Daily Trading Advisory
DAILY TRADING ADVISORY 18-August-2008
NY Empire State Index and industrial Production up, Michigan Sentiment lower than expected, lower crude oil prices and a strong dollar give way to a quite session with a mixed close.
WEEKLY PIVOTS FOR WEEK ENDING 22-August-2008
R3 1356.25
R2 1334.75
R1 1310.50
PP 1296.00
S1 1278.25
S2 1257.00
S3 1239.50
ECONOMIC DATA
None
WEEKLY RECAP
Markets managed to hold their recent gains as crude oil prices continue to fall while traders keep buying the US dollar. We started the week with all the indexes trading higher and reaching new highs for the last month. After a flat opening and despite tighten credit standards the indexes rallied strong as non economic data was released. For the day the E-mini SP added 12.75 points and closed at 1305.00 after making a high at 1310.25, the E-mini Nasdaq 19.00 points and the Russell had a huge rally gaining 18.80 points clo9sing at 750.40. The Dow was not the exception advancing 48 points reaching 11782. Tuesday, the indexes gave back their previous session gains as weakness on the financial sectors kept the markets under pressure during all the session. JP Morgan reported another $1.5 billion loss and an independent report said that one third of new home owners owe more money than their houses is worth. Despite the early sell off, the indexes were able recover part of their early losses. For the session, the SP lost 13.50 points finishing the session at 1291.50, the E-mini Nasdaq closed almost unchanged at 1944.75 and the E-mini Russell lost 3.40 points ending the session at 747.00. The big looser was the Dow closing 139 points lower at 11642. Weakness continued during Wednesday’s session as Retail Sales for the month of July came out worst than expected. Business Inventories were higher signaling less consumption. Crude oil inventories came out surprisingly lower than expected and additional concerns on the financial sectors kept the indexes under pressure during all the session but a mid-day rally pared some of the losses. The SP lost 7.00 points closing at 1284.50, the Nasdaq lost 3.25 points at 1941.50 and the Russell finished almost unchanged at 747.20. The Dow posted another negative session closing at 11532, minus 109 points. A lower opening for Thursday’s session founded strong support just above the previous session lows and despite a huge increase in the Consumer price Index, the markets were able to close higher. The weekly jobless initial benefit claims showed a feeble recovery and crude oil sold off strongly as fears of additional weakness on the US economy kept demand expectations lower. Wal-Mart reported better than expected earnings boosting the retail sector. For the day, the E-mini SP closed higher by 9.25 points at 1293.75, the Nasdaq, that leaded the intraday recovery rally was up 24.25 points ending the session at 1965.75 and the Russell closed near the recent highs at 755.00 with a 7.80 points gain. The Dow finished also higher at 11615 adding 82 points. Friday’s session was a quite one as the indexes traded most of the session in a narrow range. The economic reports showed an increase for the NY Empire State Index and Industrial Production was up by .2%. The Michigan sentiment index which measures consumer confidence improved less than expected as fears of recession still weighted on consumer’s minds. Bond insurers AMBAC and MBIA kept their AA rating by S&P and were removed from the CreditWatch negative list. Despite the August option expiration the lack of volatility was present during all the session. Commodities continued to fall despite a late bounced on the crude oil and the US dollar pushed higher. For the day, the SP was higher 6.00 points gain at 1299.75, the E-mini Nasdaq settled unchanged at 1965.50 and the Russell closed the day at 754.70. The Dow ended higher by 43 points at 11659.
