DAILY TRADING ADVISORY 08-January-2008
Alcoa to cut 13% of work force, Intel revenues down by 23%on the fourth quarter and ADP employment down by 693K, result in a strong negative session. Economy faces $1.2 trillion deficit during this year not counting the stimulus package or any other government bailouts.
ECONOMIC DATA
8:30 AM Initial Claims
2:00 PM Consumer Credit
YESTERDAY’S MARKET
Markets sold off during the Globex session as earnings outlook and private sector job losses kept the futures market under pressure during the night. After making a low at 913.25 during the Globex session, the E-mini SP started the day at 917.00, pulled back to 915.50 and bounced to 918.25 from where it pushed down for a test of the lows. After posting a higher low, the SP rallied to 920.00 but failed to break higher falling to new lows at 911.25, just at our support level. After trying to form a bottom, the SP posted a new low at 910.25 and bounced up to 913.75. Once more the rally attempt failed and the SP pushed down to a new low at 909.50. As the selling pressure lost some of its pace, the SP rebounded to 915.00 and after trading in a narrow range for a while finally a short covering move pushed prices up to 918.00 where the move lost its momentum. The SP pulled back to 912.25 and once more traded in a narrow range before moving lower to 910.50. As volumes quite down a bit, the E-mini SP bounced back to 914.00 where sellers stepped in pushing the index to new lows reaching 903.50. The SP bounced to 905.50 and traded quietly before making a new marginal low at 903.00, which once more appeared to be the daily low. Another feeble bounce resulted in another marginal low as the slow downward trend continued, this time the SP reached 902.25, and a few minutes later 898.75. The SP bounced to 905.50, pushed down to a higher low and bounced into the end of the session. For the day, the SP ended lower by 25.75 points and settled at 905.25, the Nasdaq lost31.50 points ending the session at 1239.50 and the Russell ended lower 12.60 points at 496.90. The Dow lost 245 points closing at 8769.
MARKET COMMENTARY AND OUTLOOK
Last week I wrote:” 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 levels or lower.”
Last Tuesday’s spike above the 940.00 area has printed a short term high, which probably will be tested once more during next week. Yesterday’s weak session, where the indexes opened with a gap and never looked back, shows once more a clear rejection from the 920.00-940.00 areas in the SP and the 9000 level in the Dow Jones. These levels has acted as strong resistance for a few months, and if those markets do not trade back above them during the next few days, then the way is open for another test of the lower boundaries and support of the recent daily ranges, 850.00 on the SP and 8350 on the Dow. On the other side of the coin, yesterday’s lows, if they hold on a close, could place the markets in a strong position and give a chance for this bear market to continue at least to the 960.00 level on the SP, but ,meanwhile the door is open for this correction to continue and once it gets done, the next rally will end the countertrend move around the 960.00 area or with a lower high.
Remember that tomorrow will get the all important unemployment numbers, besides that, it seems that corporate earnings will be full of not so good surprises, so there is not a reason for the markets to rally before there is not more evidence of the state of the jobs situation, or before some of the earnings show something that result in a catalyst for another attempt to move higher.
For today’s trading session, I don’t expect the same strong selling pressure as yesterday, after a trend session, normally we see some consolidation of the move, and the markets have already retraced a 50% from the last rally, but I do expect the indexes to fail on the rally attempts. So staying in the short side of the markets should be the way to go.
TODAY’S SESSION
There is resistance at 908.50-910.00 on the SP, 1245.00-1247.50 on the Nasdaq and 498.90-501.00 on the Russell. Nothing good happens all the time that the markets keep trading below those levels, if they get exceeded look for additional resistance at 914.00-916.00 on the SP, 1252.00-1254.00 on the Nasdaq and 503.50-504.20 on the Russell. Those were the last important highs during yesterday’s trading session, so a double top up there could be a good selling opportunity, however, if the indexes break higher, look for a test of 919.50-921.00 on the SP, 1264.00-1266.00 on the Nasdaq and 508.00-509.20 on the Russell.
