DAILY TRADING ADVISORY 12-December-2008
Initial claims much higher than expected, continuing claim rising, import prices down by 6.2%, Procter and gamble lowering its outlook and the automakers bailout plan ready to be approved by Senate result in a strong negative session for the U.S. markets. Oil spikes as dollar sinks. AFTER HOURS: Bailout plan collapses at Senate resulting in a strong sell off during the Globex session.
ECONOMIC DATA
8:30 AM Core PPI
8:30 AM PPI
8:30 AM Retail Sales
8:30 AM Retail Sales ex. Auto
10:00 AM Business Inventories
10:00 AM Michigan Sentiment- Preliminar
YESTERDAY’S MARKET
The SP opened the session just below the 890.00 area from where guided by the Nasdaq pushed lower without braking below the Globex lows. As the market held, the SP rallied all the way back to 896.25 pulled back to 893.00 and continued higher reaching our 902.75 resistance area ( that level has acted as a good directional indicator during the last two sessions). As the Russell failed to confirm the move, the SP pulled all the way to 895.75 from where it bounced once more to 901.75 just to pull back to the intraday support area at 894.00 from where it bounced once more maintaining a narrow trading range. The SP was able to reach the 904.50 level from where it pulled back to 896.25 just to bounce one more narrowing the trading ranges while forming a triangle pattern on the intraday charts that finally tried to break higher but the lack of momentum kept the markets between their intraday ranges. After posting a lower high, the SP pulled back once more, this time to 893.50 from where it bounced to 898.00 just to get sold pushing down to 891.75, after a feeble bounce the indexes finally gain downside momentum as the SP fell to below the 879.50 filling the pending gap and making a low at our last support level at 870.75. The SP then bounced to 876.00 just to get sold once again reaching its daily low at 867.50 before bouncing back in to the end. For the day, the SP lost 20.75 points and settled at 874.50, the Nasdaq ended lower by 29.00 points at 1190.00 and the Russell finished the day at 449.40, minus 24.20 points. The Dow lost 196 points ending the session at 8565
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” The fact that the SP has not been able to close above the 908.50 area and has not reached 879.50 to close the open gap left from Monday’s higher opening, still have the indexes in a consolidation pattern of the last rally. The early attempts to move higher, that mostly have been leaded by the strength on the Nasdaq have resulted in failure to continue and close above the indicated level, however, the markets have continued to show strong support at the current lows and the selling has been limited to intraday attempts to close the open gap. This should be seen as a positive sign; also, the Nasdaq has been able to hold above the 1202.00-1198.00 support levels. This range bounded trading action holding above the last week highs could indicate that the trend remains in a strong position. BUT, there is a gap to be closed, the Nasdaq and Russell has been reversed from theirs early advances, and the Dow was clearly reversed from the 9000 after testing that level during Monday’s trading session, this keeps open the possibility of a wide range down session if the last two days lows fail to hold, and that can happen during today’s trading session and continue also tomorrow as the main weekly economic reports get released. So we have to follow what the markets do, and that means to follow a possible trend move that could happen today, the areas to watch are the 889.50 level on the SP, if that markets starts to trade below that level, the shorts could gain control and finally succeed to push markets lower, a great confirmation of the move will be the Nasdaq below the 1200 area and the Dow below the 8630 level, that could result in a sell off that carries the SP at least to the low 70’s. On the other side of the coin, if the SP gets above 898.75 and confirm the move trading above our 902.75 short term pivot, the way will be open for another test of the recent highs. In conclusion, until the current ranges get broken, despite our slightly bearish bias as a consequence of the open gap, look for this range to continue and hold, selling the rallies when they get exhausted and buying near the current lows. It is very important that if the SP won’t be able to close the gap, the indexes should be considered in a strong position and ready for a move to our anticipated 940.00-960.00 areas on the SP which could result in a huge selling opportunity. There is some support at 893.00-891.50 on the SP, 1213.00-1211.00 on the Nasdaq and 472.00-471.00 on the Russell. If the markets are OK, they should hold near to those areas and bounce, however, if those can not hold, at least a test of the last two days lows at 887.00-886.00 on the SP, 1206.00-1204.00 on the Nasdaq and 469.80-468.70 on the Russell could be seen. That will be the third test of those areas, if they can not hold, and then the only levels to avoid a strong sell off would be 880.50-879.50 on the SP, 1196.00-1194.00 on the Nasdaq and 464.70-464.20 on the Russell. “
Yesterday failure to hold the 898.50 areas on the SP and 1200.00 on the Nasdaq finally resulted in a strong downside move that not only filled the gap, it also traded much lower. Market condition have deteriorated as fast as the last rally happened, and today’s economic reports to get released before and after the markets opens surely will add volatility to the trading session.
