DAILY TRADING ADVISORY 09-January-2008
BoE cutting rates to its lowest in 300 years, Wal-Mart earnings to miss forecast and weekly jobless applications better than expected, 467K, Continuing claims hit 4.6 million, highest since 1982. Obama warns of lingering recession without a stimulus plan. Markets fluctuate on a low volume trading session.
.
ECONOMIC DATA
8:30 AM Average Workweek
8:30 AM Hourly Earnings
8:30 AM Nonfarm Payrolls
8:30 AM Unemployment Rate
10:00 AM Wholesale Inventories
YESTERDAY’S MARKET
After a strong negative nightly session where the SP reached 891.50, the E-mini SP opened at 898.25 from where it bounced to 900.50. The SP backed off to test our 897.00-895.00 support levels and bounced once more to test the early highs. After failing to push higher and pressed by the weakness on the Nasdaq, the SP pushed to 894.25, bounced back to 898.25 and fell to a new intraday low at 893.50. After posting the early lows, the indexes finally move up in a short covering move, the E-mini SP reached 903.75. As traders waited for the speech of President elected Obama about the economy and stimulus plan, the SP pulled back to 901.00 but immediately bounced to a new intraday high at 905.00 and backed off once more to test the 901.00 level. As the speech ended, the SP moved all the way down to 895.75 just to bounce to 899.00. As volumes slowed, the SP traded on a sideways pattern holding the lows but failing to move above the 902.00 level. Another sell off attempt traded at 894.50 but the lack of momentum avoided lower prices. As the same pattern of trading continued, the SP bounced back all the way up to 903.00, pulled back to 898.00 and with the Nasdaq trading already in positive territory and reaching new highs, the SP tested once more the 905.00 level. Another rally attempt, leaded by the Nasdaq reached 906.25 from where the SP fell to 899.00 just to bounce to a new daily high at 907.75 before the closing bell. For the session, the SP added 1.50 points closing at 906.75, the Nasdaq ended higher by 10.00 points and settled at 1249.50 and the Russell gained 2.80 points finishing the session at 499.70. The Dow lost 27 points and settled at 8742.
MARKET COMMENTARY AND OUTLOOK
Last week I wrote:” Last Tuesday’s spike above the 940.00 area has printed a short term high, which probably will be tested once more during next week. Yesterday’s weak session, where the indexes opened with a gap and never looked back, shows once more a clear rejection from the 920.00-940.00 areas in the SP and the 9000 level in the Dow Jones. These levels has acted as strong resistance for a few months, and if those markets do not trade back above them during the next few days, then the way is open for another test of the lower boundaries and support of the recent daily ranges, 850.00 on the SP and 8350 on the Dow. On the other side of the coin, yesterday’s lows, if they hold on a close, could place the markets in a strong position and give a chance for this bear market to continue at least to the 960.00 level on the SP, but, meanwhile the door is open for this correction to continue and once it gets done, the next rally will end the countertrend move around the 960.00 area or with a lower high. Remember that tomorrow will get the all important unemployment numbers, besides that, it seems that corporate earnings will be full of not so good surprises, so there is not a reason for the markets to rally before there is not more evidence of the state of the jobs situation, or before some of the earnings show something that result in a catalyst for another attempt to move higher. For today’s trading session, I don’t expect the same strong selling pressure as yesterday, after a trend session, normally we see some consolidation of the move, and the markets have already retraced a 50% from the last rally, but I do expect the indexes to fail on the rally attempts. So staying in the short side of the markets should be the way to go.”
As expected, markets consolidated the previous session movement and despite the sell off attempts, the indexes managed to hold nicely as they waited for today’s unemployment data. Yesterday’s narrow trading ranges will probably explode to one or the other side, and probably a trend session will be seen. The unemployment numbers will get released before the opening, if they are as bad as expected, but not worst, an initial or pre market sell off could hold if players continue to ignore all this bad economic data and corporate news. So yesterday’s lows are important, if the indexes can hold above them look for more range-type movement between the current lows and the 930.00 area on the SP and 9000 on the Dow, but if the lows finally get broken, markets probably will sell off today and next Monday reaching the 860.00-850.00 band that I mentioned in yesterday’s commentary. I am really surprise that the index again held up in the face of bad news, so it will be bullish if yesterday’s early sell off gives way to a rally during today’s trading session.
