DAILY TRADING ADVISORY 29-December-2008
Markets fluctuate during last holiday shortened week. GMAC gets approval as a bank holding company. Markets watch closely after-Christmas sales.
WEEKLY PIVOTS FOR WEEK ENDING 02- January-2008
R3 928.25
R2 909.00
R1 889.50
PP 871.00
S1 850.00
S2 832.50
S3 811.00
ECONOMIC DATA
None
WEEKLY RECAP
A disappointing week for the U.S. equity markets as the expected Christmas rally never came true. After trading above the 900.00 area in the SP during the previous week, the index failed to continue on its way up to the 940.00-960.00 levels. Monday’s session started with the notice that Toyota has its first operating loss ever. The automakers bailout plan finally was decided by President Bush authorizing a $17.4 billion bridge loan and the commitment of the big three to restructure. However their stock fell as investors feared that the stock value will get diluted. Walgreens disappointed with its earnings report and outlook and commercial mortgage defaults emerged in the construction sector. After a higher opening the indexes traded with a negative sentiment during all the session but a strong late rally managed to help the markets not to close with big losses. Tuesday’s session started with the release of the expected economic numbers, GDP minus .5% as year old recession deepens, New Home Sales at its lowest level since 1991 and worst than estimated Michigan sentiment index reading. CIT Group became a bank holding company in order to be able to receive another chunk of the TARP funds. American Express also received $3.39 billion as part of the government's rescue program. Housing prices continued to collapse. Trading volumes where low than the previous session as traders and institutional investors started to leave for the Christmas Holiday’s celebration. Wednesday’s trading action started with the release of the weekly jobless applications which saw a 26 year high, 586K. Durable good orders were down by 1% but it was better than expected. Consumer income and spending was on line, however, consumer spending showed its fourth month consecutive decline. Volumes continue to be very light and illiquidity was seen during the trading session, ranges were narrow and the indexes closed mixed for the day. The SP gained 6.50 points and settled at 865.00, the Nasdaq ended lower by 4.50 points at 1180.00 and the Russell added 6.40 points ending the session at 471.00. The Dow added 48 points closing at 8468. Thursday, markets were closed as the world celebrated Christmas, and Friday, as expected, a thin low volume session and narrow range, but a slightly advance for the markets. For the day, the SP closed higher by 4.00 points at 869.00, the Nasdaq gained 8.50 points ending the session at 1188.50 and the Russell closed at 473.90, up 2.90 points for the day. The Dow closed above the 8500 mark at 8515 with a 47.00 point gain.
MARKET COMMENTARY AND OUTLOOK
Last week low trading volumes should be seen as normal during this time of the year, and, probably, investors and traders will continue to stay on the sidelines as this week New Year’s celebrations is another shortened one. Last week consolidation came after a few attempts on the different markets to break higher, and its result on the daily charts, seem to be a failure to continue with what was an expected Santa’s rally or end of year rally. This means that all the time that the markets are trading below the 920.00 on the SP, 9000 on the Dow and 500.00 on the Russell, the best players can expect, is a wide range sideways pattern, that if we observe market and economy conditions, will have to result in another test of the lows or another low before the indexes manage to move above the levels I mentioned. There are two different scenarios; the first one is that this struggling upside move manages to make another attempt to continue to our upside 940.00-960.00 objectives on the SP and then falls to a new low, or, that after a few more days of consolidation, longs give up pulling their bids and bears regain the control pressing the markets much more lower. I still favor the first scenario, I think is too early for the markets to print another leg down, but obviously, a rally will be only a bear market rally. Nothing has changed in the U.S. economy to make us think that the situation will get better during the third quarter of next year, so the markets, that some analyst say that anticipate the economy by six months, do not have the support to move higher on the presumption that the economic conditions will improve during the next year. Bailout’s, continuing falling housing prices, high unemployment, shrinking manufacturing on all the sectors, and many other unpredictable events seem to be the every day situation for the economy. However, the President elected Obama’s stimulus plan, the Fed’s printing machine, should keep at least the hope that the economy won’t fall apart.
On the short term, last week trading action has continued to respect the current ranges and the triangle formation, and if we don’t get a big breakout during this week, it’s only because the low volumes do not allow it, but be sure that we are near the next sizeable move. So until that breakout happens, trading both sides of the markets should be the way to go, of course be aware of a directional move or a trend session. This time of the year, and the low volumes favor the long side, so if the markets break above our first or second resistance levels, stop trading from the short side as the few short players could be covering to offset their positions. It is very important to take into account that most of the professional and high volume traders will not be participating in the markets until next week, so if you are on vacation, there is not rush to jump into the markets.