The nightly sell off, after the bailout plan was rejected at the Senate, may be overdone, but the pressure from the expected gloomy economic reports may drive the SP near or below the nightly lows, at the moment that I am writing my report, the low in the SP is at 828.75. If that index moves below that level and reach last Friday’s low at 817.00 posting a double bottom, this could be a good buying opportunity. Obviously wild swing that make difficult to trade with tight stops may be part of the scene.
Despite this, with so much pressure into the markets, on a Friday, selling the rallies will be the way to go, and remember, if we end lower tonight, probably Monday will be also a negative session, many bear trends show this peculiarity, a bad Friday followed by a bad Monday.
Al this negative sentiment may be able to bring the SP near or just below the 800.00 area where I expect the market to hold, and start to move higher as shorts start to cover their positions in front of next week FOMC committee meeting when the Fed could surprise the markets not lowering the rates by half point, maybe then, we’ll have some kind of Santa Claus rally. Yesterday’s reversal from the low 900.00’s clearly indicates the weakness on this last rally, three day s the SP traded above that level and three days failed to close above them. The perfect scenario for this pattern of trading will be a lower low below the 817.00 last Friday’s level, maybe near the 792.00 area and then the resume of the countertrend rally that should last until the end of the month.
We have to take into account that the market conditions are far from normal, and a news guided market its difficult to trade, this bailout “on the pocket” approval, its further collapse, and who knows what else will keep the markets under big uncertainty, so the bear campaign will continue despite wild bear market rallies.
For today’s trading session, try to stick to the short positions, unless something magic happens and the indexes start to trade on positive territory, unfortunately stops may be wider than expected, but I will try to do my best to keep a low risk trading attitude. Sharp nightly moves have the tendency to alter the efficacy of our support and resistance numbers, so try to follow our intraday updates on the real time trading service in order to keep updated.
TODAY’S SESSION
There is resistance at 884.00-885.50 on the SP, 1200.00-1202.00 on the Nasdaq and 451.90-453.10 on the Russell, maybe a crazy event or miracle happens and the indexes come back from the heavy nightly loses, I doubt it, if the SP trade as high as these levels, getting short is the way to go, if those levels get exceeded look for additional resistance at 889.00-890.50 on the SP, 1208.00-1210.00 on the Nasdaq and 455.50-456.00
As I am writing my report, all my support levels have been already crushed, so use them as resistance areas for your trading strategies, additional support levels on the SP area at 830.50-828.00, 823.50-822.00 and 807.00-805.00. 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
Initial claims much higher than expected, continuing claim rising, import prices down by 6.2%, Procter and gamble lowering its outlook and the automakers bailout plan ready to be approved by Senate result in a strong negative session for the U.S. markets. Oil spikes as dollar sinks. AFTER HOURS: Bailout plan collapses at Senate resulting in a strong sell off during the Globex session.
