DAILY TRADING ADVISORY 31-December-2008
GMAC receives $5 billion in bailout funds. GM and Ford trade higher as loans may be available for auto buying. S&P Case-Shiller index shows a record 18% drop in housing prices, U.S. Weekly Retail Sales Fall Most in almost 6 Years. Chicago PMI better than expected but still showing economic activity contraction. Consumer confidence hit a record low in December. Markets rally into the end of the session.
ECONOMIC DATA
8:30 AM Initial Claims
YESTERDAY’S MARKET
The E-mini SP started the session at 873.00 after trading in positive territory the entire Globex session. An initial pullback to 871.00 held and as markets expected the release of the economic data, the index bounced to 874.00, backed off and printed a new low at 868.75 after the release of the consumer confidence data. After holding the selling pressure just above our 868.50, the SP bounced to 872.00, traded in a narrow range for a few minutes and then continued higher reaching 877.00 where the rally stalled. The E-mini SP pulled back to 873.50 where buyers stepped in and once it broke above the 875.50 continued to move higher reaching our upside objective at 882.50. After spending some time near the highs, the SP pulled back to 876.50 just to see buyers jumping in once more pushing the index to 881.00. Another pullback pushed the SP down to 875.75 from where the index traded on a sideways pattern for an hour and then bounced back up to 880.00, pulled back to 875.00 and once more bounced back up. The SP managed to hold between the 877.00 and 880.50 until the last hour of the session as it waited for the Russell to break above our updated resistance area at 473.80. Once that happened, the SP hesitated, but finally pushed higher in a late rally. For the day, the SP added 17.75 points closing the day at 888.25, the Nasdaq which, as I was expecting finally showed some strength after gaining 30.50 points and settling at 1206.00 and the Russell ended at 483.60, up 15.10 points. The Dow gained 184 points ending the session at 8668.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” On extremely low volumes that only picked up into the close, markets started the day with notorious weakness dropping precisely to the current support levels before bouncing into the close. The indexes keep holding the current ranges that run between 850.00-920.00 on the SP and 8400-9000 on the Dow. Yesterday’s trading action and the late rally may indicate that another test of the high boundary of the current ranges may be in the cards, and, if today, after the release of the Consumer Confidence data, that traders expect to show a slightly increase from last month, the markets are able to hold, we could see a positive session in front of the end of the year. I wrote yesterday that low trading volumes favor the long side of the markets, and yesterday’s late rally should offer support for some upside movement and higher prices for the rest of the week, however, making predictions with such low volumes and lack of liquidity could be premature. Remember that the 881.25 area on the SP should offer strong resistance, but once it gets cleared chances for a late Christmas rally that could reach the 900.00-920.00 areas on the SP will get increased. Of course more movement should be seen within this wide range until a solid breakout occurs and traders should remain aware that volumes. I would like to see the Nasdaq leading the upside move, as that index may be ready to try and move higher after being trading with extremely weakness during the last seven days. So, for today’s trading session I will favor the long side of the markets despite the fact that trading action could be jumpy, but I can not rule out an uptrend session if the SP can hold our pivot point during the first hour of the session.”
We started the session expecting the markets to move higher leaded by the Nasdaq, the session started with a positive tone and the bullish momentum was build during the session. This classical end of year rally, with extremely low volumes, has been expected and does not constitute a surprise. The worst than expected economic data was irrelevant and it seems that only in the coming weeks, when it probably get worst will have the logical impact on the markets.
Yesterday’s rally comes from a successful test of the short term support areas on the SP and Dow, and from and expected reaction on the Nasdaq after a string of weak sessions. Where is the market going? It should be able to push higher for a test of the 9000 area on the Dow and probably the 920.00-940.00 areas on the SP. Yesterday’s close above 879.50 on the SP has placed that index in a strong position, and I assume we should see the 900.00 level during today’s trading session, of course, volumes will be ultra light, some of the trading products will close early, markets will be closed tomorrow and not too much traders will come to work on Friday. So the real action will start only by next Monday or Tuesday when trading volumes start to increase. So the markets continue to trade on this wide range, 850.00 to 920.00 on the SP and 8350 to 9000 on the Dow. That means that after the last test of the lower boundary of the range, we are on the way for a test of the higher limit, once those ranges get broken the next sizeable move will be seen.
For day traders, expect a low volume trading session with the indexes inching higher, an initial sell off that test the 882.00 area on the SP should be a good buying opportunity. It is not normal to see two consecutive trend sessions, but despite jumpy or erratic conditions buying the pullbacks should offer the best trading opportunities. Look for a 20.00 SP points rally from the daily lows.