FRIDAY’S MARKETS
A quite session for the US equity markets. After a flat opening well below the nightly highs, the E-mini SP rallied to 1302.50 where it ran out of steam as the Nasdaq and Russell lost their upside momentum. The SP sold off testing levels just above our pivot point making a low at 1291.00. After holding the first hour lows, the indexes rallied once more with the SP reaching 1301.50. The index pulled back once to 1297.50, bounced to 1301.75 where the double top held the short covering rally. The dwindling Nasdaq and Russell kept the highs intact and the markets traded in a sideways patter for most of the session with the SP moving between the 1294.00 and 1298.00 areas. Two hours before the close with the E-mini Nasdaq making new marginal lows at 1952.50 and the Russell moving lower, the E-mini SP tested once more the 1294.00 area, bounced back up to 1297.50, pulled back to 1296.00, bounced to 1299.25, tested once more the support area at 1296.00 and bounced into the close. The SP ended the session with a 6.00 points gain at 1299.75, the E-mini Nasdaq settled unchanged at 1965.50 and the Russell closed the day at 754.70. The Dow ended higher by 43 points at 11659.
MARKET COMMENTARY AND OUTLOOK
Last Friday I wrote:” We came into the trading session expecting more sideways trading between the recent lows and highs as the indexes digest the last explosive rally, and despite that the economic news did not justify a positive session, the indexes reacted to the lower boundary trend line holding the selling pressure. The markets continue to consolidate and we should consider that they will continue to do so as the rallies continue to get sold and the sell offs keep showing buying interest. The SP and Dow continues to build an upward slopping channel that once it gets broken to the downside it could result in a huge sell off. The Nasdaq looks like toping, but we can not exclude the possibilities of another leg up that push that index to the 2050 level carrying the momentum to the SP and testing the 1320.00-1330.00 area. Of curse, I don’t expect this to happen during today’s session, but you never know, we have the August option expiration and a few economic reports that should add volatility to the trading session. So for today, selling the rallies once they stall and buying the pullbacks should be the best scenario as option players should try to play both sides of the markets but I will follow closely the E-mini Nasdaq as a push higher on that index could result in another short covering rally for the other indexes.”
We came into Friday’s session looking for the last two day consolidation to continue despite the August option expiration where selling the rallies and buying the pullbacks was the way to go, and we were correct, but additionally we saw a narrow range trading session that will have to get a breakout if not today, during tomorrow session. The way SP has been posting higher lows with support coming in at very high levels, call for another leg in this rally that should propel prices up at least to the 1320.00 level. However if the index fails to move higher and last week 1310.25 area is not exceeded, then probably this move is already exhausted. Take into account that this struggling upside move usually gets resolved to the upside but if we don’t see a strong breakout during the next 48 hours, then the lower trend line will get broken with a wide range day that once if breaks below 1274.00 last week low could get accelerated to the downside.
The Dow keeps consolidating and as the SP’s looks ready to break higher but the upward channel could also get re4solved to the downside, in this index keep a close eye on last Thursday highs around 11730 as a signal for an upside breakout that could lead this index the 12000-12300 areas, only trading below 11435 will indicate that the rally is over.
So, for today’s trading session, we will expect to see a breakout above or below last Friday’s high and low as a signal for early market direction, following closely the 1291.00 level on the SP for downside direction and 1976.00 on the NQ for market strength.
TODAY’S SESSION
There is resistance just above Friday’s highs at 1302.00-1303.00 on the E-mini SP, 1970.00-1972.00 on the E-mini Nasdaq and 755.00-756.90 on the E-mini Russell. A test of those highs, early in the morning, that fails to break higher will indicate a pullback to the 1291.00 area on the SP’s, but if the markets are strong, the next hurdles are at 1306.25-1307.50 on the SP, 1977.50-1979.00 on the Nasdaq and 759.70-760.80 on the Russell. If the indexes trade at these levels and hold a pullback to the previous resistance levels, then odds are for a strong breakout that should boost the markets once the 1309.50-1310.50 areas on the SP,1788.75-1789.75 on the Nasdaq and 763.90-764.70 on the Russell get crushed.