TODAY’S SESSION
There is resistance at 908.25-909.50 on the SP, 1252.00-1254.00 on the Nasdaq and 500.70-501.80 on the Russell, if they get exceeded look for additional resistance at 912.00-913.00 on the SP, 1258.50-1260.50 on the Nasdaq and 503.00-503.90 on the Russell. If the markets break above them the test of the short term key resistance levels at 916.50-918.00 on the SP, 1266.00-1268.00 on the Nasdaq and 506.50-508.00 on the Russell will surely place the indexes in a position where another upside breakout could be seen.
Initial support at 905.00-903.00 on the SP, 1246.00-1244.00 on the NQ and 499.00-497.80 on the Russell, if those can not hold, look for a test of 900.00-898.50 on the SP, 1240.00-1238.00 on the Nasdaq and 495.60-495.10 on the Russell. If those are the lows look for a strong rally that at least will be able to reach our third resistance levels, but if those fail, look for a test of yesterday’s intraday lows at 895.00-894.00 on the SP, 1232.00-1230.50 on the Nasdaq and 492.40-491.50 on the Russell. A false break down there that test yesterday’s 891.50 Globex low on the SP and holds, will be also a positive sign that could result in a close around the 900.00 area, but surely will keep bulls very nervous.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
BoE cutting rates to its lowest in 300 years, Wal-Mart earnings to miss forecast and weekly jobless applications better than expected, 467K, Continuing claims hit 4.6 million, highest since 1982. Obama warns of lingering recession without a stimulus plan. Markets fluctuate on a low volume trading session.
.
ECONOMIC DATA
8:30 AM Average Workweek
8:30 AM Hourly Earnings
8:30 AM Nonfarm Payrolls
8:30 AM Unemployment Rate
10:00 AM Wholesale Inventories
YESTERDAY’S MARKET
After a strong negative nightly session where the SP reached 891.50, the E-mini SP opened at 898.25 from where it bounced to 900.50. The SP backed off to test our 897.00-895.00 support levels and bounced once more to test the early highs. After failing to push higher and pressed by the weakness on the Nasdaq, the SP pushed to 894.25, bounced back to 898.25 and fell to a new intraday low at 893.50. After posting the early lows, the indexes finally move up in a short covering move, the E-mini SP reached 903.75. As traders waited for the speech of President elected Obama about the economy and stimulus plan, the SP pulled back to 901.00 but immediately bounced to a new intraday high at 905.00 and backed off once more to test the 901.00 level. As the speech ended, the SP moved all the way down to 895.75 just to bounce to 899.00. As volumes slowed, the SP traded on a sideways pattern holding the lows but failing to move above the 902.00 level. Another sell off attempt traded at 894.50 but the lack of momentum avoided lower prices. As the same pattern of trading continued, the SP bounced back all the way up to 903.00, pulled back to 898.00 and with the Nasdaq trading already in positive territory and reaching new highs, the SP tested once more the 905.00 level. Another rally attempt, leaded by the Nasdaq reached 906.25 from where the SP fell to 899.00 just to bounce to a new daily high at 907.75 before the closing bell. For the session, the SP added 1.50 points closing at 906.75, the Nasdaq ended higher by 10.00 points and settled at 1249.50 and the Russell gained 2.80 points finishing the session at 499.70. The Dow lost 27 points and settled at 8742.
MARKET COMMENTARY AND OUTLOOK
Last week I wrote:” Last Tuesday’s spike above the 940.00 area has printed a short term high, which probably will be tested once more during next week. Yesterday’s weak session, where the indexes opened with a gap and never looked back, shows once more a clear rejection from the 920.00-940.00 areas in the SP and the 9000 level in the Dow Jones. These levels has acted as strong resistance for a few months, and if those markets do not trade back above them during the next few days, then the way is open for another test of the lower boundaries and support of the recent daily ranges, 850.00 on the SP and 8350 on the Dow. On the other side of the coin, yesterday’s lows, if they hold on a close, could place the markets in a strong position and give a chance for this bear market to continue at least to the 960.00 level on the SP, but, meanwhile the door is open for this correction to continue and once it gets done, the next rally will end the countertrend move around the 960.00 area or with a lower high. Remember that tomorrow will get the all important unemployment numbers, besides that, it seems that corporate earnings will be full of not so good surprises, so there is not a reason for the markets to rally before there is not more evidence of the state of the jobs situation, or before some of the earnings show something that result in a catalyst for another attempt to move higher. For today’s trading session, I don’t expect the same strong selling pressure as yesterday, after a trend session, normally we see some consolidation of the move, and the markets have already retraced a 50% from the last rally, but I do expect the indexes to fail on the rally attempts. So staying in the short side of the markets should be the way to go.”
