DAILY TRADING ADVISORY 03-December-2008
Automakers begging for help, GE expecting to hit low-end of Q4 outlook and Goldman’s fear of another $2 billion in loses gave way to huge volatility during yesterday’s trading session.
ECONOMIC DATA
8:15 AM ADP Employment
8:30 AM Productivity-revision
10:00 AM ISM Services
2:00 PM Fed’s Beige Book
YESTERDAY’S MARKET
After testing Monday’s lows during the Globex session, markets opened higher. The E-mini SP started the session at 829.00 and pulled back to 817.75 where it found support. The early sell off held and the indexes started to trade up with the SP reaching 825.50. Another pullback printed a higher low on the intraday charts and the index pushed all the way up to the 830.00 level, after a few minutes it continued its way higher to 836.00 from where it pulled back once more a few points just to get bought and move near the 840.00 level. As the Nasdaq failed to break above the 1124.00 area, the SP pulled back to 831.75 and resumed its uptrend reaching 841.25 where a double bottom held that market just below our 842.00 pivot point. The E-mini SP pulled back once more but the pattern of trading continue to play out as buyers appeared once more, as the Nasdaq broke above the 1124.00 level, the SP reached 848.00 before pulling back to 841.75. Another rally attempt failed to trade at new highs and the SP pulled back strongly reaching 822.50 from where it bounced to 826.00 just to get sold to the 818.00 mark. As the low held, the index rebounded to 832.00, pulled back 10 full points and rally once more reaching 844.00 during the last hour of the session. A modest pullback held the key 838.50 area and the SP pushed up near the 846.00 area from where the mid-day sells off started. Finally the SP traded above it but failed to print a new intraday high at 848.00. The SP pulled back once more to the 838.50 level and rallied testing once more 846.00 from where it sold off once more to 832.00 and bounced back strongly into the end of the session making even new highs for the day. The SP ended higher by 33.25 points at 849.00, the Nasdaq settled at 1133.00 ending up 38.50 points and the Russell finished the session at 440.90 with a 22.70 points gain. The Dow closed the session at 8419 with a 270 points gain.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” After yesterday’s huge decline, we could see some consolidation during today’s trading session, however, there is a lot of work to be done in order to place the indexes in a neutral position. It seems that the 832.00 area on the SP and 8400 on the Dow will have to get exceeded and hold for the close for the markets to move higher, until- unless that happens, the bears are in complete control. This decline has formed lower highs on the daily charts and leaves the markets on a weak position and ready for another sharp decline. Yesterday’s declines with low volumes are not the best indication that the strong downtrend has resumed, but the extension of the decline really disappoint all of us that were expecting a few sessions where the indexes could consolidate the last week gains and then go for new highs. The only positive things that I can see on the daily charts is an early sell off that holds the 800 area on the SP and then slowly, starts to move higher, or a successful test of yesterday’s late lows and the a run to have a higher close.”
Markets have formed a clear triangle pattern and probably will continue to build them for a few more days, but once they get broken a huge move could be in the cards, that pattern is defined at the 880.00 upper boundary and 821.50 on the lower angle, and they coincide with the 8820 and 8180 levels on the Dow. Yesterday’s 818.00 low on the SP will have to hold any selling pressure, I assume that if that level gets violated, markets could be ready for a test of the yearly lows and even lower, however, yesterday’s action showed strong support near the Monday’s lows.
On the other side of the coin, if we take in consideration the extension of Monday’s huge sell off, it seems that yesterday’s rally, and a possible continuation of it during the first half of today’s trading session, may be a great selling opportunity, on the early going, all the time that yesterday’s highs remain intact, and for the rest of the session and the week, all the time that the 880.00 and 8800 levels for the SP and Dow respectively hold. The other indication for the downtrend to resume will be the lack of follow through to yesterday’s late rally.
On one of my late updates during yesterday’s trading session, I mentioned the problem that lower crude oil prices represent for the markets and in particular for the Dow, it is not that I am expecting a new bull run on the commodities, that is out of question, it simple won’t happen, but lower crude oil will mean lower stock prices, so my thinking is that a rally on the stock indexes should be joined also by crude oil and gold, I probably will look for another sharp sell off on the equity markets if the crude oil does not manages to get back above the $50 per barrel.
In conclusion, yesterday’s consolidating session which managed to post a double bottom on the SP has not given yet evidence of that market trading down once more, but I will be very cautions once that index starts to trade below 832.00, and obviously I won’t run to pick a bottom if yesterday’s 818.00 intraday low gets broken.
For today’s trading session, and early pullback that holds 833.00-831.00 on the SP could result in a 20 points rally, so if the market gets there and hold, be ready to be a buyer with ultra tight stops; remember that later on the session we’ll get the Fed’s Beige book, that could result in a huge reversal of any trading pattern, tight your belts on, as volatility should continue.
.