There is support at 901.50-899.50 on the SP, 1235.00-1234.00 on the NQ and 494.90-493.80 on the Russell, if those can not hold, look for an early test of 896.00-895.00 on the SP, 1230.00-1228.50 on the Nasdaq and 491.20-490.80 on the Russell. If the early pressure ends there, look for a 12.00-14.00 point rally on the SP, but if the profit taking move continues, the indexes should be able to reach 892.00-891.00 on the SP, 1220.00-1218.00 on the Nasdaq and 486.90-485.50 on the Russell. Breaking below them will point to the strong support area around 885.00 on the SP. 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
Alcoa to cut 13% of work force, Intel revenues down by 23%on the fourth quarter and ADP employment down by 693K, result in a strong negative session. Economy faces $1.2 trillion deficit during this year not counting the stimulus package or any other government bailouts.
ECONOMIC DATA
8:30 AM Initial Claims
2:00 PM Consumer Credit
YESTERDAY’S MARKET
Markets sold off during the Globex session as earnings outlook and private sector job losses kept the futures market under pressure during the night. After making a low at 913.25 during the Globex session, the E-mini SP started the day at 917.00, pulled back to 915.50 and bounced to 918.25 from where it pushed down for a test of the lows. After posting a higher low, the SP rallied to 920.00 but failed to break higher falling to new lows at 911.25, just at our support level. After trying to form a bottom, the SP posted a new low at 910.25 and bounced up to 913.75. Once more the rally attempt failed and the SP pushed down to a new low at 909.50. As the selling pressure lost some of its pace, the SP rebounded to 915.00 and after trading in a narrow range for a while finally a short covering move pushed prices up to 918.00 where the move lost its momentum. The SP pulled back to 912.25 and once more traded in a narrow range before moving lower to 910.50. As volumes quite down a bit, the E-mini SP bounced back to 914.00 where sellers stepped in pushing the index to new lows reaching 903.50. The SP bounced to 905.50 and traded quietly before making a new marginal low at 903.00, which once more appeared to be the daily low. Another feeble bounce resulted in another marginal low as the slow downward trend continued, this time the SP reached 902.25, and a few minutes later 898.75. The SP bounced to 905.50, pushed down to a higher low and bounced into the end of the session. For the day, the SP ended lower by 25.75 points and settled at 905.25, the Nasdaq lost31.50 points ending the session at 1239.50 and the Russell ended lower 12.60 points at 496.90. The Dow lost 245 points closing at 8769.
MARKET COMMENTARY AND OUTLOOK
Last week I wrote:” 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 levels or lower.”
Last Tuesday’s spike above the 940.00 area has printed a short term high, which probably will be tested once more during next week. Yesterday’s weak session, where the indexes opened with a gap and never looked back, shows once more a clear rejection from the 920.00-940.00 areas in the SP and the 9000 level in the Dow Jones. These levels has acted as strong resistance for a few months, and if those markets do not trade back above them during the next few days, then the way is open for another test of the lower boundaries and support of the recent daily ranges, 850.00 on the SP and 8350 on the Dow. On the other side of the coin, yesterday’s lows, if they hold on a close, could place the markets in a strong position and give a chance for this bear market to continue at least to the 960.00 level on the SP, but ,meanwhile the door is open for this correction to continue and once it gets done, the next rally will end the countertrend move around the 960.00 area or with a lower high.
Remember that tomorrow will get the all important unemployment numbers, besides that, it seems that corporate earnings will be full of not so good surprises, so there is not a reason for the markets to rally before there is not more evidence of the state of the jobs situation, or before some of the earnings show something that result in a catalyst for another attempt to move higher.
For today’s trading session, I don’t expect the same strong selling pressure as yesterday, after a trend session, normally we see some consolidation of the move, and the markets have already retraced a 50% from the last rally, but I do expect the indexes to fail on the rally attempts. So staying in the short side of the markets should be the way to go.
