DAILY TRADING ADVISORY 19-November-2008
Yahoo to replace Yang CEO, HP solid 4Q outlook, Home Depot profits 31% contraction, PPI record 2.8 fall, housing prices down in 80% of the cities and Bernanke and Paulson defending their inconsistent bailout plan result in a rollercoaster session that finally managed to close mixed after a successful test of the 832.00 level on the SP.
ECONOMIC DATA
8:30 AM Building Permits
8:30 AM Core CPI
8:30 AM CPI
8:30 AM Housing Starts
2:00 PM FOMC Minutes
YESTERDAY’S MARKET
After a strong negative Globex session where the E-mini SP sold off reaching the critical 829.25 level, the index opened at 846.00 and bounced to 850.00 from where it pulled back to 855.50 maintaining the opening lows. The SP bounced to 858.50; sold off to 845.00 and rallied all the way back up to 864.50, just below the 866.00 mid term pivot point. As the Bernanke’s and Paulson testimony continued the index sat back to 850.50 but held and trade in a quite narrow range with a bullish bias that finally broke out to new highs reaching the 866.25 on the SP where the rally lost its steam. The SP then pulled back to 858.50, bounced back up to 862.75 and sold off strongly reaching my KEY SUPPORT levels around the 832.00 area where a double bottom resulted in a short covering rally to the 840.00 area just to fail once more pushing to new lows at 824.75 but rebounded strongly reaching 843.50 during the last hour of the session. The SP then pulled back to 834.50, rallied to 847.00 and sold off to 835.50 from where it traded on a narrow range and finally after holding above the 832.00 area rallied strong reaching 851.00 before pulling back to 843.00 just to get bought rallying strong into the end of the session reaching 858.50 before pulling back to 852.00 just to move higher once more into the close. For the day the SP ended higher by 15.50 points and settled at 866.50, the Nasdaq closed the session at 1174.00, up 15.50 points for the session and the Russell finished the day at 454.10, up 4.60 points. The Dow added 151 points closing the session at 8424.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:”So one day has passed and the SP held the 832.00 level, if that level can resist the selling pressure during today’s trading session, it may be that the markets are ready for a second degree countertrend rally, a 12-15 days upside move that pushes prices up well above last week highs around the 915.00 area. On the other side of the coin, failure to move higher during today’s trading session will point first, to a test of the 832.00 area on the SP and the 8000 level on the Dow, but if a higher low is in process to be established, the indexes should be trading higher for Friday’s November option expiration. For today’s trading session, before the opening we’ll get the PPI numbers, expectations are for a sharp drop on the regular number and a zero increase in the core rate, is that good for the U.S. economy, not really, the real p[problem is deflation, lower assets values, but the initial markets reaction could be a powerful short covering rally, if that happens, the SP that at the moment that I am writing my report is trading at 844.00, could reach the 866.00 area, however if the indexes move down, expect the important 832.00 level to be tested, holding there during the session could lead to a multi day rally once that market breaks above 855.00. If that area does not hold, forget about any long position. Initial support is at 847.00-845.50 on the SP, 1152.00-1150.00 on the Nasdaq and 446.50-445.20 on the Russell, trading below them will point for a test of the next support levels at 841.00-838.50 on the SP, 1144.00-1142.00 on the Nasdaq and 442.20-441.00 on the Russell. If those can not hold the selling pressure then the KEY SUPPORT levels at 833.00-831.50 on the SP, 1135.00-1133.00 on the Nasdaq and 437.30-435.80 on the Russell will get visited.”
