DAILY TRADING ADVISORY 07-January-2008
Another positive session for the U.S. equity markets with the ISM Services data reporting an increase and the Factory Orders down by 4.6% that continued to show contraction in the manufacturing sector. Pending home sales down by another 4% as the housing sector has not bottoming yet. FED’s concern about the length and severity of the downturn.
ECONOMIC DATA
10:35 AM Crude Inventories
YESTERDAY’S MARKET
After a strong Globex session, the E-mini SP started the day at 934.00 and traded on a narrow range during the first minutes of the session before breaking up to a new high at 941.25. As the economic reports get released, the E-mini SP pop up to 942.75 posting the high for the morning. After posting the high, the SP sold off strongly pushing down all the way to the 926.00 pivot level. The SP bounced back to 932.50 and pulled back to new lows at 924.50, just at our support levels. The SP bounced back to 934.00 from where the erratic condition continued, and as a result another pullback took the index back down to 926.75. The higher low gave way to another upside move, and once the Nasdaq and Russell posted new highs, the SP made its attempt that reached 939.50. The failure to print a new high on the index resulted in another sell off that once more held above the 926.00 level from where the SP bounced a bit into the end of the session. For the day, the SP added 3.00 points closing the session at 930.50, the Nasdaq gained 6.00 points and settled at 1271.00, and the Russell closed at 510.50, up 6.90 points for the session. The Dow finished the day at 9015 with a 62 point advance.
MARKET COMMENTARY AND OUTLOOK
Last week I wrote:” Yesterday’s action resulted in our expected consolidation after last week strong rally, our 934.00-934.50 resistance areas on the SP acted perfect as the markets sold off nicely once those levels got reached. Despite that the markets continue to show a bullish picture holding near the overall highs, double tops on a bear market, have the tendency to reverse the trend, moreover, the Dow has failed during the last months to hold above the 9000 level for two consecutive closes, will this time be different and that market will finally make it? I am not so sure, that index will have to trade above the 9050 level for the uptrend to continue and if that not happens, we could see another visit to the 860.00 area on the SP and the 8400 on the Dow. So on the short term, yesterday’s double top around the 934.00-935.00 areas on the SP and the 9050 level on the Dow will have to get exceeded to confirm further strength, and before that happens we could see more sideways movement until a decisive breakout happens. If this is the case, rallies that fail near those levels could offer good selling opportunities, but beware of staying short if those areas get exceeded. Take into account that the markets look solid and besides the suggested shorting trade around the current highs, all the pullbacks, in particular once that test yesterday’s lows should be bought with tight stops.”
Markets traded sideways for most of the session and even reached new highs on this uptrend that has been struggling to move higher. Yesterday’s early spike, just after the release of bad economic numbers has posted a short term high, that even if it get exceeded by a few points on a false break, does not seem to be able to place a close above it at least during today’s trading session. Yesterday’s opening, with an upside gap, and the early spike that got reversed, is a way of an exhausting move, and after a few session where the markets have shown extreme bullishness, we may be ready for a correction.
Today’s lack of economic reports, we only have the crude oil inventories data, should favor some profit taking move before the markets take some air and get ready for tomorrow’s and Friday’s important economic numbers. I still think that the markets could continue to gain some more upside momentum, and I still think that the 960.00 area on the SP, and the 9300 level on the Dow could be tested, but a negative session which finds support around 911.00 level on the SP could invite some longs that missed last Monday rally. So independent of where the markets close today, I may be selling the rallies without overstaying in my short positions as I do expect at least another test of yesterday’s highs during the coming sessions. This pullback is something that the markets need at this moment, and probably, after next Friday unemployment numbers, the markets will rally in front of January 20 when Barak Obama will become the next President of the United States. If the SP won’t be able to hold above the 900.00 area or from a marginal new intraday high sells off in the coming sessions, then a strong push to the downside that reaches the 864.00-855.00 levels could give way for a strong rally before January 20.
For today’s trading session, unless the 933.00-936.00 levels on the SP get exceeded and hold on a pullback, I will favor the short side selling the bounces for a possible test of the 916.50 level or lower.
TODAY’S SESSION
There is resistance at 932.00-933.00 on the SP, 1276.00-1278.00 on the Nasdaq and 512.10-513.70 on the Russell. If those get exceeded look for another test of 935.00-936.50 on the SP, 1283.00-1285.00 on the Nasdaq and 515.50-516.50 on the Russell. The first and second resistance areas has showed a lot of congestion and seem to be acting well as strong resistance levels, so an early rally that reaches those areas could offer a good shorting opportunity, however, if the markets are strong look for the rally to continue for a test of levels near yesterday’s highs at 940.00-941.25 on the SP, 1292.00-1293.50 on the Nasdaq and 519.80-520.20 on the Russell.