There is support at 1297.50-1296.50 on the E-mini SP, 1960.75-1958.50 on the Nasdaq and 752.80-751.40 on the E-mini Russell. Trading below those levels will drive the indexes to test the KEY intraday support at 1293.00-1292.00 on the SP, 1953.75-1954.00 on the Nasdaq and 749.00-748.30 on the Russell. If the SP can hold this support levels, and trade back above the 1295.00-1296.00 area, look top get long with tight stops, but if those levels can not hold, then the trend could be rolling down and bring the indexes to test lower levels at 1287.00-1285.50 on the SP, 1950.00-1948.50 on the Nasdaq and 745.80-748.30 on the Russell, where buyers should enter strong, if that not happen, the longs will be pulling back their bids, and a downside session may be seen. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 1316.00-1317.50 1997.50-2000.50 769.00-770.50
Resistance 3 1309.50-1310.50 1988.75-1989.75 763.90-764.70
Resistance 2 1306.25-1307.50 1977.50-1979.00 759.70-760.80
Resistance 1 1302.00-1303.00 1970.00-1972.00 755.00-756.90
PIVOT 1297.50 1965.00 754.90
Support 1 1297.50-1296.50 1960.75-1958.50 752.80-751.40
Support 2 1293.00-1292.00 1953.75-1954.00 749.00-748.30
Support 3 1287.00-1285.50 1950.00-1948.50 745.80-744.70
Support 4 1280.00-1278.50 1940.00-1938.75 742.00-741.20
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
1321.92 2017.30 793.39
1319.08 2011.45 789.11
1314.50 2002.00 782.20
1309.92 1992.55 775.29
1307.08 1986.70 771.01
1302.50 1977.25 764.10
1297.92 1967.80 757.19
1296.50 1964.88 755.05
1295.08 1961.95 752.91
1290.50 1952.50 746.00
1285.92 1943.05 739.09
1283.08 1937.20 734.81
1278.50 1927.75 727.90
1273.92 1918.30 720.99
1271.08 1912.45 716.71
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 1307.00 1971.25 759.40
AS DAILY LOW 1295.00 1946.75 741.30
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
DAILY TRADING ADVISORY 18-August-2008
NY Empire State Index and industrial Production up, Michigan Sentiment lower than expected, lower crude oil prices and a strong dollar give way to a quite session with a mixed close.
WEEKLY PIVOTS FOR WEEK ENDING 22-August-2008
R3 1356.25
R2 1334.75
R1 1310.50
PP 1296.00
S1 1278.25
S2 1257.00
S3 1239.50
ECONOMIC DATA
None
WEEKLY RECAP
Markets managed to hold their recent gains as crude oil prices continue to fall while traders keep buying the US dollar. We started the week with all the indexes trading higher and reaching new highs for the last month. After a flat opening and despite tighten credit standards the indexes rallied strong as non economic data was released. For the day the E-mini SP added 12.75 points and closed at 1305.00 after making a high at 1310.25, the E-mini Nasdaq 19.00 points and the Russell had a huge rally gaining 18.80 points clo9sing at 750.40. The Dow was not the exception advancing 48 points reaching 11782. Tuesday, the indexes gave back their previous session gains as weakness on the financial sectors kept the markets under pressure during all the session. JP Morgan reported another $1.5 billion loss and an independent report said that one third of new home owners owe more money than their houses is worth. Despite the early sell off, the indexes were able recover part of their early losses. For the session, the SP lost 13.50 points finishing the session at 1291.50, the E-mini Nasdaq closed almost unchanged at 1944.75 and the E-mini Russell lost 3.40 points ending the session at 747.00. The big looser was the Dow closing 139 points lower at 11642. Weakness continued during Wednesday’s session as Retail Sales for the month of July came out worst than expected. Business Inventories were higher signaling less consumption. Crude oil inventories came out surprisingly lower than expected and additional concerns on the financial sectors kept the indexes under pressure during all the session but a mid-day rally pared some of the losses. The SP lost 7.00 points closing at 1284.50, the Nasdaq lost 3.25 points at 1941.50 and the Russell finished almost unchanged at 747.20. The Dow posted another negative session closing at 11532, minus 109 points. A lower opening for Thursday’s session