Yesterday’s successful test of the 832.00 area on the SP is encourage for the markets but must be seen with extreme precaution until the markets show some good follow through to the upside, the importance of yesterday’s late rally will be seen during today’s trading action, we need two consecutive sessions where the indexes move up, and the 866.00 pivotal level on the SP to get strongly exceeded for the markets to change their short term direction. If that not happens, then another test of that level or even lower may be seen during the next days. We have seen various attempts to move lower since October 27th, so the importance top hold the recent lows is critical or much lower prices will be seen. These lows have become obvious support, but I don’t expect another down move to hold, too many times that those levels are reached finally will result in a break down with strong momentum. Yesterday’s late action is bullish on the short term, but so much insistence near the lows should be considered extremely dangerous for the markets all the time that the SP keeps trading below the 915.00 area and the Dow below 9000. If the markets will break below yesterday’s lows the near term panorama will have only one direction, down. There is not real evidence that a short term low is in place, but this third test of the October lows could result in our expected rally to the 1040.00-1060.00 area during the next 45 days, and then another sharp down leg that completes the bear campaign during the first six months of the next year. So the risk of the markets to continue with the current downtrend will be present all the time that the SP keeps trading below the 915.00 area, we need to see a rally above that level or the current rally to hold for more than four sessions, that will take us to next Tuesday, until then, yesterday’s powerful reversal is only a one day countertrend move.
For today’s trading session, a pullback that holds the 853.00-851.50 area during the first hour of the session, will be a good indication of higher prices, but take into account that the SP will have to hold the 866.00 area for this rally to gain some more upside momentum. A consolidation of yesterday’s move between the 866.00 and the 841.00 area is also possible. Evidence that yesterday’s rally is failing? The SP trading below 832.00 and the Dow below 8120.
.
TODAY’S SESSION
Initial resistance is at 868.00-869.50on the SP, 1182.00-1184.00 on the Nasdaq and 456.30-456.80 on the Russell, nothing good happens unless those levels get exceeded, if that is the case look for the indexes to move higher reaching their next levels at 874.00-875.00 on the SP, 1193.00-1194.50 on the Nasdaq and 459.50-461.00 on the Russell. Beware of a reversal at those areas, but if the markets are strong and they want to show some follow through to the upside, look for the next levels at 880.50-882.00 on the SP, 1206.00-1208.00 on the Nasdaq and 465.30-466.30 on the Russell to get tested before the session is over. These areas are critical in particular for the E-mini Nasdaq.
First support is at 860.00-858.50 on the SP, 1168.00-1166.50 on the Nasdaq and 451.40-448.90 on the Russell. Failing to hold there will indicate a test of 853.00-8515.50 on the SP, 1160.00-1158.00 on the Nasdaq and 445.30-44.50 on the Russell. If the trend is up, those levels MUST hold, however, if yesterday’s late rally was only a fake one look for the indexes to break lower reaching 842.00-841.00 on the SP, 1139.00-1137.00 on the Nasdaq and 441.10-439.80 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
Yahoo to replace Yang CEO, HP solid 4Q outlook, Home Depot profits 31% contraction, PPI record 2.8 fall, housing prices down in 80% of the cities and Bernanke and Paulson defending their inconsistent bailout plan result in a rollercoaster session that finally managed to close mixed after a successful test of the 832.00 level on the SP.
