TRADING ADVISORY 15-January-2008
Deutsche Bank $6.3 billion loss. Worries about Citi after it gave control of its brokerage to Morgan Stanley which predicted it will have to raise as much as $30 billion and cut its dividend in half and that the bank's profit is likely to fall "sharply" this year and won't recover until 2011, and Nortel Networks files for bankruptcy. Retail sales collapse 2.7%, excluding automobiles slumped 3.1 percent. Business Inventories down .7%. Beige Book reports continuing weakening in the economy. Stocks get hammered with Citigroup down more than 22%.
.
ECONOMIC DATA
8:30 AM Initial Claims
8:30: AM PPI
8:30 AM Core PPI
8:30 AM NY Empire State Manufacturing Index
10:00 AM Philadelphia Fed
YESTERDAY'S MARKET
After reaching its short term resistance level at 875.00 during the Globex session, the SP gave back slowly its nightly gains before the opening making the pre opening lows at 847.25. The e-mini SP opened the session at 852.00 from where it bounced a point just to get sold reaching 848.50. Another feeble bounce failed at 851.25 and the SP get sold strongly reaching 843.75 from where it bounced to 847.00 just to fall once more to a new marginal low at 843.50 just to bounce to 847.50 and then fall to a new low at 840.50. after holding a couple of points above that level and once the crude inventories got release markets pushed to new lows, the SP reached 833.50 as markets continue to melt down. The SP bounced to 836.00, fell to check the lows and bounced to 837.50 just to get sold once more to new lows at 832.50. Another rally attempt pushed the SP back to 840.50 where the rebound lost its steam. After been sitting for a while on a narrow range, the SP backed off to test the 835.50 area and bounced once more reaching the 842.00 level. Traders waited for the release of the Fed's Beige Book while the markets continued to trade in a narrow range above our 835.00 support level. Once the report was released the SP pulled to 836.00 and rallied back to 842.50. After sitting around the 840.00 area, the SP finally broke up reaching 846.50 but the rally failed as bears returned pushing the markets all the way down to the lows. A late bounce managed to reach 839.50 but failed pushing the SP once more for another test of the lows from where it rallied into the close reaching 842.00 before pulling back into the close. For the day, the SP lost 28.75 points and settled at 839.75, the Nasdaq ended lower by 38.50 points at 1165.50 and the Russell lost 20.10 points closing the session at 452.40. The Dow lost 248 points closing the day at 8200.
MARKET COMMENTARY AND OUTLOOK
Last Tuesday I wrote:" Are the markets in front of another capitulation that will push prices much lower? Is the late rebound well above the daily lows a short term indication that markets will reverse the last decline? Both scenarios are possible, however the selling has been done without any panic, and volumes have been really low since last week, so if the trend is still down, today's trading session will have to show a wide range downside day, some panic selling with higher volumes."Yesterday I wrote: "On the other side of the coin, the overall weakness that has been seen in the markets and the reversal, many times, from levels just above yesterday's high on the SP could result in more sideways action until a clear breakout occurs. Today's support and resistance levels are similar to those posted for yesterday's session, the most important difference that I can find is that the breakup point for the SP is above the 876.00-877.50 areas instead of yesterday's 875.50, and I consider that if that index can make it above those levels, the way for the 900.00 mark will be open. But, if the SP starts to trade below 860.00-859.00 and does not post a strong reversal in the next 24 hours more downside pressure could be seen during the coming sessions. Remember that today we have the retail sales numbers that may have a great impact during the session and later at the afternoon the Fed Beige Book that surely will indicate overall weakness in the economy, in all the sectors and in all the different regions."
Markets opened with a big down gap and with heavy selling pressure, and simply broke their support levels. The big fall was done during the first hour of the session and the rest of it was full of erratic moves making difficult to stick to a position. After holding since last November markets have accelerate their downtrend and this increased selling pressures with high volumes may continue once yesterday's lows get broken.