TODAY’S SESSION
Initial resistance is at 852.50-853.00 on the SP, 1137.00-1138.00 on the Nasdaq and 443.30-444.50 on the Russell. Those should offer good resistance the first time they get tested, but if they don’t hold, loof for some small short covering that pushes the indexes up to their next levels at 856.00-857.00 on the SP, 1143.00-1145.50 on the Nasdaq and 448.00-449.20 on the Russell. Breaking above them will indicate a testv of the pivotal 860.00-861.50 on the SP, 1150.00-1151.00 on the Nasdaq and 453.80-455.10 on the Russell. Only breaking above them will indicate that the trend is changing, otherwise back and forth action between Monday’s lows and those levels could be seen.
There is some support at 845.00-844.00 on the SP, 1128.00-1127.00 on the Nasdaq and 438.50-437.00 on the Russell. If yesterday’s late rally will get reversed those should easily fail pushing the markets down to 841.00-839.50 on the SP, 1122.00-1120.50 on the Nasdaq and 433.80-432.90 on the Russell. Trading below them could result in a quick fall to 833.00-831.00 on the SP, 1111.00-1110.00 on the Nasdaq and 429.00-428.20 on the Russell. These levels should be considered as critical, if those can not hold the selling pressure, markets could be ready for another sharp sell off. 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
Automakers begging for help, GE expecting to hit low-end of Q4 outlook and Goldman’s fear of another $2 billion in loses gave way to huge volatility during yesterday’s trading session.
ECONOMIC DATA
8:15 AM ADP Employment
8:30 AM Productivity-revision
10:00 AM ISM Services
2:00 PM Fed’s Beige Book
YESTERDAY’S MARKET
After testing Monday’s lows during the Globex session, markets opened higher. The E-mini SP started the session at 829.00 and pulled back to 817.75 where it found support. The early sell off held and the indexes started to trade up with the SP reaching 825.50. Another pullback printed a higher low on the intraday charts and the index pushed all the way up to the 830.00 level, after a few minutes it continued its way higher to 836.00 from where it pulled back once more a few points just to get bought and move near the 840.00 level. As the Nasdaq failed to break above the 1124.00 area, the SP pulled back to 831.75 and resumed its uptrend reaching 841.25 where a double bottom held that market just below our 842.00 pivot point. The E-mini SP pulled back once more but the pattern of trading continue to play out as buyers appeared once more, as the Nasdaq broke above the 1124.00 level, the SP reached 848.00 before pulling back to 841.75. Another rally attempt failed to trade at new highs and the SP pulled back strongly reaching 822.50 from where it bounced to 826.00 just to get sold to the 818.00 mark. As the low held, the index rebounded to 832.00, pulled back 10 full points and rally once more reaching 844.00 during the last hour of the session. A modest pullback held the key 838.50 area and the SP pushed up near the 846.00 area from where the mid-day sells off started. Finally the SP traded above it but failed to print a new intraday high at 848.00. The SP pulled back once more to the 838.50 level and rallied testing once more 846.00 from where it sold off once more to 832.00 and bounced back strongly into the end of the session making even new highs for the day. The SP ended higher by 33.25 points at 849.00, the Nasdaq settled at 1133.00 ending up 38.50 points and the Russell finished the session at 440.90 with a 22.70 points gain. The Dow closed the session at 8419 with a 270 points gain.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” After yesterday’s huge decline, we could see some consolidation during today’s trading session, however, there is a lot of work to be done in order to place the indexes in a neutral position. It seems that the 832.00 area on the SP and 8400 on the Dow will have to get exceeded and hold for the close for the markets to move higher, until- unless that happens, the bears are in complete control. This decline has formed lower highs on the daily charts and leaves the markets on a weak position and ready for another sharp decline. Yesterday’s declines with low volumes are not the best indication that the strong downtrend has resumed, but the extension of the decline really disappoint all of us that were expecting a few sessions where the indexes could consolidate the last week gains and then go for new highs. The only positive things that I can see on the daily charts is an early sell off that holds the 800 area on the SP and then slowly, starts to move higher, or a successful test of yesterday’s late lows and the a run to have a higher close.”
Markets have formed a clear triangle pattern and probably will continue to build them for a few more days, but once they get broken a huge move could be in the cards, that pattern is defined at the 880.00 upper boundary and 821.50 on the lower angle, and they coincide with the 8820 and 8180 levels on the Dow. Yesterday’s 818.00 low on the SP will have to hold any selling pressure, I assume that if that level gets violated, markets could be ready for a test of the yearly lows and even lower, however, yesterday’s action showed strong support near the Monday’s lows.
On the other side of the coin, if we take in consideration the extension of Monday’s huge sell off, it seems that yesterday’s rally, and a possible continuation of it during the first half of today’s trading session, may be a great selling opportunity, on the early going, all the time that yesterday’s highs remain intact, and for the rest of the session and the week, all the time that the 880.00 and 8800 levels for the SP and Dow respectively hold. The other indication for the downtrend to resume will be the lack of follow through to yesterday’s late rally.
