-836.50 1121.00-1119.00 434.60-433.60
Support 3 832.00-831.00 1110.00-1108.00 430.50-429.80
Support 4 823.00-820.75 1102.00-1100.00 424.40-423.70
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
945.88 1266.08 515.32
935.62 1251.92 507.68
919.00 1229.00 495.30
902.38 1206.08 482.92
892.12 1191.92 475.28
875.50 1169.00 462.90
858.88 1146.08 450.52
853.75 1139.00 446.70
848.62 1131.92 442.88
832.00 1109.00 430.50
815.38 1086.08 418.12
805.12 1071.92 410.48
788.50 1049.00 398.10
771.88 1026.08 385.72
761.62 1011.92 378.08
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 861.50 1152.00 452.20
AS DAILY LOW 818.00 1092.00 419.80
S&P NASDAQ RUSSELL
Resistance 4 871.50-873.00 1166.00-1168.00 459.80-461.00
Resistance 3 865.00-866.00 1155.00-1156.00 455.10-456.20
Resistance 2 859.50-861.50 1148.00-1151.00 450.40-452.00
Resistance 1 853.00-855.00 1140.50-1142.00 444.50-445.60
PIVOT 851.50 1137.50 445.00
Support 1 843.00-841.50 1129.50-1128.00 438.40-437.50
Support 2 838.00-836.50 1121.00-1119.00 434.60-433.60
Support 3 832.00-831.00 1110.00-1108.00 430.50-429.80
Support 4 823.00-820.75 1102.00-1100.00 424.40-423.70
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
945.88 1266.08 515.32
935.62 1251.92 507.68
919.00 1229.00 495.30
902.38 1206.08 482.92
892.12 1191.92 475.28
875.50 1169.00 462.90
858.88 1146.08 450.52
853.75 1139.00 446.70
848.62 1131.92 442.88
832.00 1109.00 430.50
815.38 1086.08 418.12
805.12 1071.92 410.48
788.50 1049.00 398.10
771.88 1026.08 385.72
761.62 1011.92 378.08
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 861.50 1152.00 452.20
AS DAILY LOW 818.00 1092.00 419.80
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