ECONOMIC DATA
8:30 AM Core PPI
8:30 AM PPI
8:30 AM Retail Sales
8:30 AM Retail Sales ex. Auto
10:00 AM Business Inventories
10:00 AM Michigan Sentiment- Preliminar
YESTERDAY’S MARKET
The SP opened the session just below the 890.00 area from where guided by the Nasdaq pushed lower without braking below the Globex lows. As the market held, the SP rallied all the way back to 896.25 pulled back to 893.00 and continued higher reaching our 902.75 resistance area ( that level has acted as a good directional indicator during the last two sessions). As the Russell failed to confirm the move, the SP pulled all the way to 895.75 from where it bounced once more to 901.75 just to pull back to the intraday support area at 894.00 from where it bounced once more maintaining a narrow trading range. The SP was able to reach the 904.50 level from where it pulled back to 896.25 just to bounce one more narrowing the trading ranges while forming a triangle pattern on the intraday charts that finally tried to break higher but the lack of momentum kept the markets between their intraday ranges. After posting a lower high, the SP pulled back once more, this time to 893.50 from where it bounced to 898.00 just to get sold pushing down to 891.75, after a feeble bounce the indexes finally gain downside momentum as the SP fell to below the 879.50 filling the pending gap and making a low at our last support level at 870.75. The SP then bounced to 876.00 just to get sold once again reaching its daily low at 867.50 before bouncing back in to the end. For the day, the SP lost 20.75 points and settled at 874.50, the Nasdaq ended lower by 29.00 points at 1190.00 and the Russell finished the day at 449.40, minus 24.20 points. The Dow lost 196 points ending the session at 8565
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” The fact that the SP has not been able to close above the 908.50 area and has not reached 879.50 to close the open gap left from Monday’s higher opening, still have the indexes in a consolidation pattern of the last rally. The early attempts to move higher, that mostly have been leaded by the strength on the Nasdaq have resulted in failure to continue and close above the indicated level, however, the markets have continued to show strong support at the current lows and the selling has been limited to intraday attempts to close the open gap. This should be seen as a positive sign; also, the Nasdaq has been able to hold above the 1202.00-1198.00 support levels. This range bounded trading action holding above the last week highs could indicate that the trend remains in a strong position. BUT, there is a gap to be closed, the Nasdaq and Russell has been reversed from theirs early advances, and the Dow was clearly reversed from the 9000 after testing that level during Monday’s trading session, this keeps open the possibility of a wide range down session if the last two days lows fail to hold, and that can happen during today’s trading session and continue also tomorrow as the main weekly economic reports get released. So we have to follow what the markets do, and that means to follow a possible trend move that could happen today, the areas to watch are the 889.50 level on the SP, if that markets starts to trade below that level, the shorts could gain control and finally succeed to push markets lower, a great confirmation of the move will be the Nasdaq below the 1200 area and the Dow below the 8630 level, that could result in a sell off that carries the SP at least to the low 70’s. On the other side of the coin, if the SP gets above 898.75 and confirm the move trading above our 902.75 short term pivot, the way will be open for another test of the recent highs. In conclusion, until the current ranges get broken, despite our slightly bearish bias as a consequence of the open gap, look for this range to continue and hold, selling the rallies when they get exhausted and buying near the current lows. It is very important that if the SP won’t be able to close the gap, the indexes should be considered in a strong position and ready for a move to our anticipated 940.00-960.00 areas on the SP which could result in a huge selling opportunity. There is some support at 893.00-891.50 on the SP, 1213.00-1211.00 on the Nasdaq and 472.00-471.00 on the Russell. If the markets are OK, they should hold near to those areas and bounce, however, if those can not hold, at least a test of the last two days lows at 887.00-886.00 on the SP, 1206.00-1204.00 on the Nasdaq and 469.80-468.70 on the Russell could be seen. That will be the third test of those areas, if they can not hold, and then the only levels to avoid a strong sell off would be 880.50-879.50 on the SP, 1196.00-1194.00 on the Nasdaq and 464.70-464.20 on the Russell. “
Yesterday failure to hold the 898.50 areas on the SP and 1200.00 on the Nasdaq finally resulted in a strong downside move that not only filled the gap, it also traded much lower. Market condition have deteriorated as fast as the last rally happened, and today’s economic reports to get released before and after the markets opens surely will add volatility to the trading session.
The nightly sell off, after the bailout plan was rejected at the Senate, may be overdone, but the pressure from the expected gloomy economic reports may drive the SP near or below the nightly lows, at the moment that I am writing my report, the low in the SP is at 828.75. If that index moves below that level and reach last Friday’s low at 817.00 posting a double bottom, this could be a good buying opportunity. Obviously wild swing that make difficult to trade with tight stops may be part of the scene.
Despite this, with so much pressure into the markets, on a Friday, selling the rallies will be the way to go, and remember, if we end lower tonight, probably Monday will be also a negative session, many bear trends show this peculiarity, a bad Friday followed by a bad Monday.