ECONOMIC DATA
8:30 AM Building Permits
8:30 AM Core CPI
8:30 AM CPI
8:30 AM Housing Starts
2:00 PM FOMC Minutes
YESTERDAY’S MARKET
After a strong negative Globex session where the E-mini SP sold off reaching the critical 829.25 level, the index opened at 846.00 and bounced to 850.00 from where it pulled back to 855.50 maintaining the opening lows. The SP bounced to 858.50; sold off to 845.00 and rallied all the way back up to 864.50, just below the 866.00 mid term pivot point. As the Bernanke’s and Paulson testimony continued the index sat back to 850.50 but held and trade in a quite narrow range with a bullish bias that finally broke out to new highs reaching the 866.25 on the SP where the rally lost its steam. The SP then pulled back to 858.50, bounced back up to 862.75 and sold off strongly reaching my KEY SUPPORT levels around the 832.00 area where a double bottom resulted in a short covering rally to the 840.00 area just to fail once more pushing to new lows at 824.75 but rebounded strongly reaching 843.50 during the last hour of the session. The SP then pulled back to 834.50, rallied to 847.00 and sold off to 835.50 from where it traded on a narrow range and finally after holding above the 832.00 area rallied strong reaching 851.00 before pulling back to 843.00 just to get bought rallying strong into the end of the session reaching 858.50 before pulling back to 852.00 just to move higher once more into the close. For the day the SP ended higher by 15.50 points and settled at 866.50, the Nasdaq closed the session at 1174.00, up 15.50 points for the session and the Russell finished the day at 454.10, up 4.60 points. The Dow added 151 points closing the session at 8424.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:”So one day has passed and the SP held the 832.00 level, if that level can resist the selling pressure during today’s trading session, it may be that the markets are ready for a second degree countertrend rally, a 12-15 days upside move that pushes prices up well above last week highs around the 915.00 area. On the other side of the coin, failure to move higher during today’s trading session will point first, to a test of the 832.00 area on the SP and the 8000 level on the Dow, but if a higher low is in process to be established, the indexes should be trading higher for Friday’s November option expiration. For today’s trading session, before the opening we’ll get the PPI numbers, expectations are for a sharp drop on the regular number and a zero increase in the core rate, is that good for the U.S. economy, not really, the real p[problem is deflation, lower assets values, but the initial markets reaction could be a powerful short covering rally, if that happens, the SP that at the moment that I am writing my report is trading at 844.00, could reach the 866.00 area, however if the indexes move down, expect the important 832.00 level to be tested, holding there during the session could lead to a multi day rally once that market breaks above 855.00. If that area does not hold, forget about any long position. Initial support is at 847.00-845.50 on the SP, 1152.00-1150.00 on the Nasdaq and 446.50-445.20 on the Russell, trading below them will point for a test of the next support levels at 841.00-838.50 on the SP, 1144.00-1142.00 on the Nasdaq and 442.20-441.00 on the Russell. If those can not hold the selling pressure then the KEY SUPPORT levels at 833.00-831.50 on the SP, 1135.00-1133.00 on the Nasdaq and 437.30-435.80 on the Russell will get visited.”
Yesterday’s successful test of the 832.00 area on the SP is encourage for the markets but must be seen with extreme precaution until the markets show some good follow through to the upside, the importance of yesterday’s late rally will be seen during today’s trading action, we need two consecutive sessions where the indexes move up, and the 866.00 pivotal level on the SP to get strongly exceeded for the markets to change their short term direction. If that not happens, then another test of that level or even lower may be seen during the next days. We have seen various attempts to move lower since October 27th, so the importance top hold the recent lows is critical or much lower prices will be seen. These lows have become obvious support, but I don’t expect another down move to hold, too many times that those levels are reached finally will result in a break down with strong momentum. Yesterday’s late action is bullish on the short term, but so much insistence near the lows should be considered extremely dangerous for the markets all the time that the SP keeps trading below the 915.00 area and the Dow below 9000. If the markets will break below yesterday’s lows the near term panorama will have only one direction, down. There is not real evidence that a short term low is in place, but this third test of the October lows could result in our expected rally to the 1040.00-1060.00 area during the next 45 days, and then another sharp down leg that completes the bear campaign during the first six months of the next year. So the risk of the markets to continue with the current downtrend will be present all the time that the SP keeps trading below the 915.00 area, we need to see a rally above that level or the current rally to hold for more than four sessions, that will take us to next Tuesday, until then, yesterday’s powerful reversal is only a one day countertrend move.
For today’s trading session, a pullback that holds the 853.00-851.50 area during the first hour of the session, will be a good indication of higher prices, but take into account that the SP will have to hold the 866.00 area for this rally to gain some more upside momentum. A consolidation of yesterday’s move between the 866.00 and the 841.00 area is also possible. Evidence that yesterday’s rally is failing? The SP trading below 832.00 and the Dow below 8120.