Markets finally returned to reality, bad economic fundamentals, an earnings season that has started with the left foot and the reality of the banks getting revealed. More economic numbers will get released between today and tomorrow, producer and consumer inflation that may show additional weakness in prices, yesterday's import prices indicates that. On the corporate side, JP Morgan will report today and Citigroup tomorrow, both of them before their programmed date. None of this numbers will be good, and the consequences will be seen in the markets, the SP below 831.00 will indicate 818.00, 780.00 and 740.00; the Dow 8000, 7800 and 7500. However, markets have already posted a dramatic fall during the week and a countertrend rally could be near. The trading pattern has showed that the indexes have been trading the last months in a wide range, 850.00 to 920.00 on the SP and 8300 to 9000 on the Dow; so markets should try to return to the range, will it happen today after another down spike, or once President elected Obama occupies the chair and then a "honeymoon" rally began?, it may be. But meanwhile bears have the control and to be a buyer in these market traders will have to see some evidence that the sell off has dried and a short term low has been posted in the charts.
Yesterday's lows on the SP coincide with some other lows posted during last December; will the market rally from here? It can happen, but for those who maintain a long short term position and get hammered during this week, the exit may be near if yesterday's lows get broken, when they will be forced out, you know the markets, they will rally without them; for those who want to get short at these levels for more than a simple intraday trade, it is probably too late, at the moment that a reversal will happen, they will only fuel the move, so the less risky trade is to stay on the sidelines or wait for a countertrend rally to get short, a confirmation that a low is in place will require a rally that last more than 11 days, if not any countertrend move will be only a selling opportunity as it seems that the bear campaign has resumed.
For today's trading session, if yesterday's lows hold, we could see a one day rebound that tries to place the SP back at the 850.00 area before the market decides the next move, but if yesterday's wide range session did not exhausted the selling, then the last countertrend move has already been completed and the markets will suffer another multi day huge sell off that probably will print new lows on this bear campaign.
TODAY'S SESSION
Initial resistance is at 843.00-844.00 on the SP, 1173.00-1175.00 on the Nasdaq and 454.80-455.60 on the Russell. Nothing good happens all the time that the indexes are trading below those areas, in particular the Nasdaq, If the markets rally and exceed those levels look for strong resistance at 848,50-849.50 on the SP, 1178.00-1180.50 on the Nasdaq and 457.90-459.60 on the Russell. If markets surprise with strength, look for additional short covering to push the indexes up to 857.00-858.50 on the SP, 1186.00-1188.00 on the Nasdaq and 463.40-464.10 on the Russell.
Initial support is at 835.00-834.00 on the SP, 1160.00-1158.00 on the Nasdaq and 450.00-448.60 on the Russell, breaking below them will push the markets down below yesterday's lows at 831.50-830.00 on the SP, 1149.00-1147.50 on the Nasdaq and 447.00-448.60 on the Russell. If the selling pressure ends there, with a false break, and the markets reverse above our first support levels, we could see a good rally, however, if that does not happen, look for the melt down to continue pushing the indexes down to 824.75-824.00 on the SP, 1141.00-1139.00 on the Nasdaq and 442.10-440.50 on the Russell. 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
Deutsche Bank $6.3 billion loss. Worries about Citi after it gave control of its brokerage to Morgan Stanley which predicted it will have to raise as much as $30 billion and cut its dividend in half and that the bank's profit is likely to fall "sharply" this year and won't recover until 2011, and Nortel Networks files for bankruptcy. Retail sales collapse 2.7%, excluding automobiles slumped 3.1 percent. Business Inventories down .7%. Beige Book reports continuing weakening in the economy. Stocks get hammered with Citigroup down more than 22%.
.