TODAY’S SESSION
There is initial resistance at 890.00-891.00 on the SP, 1208.00-1209.00 on the Nasdaq and 485.30-486.90 on the Russell. I assume that once they get exceeded, markets won’t have any problem to push higher testing 894.00-895.50 on the SP, 1212.50-1215.00 on the Nasdaq and 488.70-490.00 on the Russell. Those should offer good resistance the first time they get tested and a 10.00 points pullback on the SP could be seen from those areas, but once the markets resume their rally, they should be able to reach 899.00-900.50 on the SP, 1223.00-1224.00 on the Nasdaq and 493.30-493.90 on the Russell. Breaking above them will force the remaining short to run and cover.
There is support at 886.00-884.00 on the SP, 1203.00-1201.00 on the Nasdaq and 482.00-480.30 on the Russell. If the opening tests those areas, look for a bounce, but don’t overstay with your long position as we should see those areas tested a few times during the session. If those do not hold look for strong support at 882.00-879.75 on the SP, 1196.00-1194.00 on the Nasdaq and 477.00-576.20 on the Russell. If my calculation are OK, a pullback must held near those levels, but if the markets push lower look for a test of 875.00-874.00 on the SP, 1186.00-1184.00 on the Nasdaq and 473.00-471.80 on the Russell. Getting there will be an “end of year gift” for everybody looking where to get long. 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
THEMINITRADE WISH TO ALL OF YOU A HAPPY NEW YEAR
We remind you that service won’t be available next Thursday and Friday
We remind you that service won’t be available next Thursday and Friday
GMAC receives $5 billion in bailout funds. GM and Ford trade higher as loans may be available for auto buying. S&P Case-Shiller index shows a record 18% drop in housing prices, U.S. Weekly Retail Sales Fall Most in almost 6 Years. Chicago PMI better than expected but still showing economic activity contraction. Consumer confidence hit a record low in December. Markets rally into the end of the session.
ECONOMIC DATA
8:30 AM Initial Claims
YESTERDAY’S MARKET
The E-mini SP started the session at 873.00 after trading in positive territory the entire Globex session. An initial pullback to 871.00 held and as markets expected the release of the economic data, the index bounced to 874.00, backed off and printed a new low at 868.75 after the release of the consumer confidence data. After holding the selling pressure just above our 868.50, the SP bounced to 872.00, traded in a narrow range for a few minutes and then continued higher reaching 877.00 where the rally stalled. The E-mini SP pulled back to 873.50 where buyers stepped in and once it broke above the 875.50 continued to move higher reaching our upside objective at 882.50. After spending some time near the highs, the SP pulled back to 876.50 just to see buyers jumping in once more pushing the index to 881.00. Another pullback pushed the SP down to 875.75 from where the index traded on a sideways pattern for an hour and then bounced back up to 880.00, pulled back to 875.00 and once more bounced back up. The SP managed to hold between the 877.00 and 880.50 until the last hour of the session as it waited for the Russell to break above our updated resistance area at 473.80. Once that happened, the SP hesitated, but finally pushed higher in a late rally. For the day, the SP added 17.75 points closing the day at 888.25, the Nasdaq which, as I was expecting finally showed some strength after gaining 30.50 points and settling at 1206.00 and the Russell ended at 483.60, up 15.10 points. The Dow gained 184 points ending the session at 8668.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” On extremely low volumes that only picked up into the close, markets started the day with notorious weakness dropping precisely to the current support levels before bouncing into the close. The indexes keep holding the current ranges that run between 850.00-920.00 on the SP and 8400-9000 on the Dow. Yesterday’s trading action and the late rally may indicate that another test of the high boundary of the current ranges may be in the cards, and, if today, after the release of the Consumer Confidence data, that traders expect to show a slightly increase from last month, the markets are able to hold, we could see a positive session in front of the end of the year. I wrote yesterday that low trading volumes favor the long side of the markets, and yesterday’s late rally should offer support for some upside movement and higher prices for the rest of the week, however, making predictions with such low volumes and lack of liquidity could be premature. Remember that the 881.25 area on the SP should offer strong resistance, but once it gets cleared chances for a late Christmas rally that could reach the 900.00-920.00 areas on the SP will get increased. Of course more movement should be seen within this wide range until a solid breakout occurs and traders should remain aware that volumes. I would like to see the Nasdaq leading the upside move, as that index may be ready to try and move higher after being trading with extremely weakness during the last seven days. So, for today’s trading session I will favor the long side of the markets despite the fact that trading action could be jumpy, but I can not rule out an uptrend session if the SP can hold our pivot point during the first hour of the session.”
We started the session expecting the markets to move higher leaded by the Nasdaq, the session started with a positive tone and the bullish momentum was build during the session. This classical end of year rally, with extremely low volumes, has been expected and does not constitute a surprise. The worst than expected economic data was irrelevant and it seems that only in the coming weeks, when it probably get worst will have the logical impact on the markets.