.
TODAY’S SESSION
Initial resistance is at 868.00-869.50on the SP, 1182.00-1184.00 on the Nasdaq and 456.30-456.80 on the Russell, nothing good happens unless those levels get exceeded, if that is the case look for the indexes to move higher reaching their next levels at 874.00-875.00 on the SP, 1193.00-1194.50 on the Nasdaq and 459.50-461.00 on the Russell. Beware of a reversal at those areas, but if the markets are strong and they want to show some follow through to the upside, look for the next levels at 880.50-882.00 on the SP, 1206.00-1208.00 on the Nasdaq and 465.30-466.30 on the Russell to get tested before the session is over. These areas are critical in particular for the E-mini Nasdaq.
First support is at 860.00-858.50 on the SP, 1168.00-1166.50 on the Nasdaq and 451.40-448.90 on the Russell. Failing to hold there will indicate a test of 853.00-8515.50 on the SP, 1160.00-1158.00 on the Nasdaq and 445.30-44.50 on the Russell. If the trend is up, those levels MUST hold, however, if yesterday’s late rally was only a fake one look for the indexes to break lower reaching 842.00-841.00 on the SP, 1139.00-1137.00 on the Nasdaq and 441.10-439.80 on the Russell. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 889.00-890.50 1216.00-1218.00 470.40-471.10
Resistance 3 880.50-882.00 1206.00-1208.00 465.30-466.30
Resistance 2 874.00-875.00 1193.00-1194.50 459.50-461.00
Resistance 1 868.00-869.50 1182.00-1184.00 456.30-456.80
PIVOT 853.50 1154.00 447.20
Support 1 860.00-858.50 1168.00-1166.50 451.40-448.90
Support 2 853.00-851.50 1160.00-1158.00 445.30-444.50
Support 3 842.00-841.00 1139.00-1137.50 441.10-439.80
Support 4 836.00-834.00 1132.00-1130.00 434.80-433.30
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
937.98 1268.84 499.25
929.77 1257.16 494.15
916.50 1238.25 485.90
903.23 1219.34 477.65
895.02 1207.66 472.55
881.75 1188.75 464.30
868.48 1169.84 456.05
864.38 1164.00 453.50
860.27 1158.16 450.95
847.00 1139.25 442.70
833.73 1120.34 434.45
825.52 1108.66 429.35
812.25 1089.75 421.10
798.98 1070.84 412.85
790.77 1059.16 407.75
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 889.75 1206.00 471.10
AS DAILY LOW 845.50 1143.50 441.50
S&P NASDAQ RUSSELL
Resistance 4 889.00-890.50 1216.00-1218.00 470.40-471.10
Resistance 3 880.50-882.00 1206.00-1208.00 465.30-466.30
Resistance 2 874.00-875.00 1193.00-1194.50 459.50-461.00
Resistance 1 868.00-869.50 1182.00-1184.00 456.30-456.80
PIVOT 853.50 1154.00 447.20
Support 1 860.00-858.50 1168.00-1166.50 451.40-448.90
Support 2 853.00-851.50 1160.00-1158.00 445.30-444.50
Support 3 842.00-841.00 1139.00-1137.50 441.10-439.80
Support 4 836.00-834.00 1132.00-1130.00 434.80-433.30
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
937.98 1268.84 499.25
929.77 1257.16 494.15
916.50 1238.25 485.90
903.23 1219.34 477.65
895.02 1207.66 472.55
881.75 1188.75 464.30
868.48 1169.84 456.05
864.38 1164.00 453.50
860.27 1158.16 450.95
847.00 1139.25 442.70
833.73 1120.34 434.45
825.52 1108.66 429.35
812.25 1089.75 421.10
798.98 1070.84 412.85
790.77 1059.16 407.75
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 889.75 1206.00 471.10
AS DAILY LOW 845.50 1143.50 441.50
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