TODAY’S SESSION
There is resistance at 869.50-870.50 on the SP, 1190.50-1191.50 on the Nasdaq and 474.80-475.70 on the Russell. Markets are weak all the time that they keep trading below those levels. If finally we start to see trading action above them, look for the indexes to reach their next resistance areas at 874.00-876.00 on the SP, 1195.00-1196.00 on the Nasdaq and 478.00-479.20 on the Russell. Low trading volumes could make difficult for a rally to extend above them, and side ways action may be seen between thgose highs and the third support levels, however4, if the indexes are able to break above them, look for the rally to continue testing the important 879.50-881.00 areas on the SP, 1201.00-1203.00 on the Nasdaq and 482.10-483.50 on the Russell. If those are exceeded, look for the rally to continue into the end of the week.
There is some support at 867.50-866.00 on the SP, 1186.00-1185.00 on the NQ and 472.10-471.30 on the Russell; breaking below them should result in a test of 864.00-863.00 on the SP, 1181.00-1179.00 on the Nasdaq and 468.60-468.40 on the Russell. If those can not hold, the key support levels at 858.00-856.50 on the SP, 1173.00-1172.00 on the Nasdaq and 462.90-461.50 on the Russell may be visited before some buyers jump in. Take into account that if those can not hold, we could be heading lower for a test of the 850.00’s 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
Markets fluctuate during last holiday shortened week. GMAC gets approval as a bank holding company. Markets watch closely after-Christmas sales.
WEEKLY PIVOTS FOR WEEK ENDING 02- January-2008
R3 928.25
R2 909.00
R1 889.50
PP 871.00
S1 850.00
S2 832.50
S3 811.00
ECONOMIC DATA
None
WEEKLY RECAP
A disappointing week for the U.S. equity markets as the expected Christmas rally never came true. After trading above the 900.00 area in the SP during the previous week, the index failed to continue on its way up to the 940.00-960.00 levels. Monday’s session started with the notice that Toyota has its first operating loss ever. The automakers bailout plan finally was decided by President Bush authorizing a $17.4 billion bridge loan and the commitment of the big three to restructure. However their stock fell as investors feared that the stock value will get diluted. Walgreens disappointed with its earnings report and outlook and commercial mortgage defaults emerged in the construction sector. After a higher opening the indexes traded with a negative sentiment during all the session but a strong late rally managed to help the markets not to close with big losses. Tuesday’s session started with the release of the expected economic numbers, GDP minus .5% as year old recession deepens, New Home Sales at its lowest level since 1991 and worst than estimated Michigan sentiment index reading. CIT Group became a bank holding company in order to be able to receive another chunk of the TARP funds. American Express also received $3.39 billion as part of the government's rescue program. Housing prices continued to collapse. Trading volumes where low than the previous session as traders and institutional investors started to leave for the Christmas Holiday’s celebration. Wednesday’s trading action started with the release of the weekly jobless applications which saw a 26 year high, 586K. Durable good orders were down by 1% but it was better than expected. Consumer income and spending was on line, however, consumer spending showed its fourth month consecutive decline. Volumes continue to be very light and illiquidity was seen during the trading session, ranges were narrow and the indexes closed mixed for the day. The SP gained 6.50 points and settled at 865.00, the Nasdaq ended lower by 4.50 points at 1180.00 and the Russell added 6.40 points ending the session at 471.00. The Dow added 48 points closing at 8468. Thursday, markets were closed as the world celebrated Christmas, and Friday, as expected, a thin low volume session and narrow range, but a slightly advance for the markets. For the day, the SP closed higher by 4.00 points at 869.00, the Nasdaq gained 8.50 points ending the session at 1188.50 and the Russell closed at 473.90, up 2.90 points for the day. The Dow closed above the 8500 mark at 8515 with a 47.00 point gain.
MARKET COMMENTARY AND OUTLOOK
Last week low trading volumes should be seen as normal during this time of the year, and, probably, investors and traders will continue to stay on the sidelines as this week New Year’s celebrations is another shortened one. Last week consolidation came after a few attempts on the different markets to break higher, and its result on the daily charts, seem to be a failure to continue with what was an expected Santa’s rally or end of year rally. This means that all the time that the markets are trading below the 920.00 on the SP, 9000 on the Dow and 500.00 on the Russell, the best players can expect, is a wide range sideways pattern, that if we observe market and economy conditions, will have to result in another test of the lows or another low before the indexes manage to move above the levels I mentioned. There are two different scenarios; the first one is that this struggling upside move manages to make another attempt to continue to our upside 940.00-960.00 objectives on the SP and then falls to a new low, or, that after a few more days of consolidation, longs give up pulling their bids and bears regain the control pressing the markets much more lower. I still favor the first scenario, I think is too early for the markets to print another leg down, but obviously, a rally will be only a bear market rally. Nothing has changed in the U.S. economy to make us think that the situation will get better during the third quarter of next year, so the markets, that some analyst say that anticipate the economy by six months, do not have the support to move higher on the presumption that the economic conditions will improve during the next year. Bailout’s, continuing falling housing prices, high unemployment, shrinking manufacturing on all the sectors, and many other unpredictable events seem to be the every day situation for the economy. However, the President elected Obama’s stimulus plan, the Fed’s printing machine, should keep at least the hope that the economy won’t fall apart.