As expected, markets consolidated the previous session movement and despite the sell off attempts, the indexes managed to hold nicely as they waited for today’s unemployment data. Yesterday’s narrow trading ranges will probably explode to one or the other side, and probably a trend session will be seen. The unemployment numbers will get released before the opening, if they are as bad as expected, but not worst, an initial or pre market sell off could hold if players continue to ignore all this bad economic data and corporate news. So yesterday’s lows are important, if the indexes can hold above them look for more range-type movement between the current lows and the 930.00 area on the SP and 9000 on the Dow, but if the lows finally get broken, markets probably will sell off today and next Monday reaching the 860.00-850.00 band that I mentioned in yesterday’s commentary. I am really surprise that the index again held up in the face of bad news, so it will be bullish if yesterday’s early sell off gives way to a rally during today’s trading session.
TODAY’S SESSION
There is resistance at 908.25-909.50 on the SP, 1252.00-1254.00 on the Nasdaq and 500.70-501.80 on the Russell, if they get exceeded look for additional resistance at 912.00-913.00 on the SP, 1258.50-1260.50 on the Nasdaq and 503.00-503.90 on the Russell. If the markets break above them the test of the short term key resistance levels at 916.50-918.00 on the SP, 1266.00-1268.00 on the Nasdaq and 506.50-508.00 on the Russell will surely place the indexes in a position where another upside breakout could be seen.
Initial support at 905.00-903.00 on the SP, 1246.00-1244.00 on the NQ and 499.00-497.80 on the Russell, if those can not hold, look for a test of 900.00-898.50 on the SP, 1240.00-1238.00 on the Nasdaq and 495.60-495.10 on the Russell. If those are the lows look for a strong rally that at least will be able to reach our third resistance levels, but if those fail, look for a test of yesterday’s intraday lows at 895.00-894.00 on the SP, 1232.00-1230.50 on the Nasdaq and 492.40-491.50 on the Russell. A false break down there that test yesterday’s 891.50 Globex low on the SP and holds, will be also a positive sign that could result in a close around the 900.00 area, but surely will keep bulls very nervous.GOOD LUCK.
.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 924.00-925.00 1273.00-1274.00 513.10-514.50
Resistance 3 916.50-918.00 1266.00-1268.00 506.50-508.00
Resistance 2 912.00-913.00 1258.50-1260.50 503.00-503.90
Resistance 1 908.25-909.50 1252.00-1254.00 500.70-501.80
PIVOT 902.00 1241.50 496.70
Support 1 905.00-903.00 1246.00-1244.00 499.00-497.80
Support 2 900.00-898.50 1240.00-1238.00 495.60-495.10
Support 3 895.00-894.00 1232.00-1230.50 492.40-491.50
Support 4 885.00-883.00 1221.00-1218.00 486.90-485.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
934.04 1301.29 519.35
930.21 1294.21 516.65
924.00 1282.75 512.30
917.79 1271.29 507.95
913.96 1264.21 505.25
907.75 1252.75 500.90
901.54 1241.29 496.55
899.63 1237.75 495.20
897.71 1234.21 493.85
891.50 1222.75 489.50
885.29 1211.29 485.15
881.46 1204.21 482.45
875.25 1192.75 478.10
869.04 1181.29 473.75
865.21 1174.21 471.05
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 915.25 1266.00 506.00
AS DAILY LOW 899.00 1236.00 494.60
S&P NASDAQ RUSSELL
Resistance 4 924.00-925.00 1273.00-1274.00 513.10-514.50
Resistance 3 916.50-918.00 1266.00-1268.00 506.50-508.00
Resistance 2 912.00-913.00 1258.50-1260.50 503.00-503.90
Resistance 1 908.25-909.50 1252.00-1254.00 500.70-501.80
PIVOT 902.00 1241.50 496.70
Support 1 905.00-903.00 1246.00-1244.00 499.00-497.80
Support 2 900.00-898.50 1240.00-1238.00 495.60-495.10
Support 3 895.00-894.00 1232.00-1230.50 492.40-491.50
Support 4 885.00-883.00 1221.00-1218.00 486.90-485.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
934.04 1301.29 519.35
930.21 1294.21 516.65
924.00 1282.75 512.30
917.79 1271.29 507.95
913.96 1264.21 505.25
907.75 1252.75 500.90
901.54 1241.29 496.55
899.63 1237.75 495.20
897.71 1234.21 493.85
891.50 1222.75 489.50
885.29 1211.29 485.15
881.46 1204.21 482.45
875.25 1192.75 478.10
869.04 1181.29 473.75
865.21 1174.21 471.05
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 915.25 1266.00 506.00
AS DAILY LOW 899.00 1236.00 494.60
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