ECONOMIC DATA
8:30 AM Initial Claims
8:30: AM PPI
8:30 AM Core PPI
8:30 AM NY Empire State Manufacturing Index
10:00 AM Philadelphia Fed
YESTERDAY'S MARKET
After reaching its short term resistance level at 875.00 during the Globex session, the SP gave back slowly its nightly gains before the opening making the pre opening lows at 847.25. The e-mini SP opened the session at 852.00 from where it bounced a point just to get sold reaching 848.50. Another feeble bounce failed at 851.25 and the SP get sold strongly reaching 843.75 from where it bounced to 847.00 just to fall once more to a new marginal low at 843.50 just to bounce to 847.50 and then fall to a new low at 840.50. after holding a couple of points above that level and once the crude inventories got release markets pushed to new lows, the SP reached 833.50 as markets continue to melt down. The SP bounced to 836.00, fell to check the lows and bounced to 837.50 just to get sold once more to new lows at 832.50. Another rally attempt pushed the SP back to 840.50 where the rebound lost its steam. After been sitting for a while on a narrow range, the SP backed off to test the 835.50 area and bounced once more reaching the 842.00 level. Traders waited for the release of the Fed's Beige Book while the markets continued to trade in a narrow range above our 835.00 support level. Once the report was released the SP pulled to 836.00 and rallied back to 842.50. After sitting around the 840.00 area, the SP finally broke up reaching 846.50 but the rally failed as bears returned pushing the markets all the way down to the lows. A late bounce managed to reach 839.50 but failed pushing the SP once more for another test of the lows from where it rallied into the close reaching 842.00 before pulling back into the close. For the day, the SP lost 28.75 points and settled at 839.75, the Nasdaq ended lower by 38.50 points at 1165.50 and the Russell lost 20.10 points closing the session at 452.40. The Dow lost 248 points closing the day at 8200.
MARKET COMMENTARY AND OUTLOOK
Last Tuesday I wrote:" Are the markets in front of another capitulation that will push prices much lower? Is the late rebound well above the daily lows a short term indication that markets will reverse the last decline? Both scenarios are possible, however the selling has been done without any panic, and volumes have been really low since last week, so if the trend is still down, today's trading session will have to show a wide range downside day, some panic selling with higher volumes."Yesterday I wrote: "On the other side of the coin, the overall weakness that has been seen in the markets and the reversal, many times, from levels just above yesterday's high on the SP could result in more sideways action until a clear breakout occurs. Today's support and resistance levels are similar to those posted for yesterday's session, the most important difference that I can find is that the breakup point for the SP is above the 876.00-877.50 areas instead of yesterday's 875.50, and I consider that if that index can make it above those levels, the way for the 900.00 mark will be open. But, if the SP starts to trade below 860.00-859.00 and does not post a strong reversal in the next 24 hours more downside pressure could be seen during the coming sessions. Remember that today we have the retail sales numbers that may have a great impact during the session and later at the afternoon the Fed Beige Book that surely will indicate overall weakness in the economy, in all the sectors and in all the different regions."
Markets opened with a big down gap and with heavy selling pressure, and simply broke their support levels. The big fall was done during the first hour of the session and the rest of it was full of erratic moves making difficult to stick to a position. After holding since last November markets have accelerate their downtrend and this increased selling pressures with high volumes may continue once yesterday's lows get broken.
Markets finally returned to reality, bad economic fundamentals, an earnings season that has started with the left foot and the reality of the banks getting revealed. More economic numbers will get released between today and tomorrow, producer and consumer inflation that may show additional weakness in prices, yesterday's import prices indicates that. On the corporate side, JP Morgan will report today and Citigroup tomorrow, both of them before their programmed date. None of this numbers will be good, and the consequences will be seen in the markets, the SP below 831.00 will indicate 818.00, 780.00 and 740.00; the Dow 8000, 7800 and 7500. However, markets have already posted a dramatic fall during the week and a countertrend rally could be near. The trading pattern has showed that the indexes have been trading the last months in a wide range, 850.00 to 920.00 on the SP and 8300 to 9000 on the Dow; so markets should try to return to the range, will it happen today after another down spike, or once President elected Obama occupies the chair and then a "honeymoon" rally began?, it may be. But meanwhile bears have the control and to be a buyer in these market traders will have to see some evidence that the sell off has dried and a short term low has been posted in the charts.
Yesterday's lows on the SP coincide with some other lows posted during last December; will the market rally from here? It can happen, but for those who maintain a long short term position and get hammered during this week, the exit may be near if yesterday's lows get broken, when they will be forced out, you know the markets, they will rally without them; for those who want to get short at these levels for more than a simple intraday trade, it is probably too late, at the moment that a reversal will happen, they will only fuel the move, so the less risky trade is to stay on the sidelines or wait for a countertrend rally to get short, a confirmation that a low is in place will require a rally that last more than 11 days, if not any countertrend move will be only a selling opportunity as it seems that the bear campaign has resumed.