On the short term, last week trading action has continued to respect the current ranges and the triangle formation, and if we don’t get a big breakout during this week, it’s only because the low volumes do not allow it, but be sure that we are near the next sizeable move. So until that breakout happens, trading both sides of the markets should be the way to go, of course be aware of a directional move or a trend session. This time of the year, and the low volumes favor the long side, so if the markets break above our first or second resistance levels, stop trading from the short side as the few short players could be covering to offset their positions. It is very important to take into account that most of the professional and high volume traders will not be participating in the markets until next week, so if you are on vacation, there is not rush to jump into the markets.
TODAY’S SESSION
There is resistance at 869.50-870.50 on the SP, 1190.50-1191.50 on the Nasdaq and 474.80-475.70 on the Russell. Markets are weak all the time that they keep trading below those levels. If finally we start to see trading action above them, look for the indexes to reach their next resistance areas at 874.00-876.00 on the SP, 1195.00-1196.00 on the Nasdaq and 478.00-479.20 on the Russell. Low trading volumes could make difficult for a rally to extend above them, and side ways action may be seen between thgose highs and the third support levels, however4, if the indexes are able to break above them, look for the rally to continue testing the important 879.50-881.00 areas on the SP, 1201.00-1203.00 on the Nasdaq and 482.10-483.50 on the Russell. If those are exceeded, look for the rally to continue into the end of the week.
There is some support at 867.50-866.00 on the SP, 1186.00-1185.00 on the NQ and 472.10-471.30 on the Russell; breaking below them should result in a test of 864.00-863.00 on the SP, 1181.00-1179.00 on the Nasdaq and 468.60-468.40 on the Russell. If those can not hold, the key support levels at 858.00-856.50 on the SP, 1173.00-1172.00 on the Nasdaq and 462.90-461.50 on the Russell may be visited before some buyers jump in. Take into account that if those can not hold, we could be heading lower for a test of the 850.00’s on the SP. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 885.00-886.00 1210.00-1212.00 489.80-491.20
Resistance 3 879.50-881.00 1201.00-1203.00 482.10-483.50
Resistance 2 874.00-876.00 1195.00-1196.00 478.00-479.20
Resistance 1 869.50-870.50 1190.50-1191.50 474.80-475.70
PIVOT 867.50 1186.00 472.50
Support 1 867.50-866.00 1186.00-1185.00 472.10-471.30
Support 2 864.00-863.00 1181.00-1179.00 468.60-468.40
Support 3 858.00-856.50 1173.00-1172.00 462.90-461.50
Support 4 850.00-848.50 1161.00-1160.00 454.70-453.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
886.31 1210.82 492.13
884.19 1207.93 489.87
880.75 1203.25 486.20
877.31 1198.57 482.53
875.19 1195.68 480.27
871.75 1191.00 476.60
868.31 1186.32 472.93
867.25 1184.88 471.80
866.19 1183.43 470.67
862.75 1178.75 467.00
859.31 1174.07 463.33
857.19 1171.18 461.07
853.75 1166.50 457.40
850.31 1161.82 453.73
848.19 1158.93 451.47
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 874.75 1195.75 480.10
AS DAILY LOW 865.75 1183.50 470.50
S&P NASDAQ RUSSELL
Resistance 4 885.00-886.00 1210.00-1212.00 489.80-491.20
Resistance 3 879.50-881.00 1201.00-1203.00 482.10-483.50
Resistance 2 874.00-876.00 1195.00-1196.00 478.00-479.20
Resistance 1 869.50-870.50 1190.50-1191.50 474.80-475.70
PIVOT 867.50 1186.00 472.50
Support 1 867.50-866.00 1186.00-1185.00 472.10-471.30
Support 2 864.00-863.00 1181.00-1179.00 468.60-468.40
Support 3 858.00-856.50 1173.00-1172.00 462.90-461.50
Support 4 850.00-848.50 1161.00-1160.00 454.70-453.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
886.31 1210.82 492.13
884.19 1207.93 489.87
880.75 1203.25 486.20
877.31 1198.57 482.53
875.19 1195.68 480.27
871.75 1191.00 476.60
868.31 1186.32 472.93
867.25 1184.88 471.80
866.19 1183.43 470.67
862.75 1178.75 467.00
859.31 1174.07 463.33
857.19 1171.18 461.07
853.75 1166.50 457.40
850.31 1161.82 453.73
848.19 1158.93 451.47
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 874.75 1195.75 480.10
AS DAILY LOW 865.75 1183.50 470.50
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