founded strong support just above the previous session lows and despite a huge increase in the Consumer price Index, the markets were able to close higher. The weekly jobless initial benefit claims showed a feeble recovery and crude oil sold off strongly as fears of additional weakness on the US economy kept demand expectations lower. Wal-Mart reported better than expected earnings boosting the retail sector. For the day, the E-mini SP closed higher by 9.25 points at 1293.75, the Nasdaq, that leaded the intraday recovery rally was up 24.25 points ending the session at 1965.75 and the Russell closed near the recent highs at 755.00 with a 7.80 points gain. The Dow finished also higher at 11615 adding 82 points. Friday’s session was a quite one as the indexes traded most of the session in a narrow range. The economic reports showed an increase for the NY Empire State Index and Industrial Production was up by .2%. The Michigan sentiment index which measures consumer confidence improved less than expected as fears of recession still weighted on consumer’s minds. Bond insurers AMBAC and MBIA kept their AA rating by S&P and were removed from the CreditWatch negative list. Despite the August option expiration the lack of volatility was present during all the session. Commodities continued to fall despite a late bounced on the crude oil and the US dollar pushed higher. For the day, the SP was higher 6.00 points gain at 1299.75, the E-mini Nasdaq settled unchanged at 1965.50 and the Russell closed the day at 754.70. The Dow ended higher by 43 points at 11659.
FRIDAY’S MARKETS
A quite session for the US equity markets. After a flat opening well below the nightly highs, the E-mini SP rallied to 1302.50 where it ran out of steam as the Nasdaq and Russell lost their upside momentum. The SP sold off testing levels just above our pivot point making a low at 1291.00. After holding the first hour lows, the indexes rallied once more with the SP reaching 1301.50. The index pulled back once to 1297.50, bounced to 1301.75 where the double top held the short covering rally. The dwindling Nasdaq and Russell kept the highs intact and the markets traded in a sideways patter for most of the session with the SP moving between the 1294.00 and 1298.00 areas. Two hours before the close with the E-mini Nasdaq making new marginal lows at 1952.50 and the Russell moving lower, the E-mini SP tested once more the 1294.00 area, bounced back up to 1297.50, pulled back to 1296.00, bounced to 1299.25, tested once more the support area at 1296.00 and bounced into the close. The SP ended the session with a 6.00 points gain at 1299.75, the E-mini Nasdaq settled unchanged at 1965.50 and the Russell closed the day at 754.70. The Dow ended higher by 43 points at 11659.
MARKET COMMENTARY AND OUTLOOK
Last Friday I wrote:” We came into the trading session expecting more sideways trading between the recent lows and highs as the indexes digest the last explosive rally, and despite that the economic news did not justify a positive session, the indexes reacted to the lower boundary trend line holding the selling pressure. The markets continue to consolidate and we should consider that they will continue to do so as the rallies continue to get sold and the sell offs keep showing buying interest. The SP and Dow continues to build an upward slopping channel that once it gets broken to the downside it could result in a huge sell off. The Nasdaq looks like toping, but we can not exclude the possibilities of another leg up that push that index to the 2050 level carrying the momentum to the SP and testing the 1320.00-1330.00 area. Of curse, I don’t expect this to happen during today’s session, but you never know, we have the August option expiration and a few economic reports that should add volatility to the trading session. So for today, selling the rallies once they stall and buying the pullbacks should be the best scenario as option players should try to play both sides of the markets but I will follow closely the E-mini Nasdaq as a push higher on that index could result in another short covering rally for the other indexes.”