On one of my late updates during yesterday’s trading session, I mentioned the problem that lower crude oil prices represent for the markets and in particular for the Dow, it is not that I am expecting a new bull run on the commodities, that is out of question, it simple won’t happen, but lower crude oil will mean lower stock prices, so my thinking is that a rally on the stock indexes should be joined also by crude oil and gold, I probably will look for another sharp sell off on the equity markets if the crude oil does not manages to get back above the $50 per barrel.
In conclusion, yesterday’s consolidating session which managed to post a double bottom on the SP has not given yet evidence of that market trading down once more, but I will be very cautions once that index starts to trade below 832.00, and obviously I won’t run to pick a bottom if yesterday’s 818.00 intraday low gets broken.
For today’s trading session, and early pullback that holds 833.00-831.00 on the SP could result in a 20 points rally, so if the market gets there and hold, be ready to be a buyer with ultra tight stops; remember that later on the session we’ll get the Fed’s Beige book, that could result in a huge reversal of any trading pattern, tight your belts on, as volatility should continue.
.
TODAY’S SESSION
Initial resistance is at 852.50-853.00 on the SP, 1137.00-1138.00 on the Nasdaq and 443.30-444.50 on the Russell. Those should offer good resistance the first time they get tested, but if they don’t hold, loof for some small short covering that pushes the indexes up to their next levels at 856.00-857.00 on the SP, 1143.00-1145.50 on the Nasdaq and 448.00-449.20 on the Russell. Breaking above them will indicate a testv of the pivotal 860.00-861.50 on the SP, 1150.00-1151.00 on the Nasdaq and 453.80-455.10 on the Russell. Only breaking above them will indicate that the trend is changing, otherwise back and forth action between Monday’s lows and those levels could be seen.
There is some support at 845.00-844.00 on the SP, 1128.00-1127.00 on the Nasdaq and 438.50-437.00 on the Russell. If yesterday’s late rally will get reversed those should easily fail pushing the markets down to 841.00-839.50 on the SP, 1122.00-1120.50 on the Nasdaq and 433.80-432.90 on the Russell. Trading below them could result in a quick fall to 833.00-831.00 on the SP, 1111.00-1110.00 on the Nasdaq and 429.00-428.20 on the Russell. These levels should be considered as critical, if those can not hold the selling pressure, markets could be ready for another sharp sell off. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 868.00-869.50 1159.00-1160.50 457.90-459.60
Resistance 3 860.00-861.50 1150.00-1151.00 453.80-455.10
Resistance 2 856.00-857.00 1143.00-1145.50 448.00-449.20
Resistance 1 852.50-853.00 1137.00-1138.00 443.30-444.50
PIVOT 837.50 1119.50 434.00
Support 1 845.00-844.00 1128.00-1127.00 438.50-437.00
Support 2 841.00-839.50 1122.00-1120.50 433.80-432.90
Support 3 833.00-831.00 1111.00-1110.00 429.00-428.20
Support 4 826.00-824.50 1103.00-1101.50 424.50-423.40
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
911.83 1211.24 485.24
902.92 1200.26 479.16
888.50 1182.50 469.30
874.08 1164.74 459.44
865.17 1153.76 453.36
850.75 1136.00 443.50
836.33 1118.24 433.64
831.88 1112.75 430.60
827.42 1107.26 427.56
813.00 1089.50 417.70
798.58 1071.74 407.84
789.67 1060.76 401.76
775.25 1043.00 391.90
760.83 1025.24 382.04
751.92 1014.26 375.96
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 868.75 1157.75 455.10
AS DAILY LOW 831.00 1111.25 429.20
S&P NASDAQ RUSSELL
Resistance 4 868.00-869.50 1159.00-1160.50 457.90-459.60
Resistance 3 860.00-861.50 1150.00-1151.00 453.80-455.10
Resistance 2 856.00-857.00 1143.00-1145.50 448.00-449.20
Resistance 1 852.50-853.00 1137.00-1138.00 443.30-444.50
PIVOT 837.50 1119.50 434.00
Support 1 845.00-844.00 1128.00-1127.00 438.50-437.00
Support 2 841.00-839.50 1122.00-1120.50 433.80-432.90
Support 3 833.00-831.00 1111.00-1110.00 429.00-428.20
Support 4 826.00-824.50 1103.00-1101.50 424.50-423.40
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
911.83 1211.24 485.24
902.92 1200.26 479.16
888.50 1182.50 469.30
874.08 1164.74 459.44
865.17 1153.76 453.36
850.75 1136.00 443.50
836.33 1118.24 433.64
831.88 1112.75 430.60
827.42 1107.26 427.56
813.00 1089.50 417.70
798.58 1071.74 407.84
789.67 1060.76 401.76
775.25 1043.00 391.90
760.83 1025.24 382.04
751.92 1014.26 375.96
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 868.75 1157.75 455.10
AS DAILY LOW 831.00 1111.25 429.20
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