Al this negative sentiment may be able to bring the SP near or just below the 800.00 area where I expect the market to hold, and start to move higher as shorts start to cover their positions in front of next week FOMC committee meeting when the Fed could surprise the markets not lowering the rates by half point, maybe then, we’ll have some kind of Santa Claus rally. Yesterday’s reversal from the low 900.00’s clearly indicates the weakness on this last rally, three day s the SP traded above that level and three days failed to close above them. The perfect scenario for this pattern of trading will be a lower low below the 817.00 last Friday’s level, maybe near the 792.00 area and then the resume of the countertrend rally that should last until the end of the month.
We have to take into account that the market conditions are far from normal, and a news guided market its difficult to trade, this bailout “on the pocket” approval, its further collapse, and who knows what else will keep the markets under big uncertainty, so the bear campaign will continue despite wild bear market rallies.
For today’s trading session, try to stick to the short positions, unless something magic happens and the indexes start to trade on positive territory, unfortunately stops may be wider than expected, but I will try to do my best to keep a low risk trading attitude. Sharp nightly moves have the tendency to alter the efficacy of our support and resistance numbers, so try to follow our intraday updates on the real time trading service in order to keep updated.
TODAY’S SESSION
There is resistance at 884.00-885.50 on the SP, 1200.00-1202.00 on the Nasdaq and 451.90-453.10 on the Russell, maybe a crazy event or miracle happens and the indexes come back from the heavy nightly loses, I doubt it, if the SP trade as high as these levels, getting short is the way to go, if those levels get exceeded look for additional resistance at 889.00-890.50 on the SP, 1208.00-1210.00 on the Nasdaq and 455.50-456.00
As I am writing my report, all my support levels have been already crushed, so use them as resistance areas for your trading strategies, additional support levels on the SP area at 830.50-828.00, 823.50-822.00 and 807.00-805.00. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 901.00-903.50 1228.00-1231.00 466.50-467.80
Resistance 3 897.00-898.00 1220.00-1222.00 459.00-460.20
Resistance 2 889.00-890.50 1208.00-1210.00 455.50-456.00
Resistance 1 884.00-885.50 1200.00-1202.00 451.90-453.10
PIVOT 882.00 1199.50 453.40
Support 1 871.00-870.50 1179.00-1178.00 442.50-441.30
Support 2 864.00-863.00 1167.00-1165.50 437.00-435.60
Support 3 854.00-853.25 1159.00-1158.00 431.40-429.90
Support 4 845.00-843.50 1144.00-1143.00 424,50-423.10
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
964.37 1320.34 537.82
955.63 1307.41 528.68
941.50 1286.50 513.90
927.37 1265.59 499.12
918.63 1252.66 489.98
904.50 1231.75 475.20
890.37 1210.84 460.42
886.00 1204.38 455.85
881.63 1197.91 451.28
867.50 1177.00 436.50
853.37 1156.09 421.72
844.63 1143.16 412.58
830.50 1122.25 397.80
816.37 1101.34 383.02
807.63 1088.41 373.88
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 889.00 1210.00 461.00
AS DAILY LOW 852.00 1156.00 423.10
S&P NASDAQ RUSSELL
Resistance 4 901.00-903.50 1228.00-1231.00 466.50-467.80
Resistance 3 897.00-898.00 1220.00-1222.00 459.00-460.20
Resistance 2 889.00-890.50 1208.00-1210.00 455.50-456.00
Resistance 1 884.00-885.50 1200.00-1202.00 451.90-453.10
PIVOT 882.00 1199.50 453.40
Support 1 871.00-870.50 1179.00-1178.00 442.50-441.30
Support 2 864.00-863.00 1167.00-1165.50 437.00-435.60
Support 3 854.00-853.25 1159.00-1158.00 431.40-429.90
Support 4 845.00-843.50 1144.00-1143.00 424,50-423.10
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
964.37 1320.34 537.82
955.63 1307.41 528.68
941.50 1286.50 513.90
927.37 1265.59 499.12
918.63 1252.66 489.98
904.50 1231.75 475.20
890.37 1210.84 460.42
886.00 1204.38 455.85
881.63 1197.91 451.28
867.50 1177.00 436.50
853.37 1156.09 421.72
844.63 1143.16 412.58
830.50 1122.25 397.80
816.37 1101.34 383.02
807.63 1088.41 373.88
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 889.00 1210.00 461.00
AS DAILY LOW 852.00 1156.00 423.10
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