Yesterday’s rally comes from a successful test of the short term support areas on the SP and Dow, and from and expected reaction on the Nasdaq after a string of weak sessions. Where is the market going? It should be able to push higher for a test of the 9000 area on the Dow and probably the 920.00-940.00 areas on the SP. Yesterday’s close above 879.50 on the SP has placed that index in a strong position, and I assume we should see the 900.00 level during today’s trading session, of course, volumes will be ultra light, some of the trading products will close early, markets will be closed tomorrow and not too much traders will come to work on Friday. So the real action will start only by next Monday or Tuesday when trading volumes start to increase. So the markets continue to trade on this wide range, 850.00 to 920.00 on the SP and 8350 to 9000 on the Dow. That means that after the last test of the lower boundary of the range, we are on the way for a test of the higher limit, once those ranges get broken the next sizeable move will be seen.
For day traders, expect a low volume trading session with the indexes inching higher, an initial sell off that test the 882.00 area on the SP should be a good buying opportunity. It is not normal to see two consecutive trend sessions, but despite jumpy or erratic conditions buying the pullbacks should offer the best trading opportunities. Look for a 20.00 SP points rally from the daily lows.
TODAY’S SESSION
There is initial resistance at 890.00-891.00 on the SP, 1208.00-1209.00 on the Nasdaq and 485.30-486.90 on the Russell. I assume that once they get exceeded, markets won’t have any problem to push higher testing 894.00-895.50 on the SP, 1212.50-1215.00 on the Nasdaq and 488.70-490.00 on the Russell. Those should offer good resistance the first time they get tested and a 10.00 points pullback on the SP could be seen from those areas, but once the markets resume their rally, they should be able to reach 899.00-900.50 on the SP, 1223.00-1224.00 on the Nasdaq and 493.30-493.90 on the Russell. Breaking above them will force the remaining short to run and cover.
There is support at 886.00-884.00 on the SP, 1203.00-1201.00 on the Nasdaq and 482.00-480.30 on the Russell. If the opening tests those areas, look for a bounce, but don’t overstay with your long position as we should see those areas tested a few times during the session. If those do not hold look for strong support at 882.00-879.75 on the SP, 1196.00-1194.00 on the Nasdaq and 477.00-576.20 on the Russell. If my calculation are OK, a pullback must held near those levels, but if the markets push lower look for a test of 875.00-874.00 on the SP, 1186.00-1184.00 on the Nasdaq and 473.00-471.80 on the Russell. Getting there will be an “end of year gift” for everybody looking where to get long. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 909.00-910.00 1230.00-1232.00 496.50-498.00
Resistance 3 899.00-900.50 1223.00-1224.00 493.30-493.90
Resistance 2 894.00-895.50 1212.50-1215.00 488.70-490.00
Resistance 1 890.00-891.00 1208.00-1209.00 485.30-486.90
PIVOT 882.00 1196.50 478.50
Support 1 886.00-884.00 1203.00-1201.00 482.00-480.30
Support 2 882.00-879.75 1196.00-1194.00 477.10-476.20
Support 3 875.00-874.00 1186.00-1184.00 473.00-471.80
Support 4 866.00-865.00 1178.00-1176.00 466.20-465.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
921.76 1260.99 514.02
916.99 1253.26 509.78
909.25 1240.75 502.90
901.51 1228.24 496.02
896.74 1220.51 491.78
889.00 1208.00 484.90
881.26 1195.49 478.02
878.88 1191.63 475.90
876.49 1187.76 473.78
868.75 1175.25 466.90
861.01 1162.74 460.02
856.24 1155.01 455.78
848.50 1142.50 448.90
840.76 1129.99 442.02
835.99 1122.26 437.78
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 898.75 1223.50 493.30
AS DAILY LOW 878.50 1190.50 475.30
S&P NASDAQ RUSSELL
Resistance 4 909.00-910.00 1230.00-1232.00 496.50-498.00
Resistance 3 899.00-900.50 1223.00-1224.00 493.30-493.90
Resistance 2 894.00-895.50 1212.50-1215.00 488.70-490.00
Resistance 1 890.00-891.00 1208.00-1209.00 485.30-486.90
PIVOT 882.00 1196.50 478.50
Support 1 886.00-884.00 1203.00-1201.00 482.00-480.30
Support 2 882.00-879.75 1196.00-1194.00 477.10-476.20
Support 3 875.00-874.00 1186.00-1184.00 473.00-471.80
Support 4 866.00-865.00 1178.00-1176.00 466.20-465.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
921.76 1260.99 514.02
916.99 1253.26 509.78
909.25 1240.75 502.90
901.51 1228.24 496.02
896.74 1220.51 491.78
889.00 1208.00 484.90
881.26 1195.49 478.02
878.88 1191.63 475.90
876.49 1187.76 473.78
868.75 1175.25 466.90
861.01 1162.74 460.02
856.24 1155.01 455.78
848.50 1142.50 448.90
840.76 1129.99 442.02
835.99 1122.26 437.78
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 898.75 1223.50 493.30
AS DAILY LOW 878.50 1190.50 475.30
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