TODAY’S SESSION
There is resistance at 908.50-910.00 on the SP, 1245.00-1247.50 on the Nasdaq and 498.90-501.00 on the Russell. Nothing good happens all the time that the markets keep trading below those levels, if they get exceeded look for additional resistance at 914.00-916.00 on the SP, 1252.00-1254.00 on the Nasdaq and 503.50-504.20 on the Russell. Those were the last important highs during yesterday’s trading session, so a double top up there could be a good selling opportunity, however, if the indexes break higher, look for a test of 919.50-921.00 on the SP, 1264.00-1266.00 on the Nasdaq and 508.00-509.20 on the Russell.
There is support at 901.50-899.50 on the SP, 1235.00-1234.00 on the NQ and 494.90-493.80 on the Russell, if those can not hold, look for an early test of 896.00-895.00 on the SP, 1230.00-1228.50 on the Nasdaq and 491.20-490.80 on the Russell. If the early pressure ends there, look for a 12.00-14.00 point rally on the SP, but if the profit taking move continues, the indexes should be able to reach 892.00-891.00 on the SP, 1220.00-1218.00 on the Nasdaq and 486.90-485.50 on the Russell. Breaking below them will point to the strong support area around 885.00 on the SP. GOOD LUCK.
.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 924.50-925.00 1273.00-1275.00 513.70-515.10
Resistance 3 919.50-921.00 1264.00-1266.00 508.00-509.20
Resistance 2 914.00-916.00 1252.00-1254.00 503.50-504.20
Resistance 1 908.50-910.00 1245.00-1247.50 498.90-501.00
PIVOT 912.00 1246.75 499.20
Support 1 901.50-899.50 1235.00-1234.00 494.90-493.80
Support 2 896.00-895.00 1230.00-1228.50 491.20-490.80
Support 3 892.00-891.00 1220.00-1218.00 486.90-485.50
Support 4 886.50-885.00 1212.00-1210.00 481.60-480.10
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
1003.47 1347.27 547.58
994.03 1336.48 542.32
978.75 1319.00 533.80
963.47 1301.52 525.28
954.03 1290.73 520.02
938.75 1273.25 511.50
923.47 1255.77 502.98
918.75 1250.38 500.35
914.03 1244.98 497.72
898.75 1227.50 489.20
883.47 1210.02 480.68
874.03 1199.23 475.42
858.75 1181.75 466.90
843.47 1164.27 458.38
834.03 1153.48 453.12
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 918.50 1256.00 504.20
AS DAILY LOW 885.50 1210.00 481.90
S&P NASDAQ RUSSELL
Resistance 4 924.50-925.00 1273.00-1275.00 513.70-515.10
Resistance 3 919.50-921.00 1264.00-1266.00 508.00-509.20
Resistance 2 914.00-916.00 1252.00-1254.00 503.50-504.20
Resistance 1 908.50-910.00 1245.00-1247.50 498.90-501.00
PIVOT 912.00 1246.75 499.20
Support 1 901.50-899.50 1235.00-1234.00 494.90-493.80
Support 2 896.00-895.00 1230.00-1228.50 491.20-490.80
Support 3 892.00-891.00 1220.00-1218.00 486.90-485.50
Support 4 886.50-885.00 1212.00-1210.00 481.60-480.10
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
1003.47 1347.27 547.58
994.03 1336.48 542.32
978.75 1319.00 533.80
963.47 1301.52 525.28
954.03 1290.73 520.02
938.75 1273.25 511.50
923.47 1255.77 502.98
918.75 1250.38 500.35
914.03 1244.98 497.72
898.75 1227.50 489.20
883.47 1210.02 480.68
874.03 1199.23 475.42
858.75 1181.75 466.90
843.47 1164.27 458.38
834.03 1153.48 453.12
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 918.50 1256.00 504.20
AS DAILY LOW 885.50 1210.00 481.90
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