There is early support at 927.00-926.00 on the SP, 1268.00-1267.00 on the NQ and 508.90-507.30 on the Russell; those held nicely during yesterday’s sell off attempts, so if the market opens above them, they may hold, however if the indexes start the session below them, they must act as good resistance levels. Trading below them should push the markets to their next support areas at 922.00-920.50 on the SP, 1263.00-1261.50 on the Nasdaq and 505.70-504.80 on the Russell. Those may hold the first time they get tested, so getting long there with tight stops could result in a good buying opportunity, but if the sell off has more to go and they don’t hold, look for Monday’s lows to get tested, 917.00-916.50 on the SP, 1257.50-1255.50 on the Nasdaq and 501.70-501.00 on the Russell. If those levels do not hold, look for the SP to continue lower for a test of the short term key levels at 913.50-911.00 where many buyers should step 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
Another positive session for the U.S. equity markets with the ISM Services data reporting an increase and the Factory Orders down by 4.6% that continued to show contraction in the manufacturing sector. Pending home sales down by another 4% as the housing sector has not bottoming yet. FED’s concern about the length and severity of the downturn.
ECONOMIC DATA
10:35 AM Crude Inventories
YESTERDAY’S MARKET
After a strong Globex session, the E-mini SP started the day at 934.00 and traded on a narrow range during the first minutes of the session before breaking up to a new high at 941.25. As the economic reports get released, the E-mini SP pop up to 942.75 posting the high for the morning. After posting the high, the SP sold off strongly pushing down all the way to the 926.00 pivot level. The SP bounced back to 932.50 and pulled back to new lows at 924.50, just at our support levels. The SP bounced back to 934.00 from where the erratic condition continued, and as a result another pullback took the index back down to 926.75. The higher low gave way to another upside move, and once the Nasdaq and Russell posted new highs, the SP made its attempt that reached 939.50. The failure to print a new high on the index resulted in another sell off that once more held above the 926.00 level from where the SP bounced a bit into the end of the session. For the day, the SP added 3.00 points closing the session at 930.50, the Nasdaq gained 6.00 points and settled at 1271.00, and the Russell closed at 510.50, up 6.90 points for the session. The Dow finished the day at 9015 with a 62 point advance.
MARKET COMMENTARY AND OUTLOOK
Last week I wrote:” Yesterday’s action resulted in our expected consolidation after last week strong rally, our 934.00-934.50 resistance areas on the SP acted perfect as the markets sold off nicely once those levels got reached. Despite that the markets continue to show a bullish picture holding near the overall highs, double tops on a bear market, have the tendency to reverse the trend, moreover, the Dow has failed during the last months to hold above the 9000 level for two consecutive closes, will this time be different and that market will finally make it? I am not so sure, that index will have to trade above the 9050 level for the uptrend to continue and if that not happens, we could see another visit to the 860.00 area on the SP and the 8400 on the Dow. So on the short term, yesterday’s double top around the 934.00-935.00 areas on the SP and the 9050 level on the Dow will have to get exceeded to confirm further strength, and before that happens we could see more sideways movement until a decisive breakout happens. If this is the case, rallies that fail near those levels could offer good selling opportunities, but beware of staying short if those areas get exceeded. Take into account that the markets look solid and besides the suggested shorting trade around the current highs, all the pullbacks, in particular once that test yesterday’s lows should be bought with tight stops.”
Markets traded sideways for most of the session and even reached new highs on this uptrend that has been struggling to move higher. Yesterday’s early spike, just after the release of bad economic numbers has posted a short term high, that even if it get exceeded by a few points on a false break, does not seem to be able to place a close above it at least during today’s trading session. Yesterday’s opening, with an upside gap, and the early spike that got reversed, is a way of an exhausting move, and after a few session where the markets have shown extreme bullishness, we may be ready for a correction.
Today’s lack of economic reports, we only have the crude oil inventories data, should favor some profit taking move before the markets take some air and get ready for tomorrow’s and Friday’s important economic numbers. I still think that the markets could continue to gain some more upside momentum, and I still think that the 960.00 area on the SP, and the 9300 level on the Dow could be tested, but a negative session which finds support around 911.00 level on the SP could invite some longs that missed last Monday rally. So independent of where the markets close today, I may be selling the rallies without overstaying in my short positions as I do expect at least another test of yesterday’s highs during the coming sessions. This pullback is something that the markets need at this moment, and probably, after next Friday unemployment numbers, the markets will rally in front of January 20 when Barak Obama will become the next President of the United States. If the SP won’t be able to hold above the 900.00 area or from a marginal new intraday high sells off in the coming sessions, then a strong push to the downside that reaches the 864.00-855.00 levels could give way for a strong rally before January 20.