For today's trading session, if yesterday's lows hold, we could see a one day rebound that tries to place the SP back at the 850.00 area before the market decides the next move, but if yesterday's wide range session did not exhausted the selling, then the last countertrend move has already been completed and the markets will suffer another multi day huge sell off that probably will print new lows on this bear campaign.
TODAY'S SESSION
Initial resistance is at 843.00-844.00 on the SP, 1173.00-1175.00 on the Nasdaq and 454.80-455.60 on the Russell. Nothing good happens all the time that the indexes are trading below those areas, in particular the Nasdaq, If the markets rally and exceed those levels look for strong resistance at 848,50-849.50 on the SP, 1178.00-1180.50 on the Nasdaq and 457.90-459.60 on the Russell. If markets surprise with strength, look for additional short covering to push the indexes up to 857.00-858.50 on the SP, 1186.00-1188.00 on the Nasdaq and 463.40-464.10 on the Russell.
Initial support is at 835.00-834.00 on the SP, 1160.00-1158.00 on the Nasdaq and 450.00-448.60 on the Russell, breaking below them will push the markets down below yesterday's lows at 831.50-830.00 on the SP, 1149.00-1147.50 on the Nasdaq and 447.00-448.60 on the Russell. If the selling pressure ends there, with a false break, and the markets reverse above our first support levels, we could see a good rally, however, if that does not happen, look for the melt down to continue pushing the indexes down to 824.75-824.00 on the SP, 1141.00-1139.00 on the Nasdaq and 442.10-440.50 on the Russell. GOOD LUCK.
.
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TODAY'S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&PNASDAQRUSSELL
Resistance 4863.00-865.001196.00-1199.00467.00-468.60
Resistance 3857.00-858.501186.00-1188.00463.40-464.10
Resistance 2848.50-849.501178.00-1180.50457.90-459.60
Resistance 1843.00-844.001173.00-1175.00454.80-455.60
PIVOT849.001177.00458.20
Support 1835.00-834.001160.00-1158.00450.00-448.60
Support 2831.50-830.001149.00-1147.50447.00-445.20
Support 3824.75-823.001141.00-1139.00442,10-440.50
Support 4818.00-816.001134.00-1132.00437.80-436.90
S&PNASDAQ RUSSELL
FIBONACCIFIBONACCIFIBONACCI
943.771300.14517.28
933.741287.11511.02
917.501266.00500.90
901.271244.89490.78
891.241231.86484.52
875.001210.75474.40
858.771189.64464.28
853.751183.13461.15
848.741176.61458.02
832.501155.50447.90
816.271134.39437.78
806.241121.36431.52
790.001100.25421.40
773.771079.14411.28
763.741066.11405.02
DAILY PROJECTIONS S&PNASDAQRUSSELL
AS DAILY HIGH 857.501188.00463.90
AS DAILY LOW 814.001132.50436.90
S&PNASDAQRUSSELL
Resistance 4863.00-865.001196.00-1199.00467.00-468.60
Resistance 3857.00-858.501186.00-1188.00463.40-464.10
Resistance 2848.50-849.501178.00-1180.50457.90-459.60
Resistance 1843.00-844.001173.00-1175.00454.80-455.60
PIVOT849.001177.00458.20
Support 1835.00-834.001160.00-1158.00450.00-448.60
Support 2831.50-830.001149.00-1147.50447.00-445.20
Support 3824.75-823.001141.00-1139.00442,10-440.50
Support 4818.00-816.001134.00-1132.00437.80-436.90
S&PNASDAQ RUSSELL
FIBONACCIFIBONACCIFIBONACCI
943.771300.14517.28
933.741287.11511.02
917.501266.00500.90
901.271244.89490.78
891.241231.86484.52
875.001210.75474.40
858.771189.64464.28
853.751183.13461.15
848.741176.61458.02
832.501155.50447.90
816.271134.39437.78
806.241121.36431.52
790.001100.25421.40
773.771079.14411.28
763.741066.11405.02
DAILY PROJECTIONS S&PNASDAQRUSSELL
AS DAILY HIGH 857.501188.00463.90
AS DAILY LOW 814.001132.50436.90
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