We came into Friday’s session looking for the last two day consolidation to continue despite the August option expiration where selling the rallies and buying the pullbacks was the way to go, and we were correct, but additionally we saw a narrow range trading session that will have to get a breakout if not today, during tomorrow session. The way SP has been posting higher lows with support coming in at very high levels, call for another leg in this rally that should propel prices up at least to the 1320.00 level. However if the index fails to move higher and last week 1310.25 area is not exceeded, then probably this move is already exhausted. Take into account that this struggling upside move usually gets resolved to the upside but if we don’t see a strong breakout during the next 48 hours, then the lower trend line will get broken with a wide range day that once if breaks below 1274.00 last week low could get accelerated to the downside.
The Dow keeps consolidating and as the SP’s looks ready to break higher but the upward channel could also get re4solved to the downside, in this index keep a close eye on last Thursday highs around 11730 as a signal for an upside breakout that could lead this index the 12000-12300 areas, only trading below 11435 will indicate that the rally is over.
So, for today’s trading session, we will expect to see a breakout above or below last Friday’s high and low as a signal for early market direction, following closely the 1291.00 level on the SP for downside direction and 1976.00 on the NQ for market strength.
TODAY’S SESSION
There is resistance just above Friday’s highs at 1302.00-1303.00 on the E-mini SP, 1970.00-1972.00 on the E-mini Nasdaq and 755.00-756.90 on the E-mini Russell. A test of those highs, early in the morning, that fails to break higher will indicate a pullback to the 1291.00 area on the SP’s, but if the markets are strong, the next hurdles are at 1306.25-1307.50 on the SP, 1977.50-1979.00 on the Nasdaq and 759.70-760.80 on the Russell. If the indexes trade at these levels and hold a pullback to the previous resistance levels, then odds are for a strong breakout that should boost the markets once the 1309.50-1310.50 areas on the SP,1788.75-1789.75 on the Nasdaq and 763.90-764.70 on the Russell get crushed.
There is support at 1297.50-1296.50 on the E-mini SP, 1960.75-1958.50 on the Nasdaq and 752.80-751.40 on the E-mini Russell. Trading below those levels will drive the indexes to test the KEY intraday support at 1293.00-1292.00 on the SP, 1953.75-1954.00 on the Nasdaq and 749.00-748.30 on the Russell. If the SP can hold this support levels, and trade back above the 1295.00-1296.00 area, look top get long with tight stops, but if those levels can not hold, then the trend could be rolling down and bring the indexes to test lower levels at 1287.00-1285.50 on the SP, 1950.00-1948.50 on the Nasdaq and 745.80-748.30 on the Russell, where buyers should enter strong, if that not happen, the longs will be pulling back their bids, and a downside session may be seen. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 1316.00-1317.50 1997.50-2000.50 769.00-770.50
Resistance 3 1309.50-1310.50 1988.75-1989.75 763.90-764.70
Resistance 2 1306.25-1307.50 1977.50-1979.00 759.70-760.80
Resistance 1 1302.00-1303.00 1970.00-1972.00 755.00-756.90
PIVOT 1297.50 1965.00 754.90
Support 1 1297.50-1296.50 1960.75-1958.50 752.80-751.40
Support 2 1293.00-1292.00 1953.75-1954.00 749.00-748.30
Support 3 1287.00-1285.50 1950.00-1948.50 745.80-744.70
Support 4 1280.00-1278.50 1940.00-1938.75 742.00-741.20
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
1321.92 2017.30 793.39
1319.08 2011.45 789.11
1314.50 2002.00 782.20
1309.92 1992.55 775.29
1307.08 1986.70 771.01
1302.50 1977.25 764.10
1297.92 1967.80 757.19
1296.50 1964.88 755.05
1295.08 1961.95 752.91
1290.50 1952.50 746.00
1285.92 1943.05 739.09
1283.08 1937.20 734.81
1278.50 1927.75 727.90
1273.92 1918.30 720.99
1271.08 1912.45 716.71
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 1307.00 1971.25 759.40
AS DAILY LOW 1295.00 1946.75 741.30
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