For today’s trading session, unless the 933.00-936.00 levels on the SP get exceeded and hold on a pullback, I will favor the short side selling the bounces for a possible test of the 916.50 level or lower.
TODAY’S SESSION
There is resistance at 932.00-933.00 on the SP, 1276.00-1278.00 on the Nasdaq and 512.10-513.70 on the Russell. If those get exceeded look for another test of 935.00-936.50 on the SP, 1283.00-1285.00 on the Nasdaq and 515.50-516.50 on the Russell. The first and second resistance areas has showed a lot of congestion and seem to be acting well as strong resistance levels, so an early rally that reaches those areas could offer a good shorting opportunity, however, if the markets are strong look for the rally to continue for a test of levels near yesterday’s highs at 940.00-941.25 on the SP, 1292.00-1293.50 on the Nasdaq and 519.80-520.20 on the Russell.
There is early support at 927.00-926.00 on the SP, 1268.00-1267.00 on the NQ and 508.90-507.30 on the Russell; those held nicely during yesterday’s sell off attempts, so if the market opens above them, they may hold, however if the indexes start the session below them, they must act as good resistance levels. Trading below them should push the markets to their next support areas at 922.00-920.50 on the SP, 1263.00-1261.50 on the Nasdaq and 505.70-504.80 on the Russell. Those may hold the first time they get tested, so getting long there with tight stops could result in a good buying opportunity, but if the sell off has more to go and they don’t hold, look for Monday’s lows to get tested, 917.00-916.50 on the SP, 1257.50-1255.50 on the Nasdaq and 501.70-501.00 on the Russell. If those levels do not hold, look for the SP to continue lower for a test of the short term key levels at 913.50-911.00 where many buyers should step in. GOOD LUCK.
.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 945.00-947.00 1298.00-1300.00 523.80-525.40
Resistance 3 940.00-941.25 1292.00-1293.50 519.80-520.20
Resistance 2 935.00-936.50 1283.00-1285.00 515.50-516.50
Resistance 1 932.00-933.00 1276.00-1278.00 512.10-513.70
PIVOT 932.25 1272.50 510.10
Support 1 927.00-926.00 1268.00-1267.00 508.90-507.30
Support 2 922.00-920.50 1263.00-1261.50 505.70-504.80
Support 3 917.00-916.50 1257.50-1255.50 501.70-501.00
Support 4 913.00-911.50 1245.00-1243.00 495.70-495.10
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
973.90 1331.50 546.59
969.35 1325.01 542.51
962.00 1314.50 535.90
954.65 1304.00 529.29
950.10 1297.51 525.21
942.75 1287.00 518.60
935.40 1276.50 511.99
933.13 1273.25 509.95
930.85 1270.01 507.91
923.50 1259.50 501.30
916.15 1249.00 494.69
911.60 1242.51 490.61
904.25 1232.00 484.00
896.90 1221.50 477.39
892.35 1215.01 473.31
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 946.25 1292.75 523.20
AS DAILY LOW 927.00 1265.25 505.90
S&P NASDAQ RUSSELL
Resistance 4 945.00-947.00 1298.00-1300.00 523.80-525.40
Resistance 3 940.00-941.25 1292.00-1293.50 519.80-520.20
Resistance 2 935.00-936.50 1283.00-1285.00 515.50-516.50
Resistance 1 932.00-933.00 1276.00-1278.00 512.10-513.70
PIVOT 932.25 1272.50 510.10
Support 1 927.00-926.00 1268.00-1267.00 508.90-507.30
Support 2 922.00-920.50 1263.00-1261.50 505.70-504.80
Support 3 917.00-916.50 1257.50-1255.50 501.70-501.00
Support 4 913.00-911.50 1245.00-1243.00 495.70-495.10
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
973.90 1331.50 546.59
969.35 1325.01 542.51
962.00 1314.50 535.90
954.65 1304.00 529.29
950.10 1297.51 525.21
942.75 1287.00 518.60
935.40 1276.50 511.99
933.13 1273.25 509.95
930.85 1270.01 507.91
923.50 1259.50 501.30
916.15 1249.00 494.69
911.60 1242.51 490.61
904.25 1232.00 484.00
896.90 1221.50 477.39
892.35 1215.01 473.31
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 946.25 1292.75 523.20
AS DAILY LOW 927.00 1265.25 505.90
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