DAILY TRADING ADVISORY 10-December-2008
Disappointing corporate outlooks resulted in a negative session. Pending Home Sales slides another .7%
ECONOMIC DATA
10:00 AM Wholesale Inventories
10:35 AM Crude Inventories
YESTERDAY’S MARKET
After opening just below the 900.00 level, the E-mini SP tested the previous day lows at 894.00 holding the initial pullback. The index bounced back to 904.25, pulled back twice to the 896.00-895.00 levels and guided by the strength on the Nasdaq moved all the way up to 916.25, just 1 point above our resistance level. As the rally lost its steam, the E-mini SP fell to 901.75 where another short covering rally pushed the index back up to 910.00. Once more the SP retreated to the 902.00 level just to try to push higher above the previous highs, as our update called to get short below the 911.50 and unable to break higher, the SP pushed all the way down to the early 895.00 lows. A rally attempt failed on a double top at the pivotal 902.00 area and the SP made all its way down to 884.50. A quick bounce managed to test 900.00 where sellers stepped back in driving the markets down once more. The SP fell to the daily lows where good support was seen and the markets bounced back into the close. For the day, the SP lost 17.00 points and settled at 889.50, the Nasdaq gave back 15.00 points ending the session at 1217.00 and the Russell closed the session at 569.40, minus 12.10 points. The Dow lost 242 points ending the day at 8691.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” Yesterday’s action showed the follow through move and continuation rally that we were expecting, also, the commodities finally manage to bounce. The early strength seen on the markets was the first outbreak of the triangle formation that we have been following, and despite the fact that gives some confidence that a short term low has been posted, yesterday’s action saw most of the session a sideways patter, not only that, the late sell off shows that some profit taking should be seen very soon. If the futures settlement would have been at the highs, I would think that the rally from Friday’s 817.00 lows to yesterday’s levels could be exhausted and place the rally on a risk position, however, the fact that the indexes settled in the middle of their intraday range, makes me think that we should see another attempt to break higher, that at this time I consider will be a successful one as the SP may be able to get to my 940.00-960.00 objective while the Dow gets to the 9400. This expected rally, without great confidence, without big volumes and with continued bad economic reports should result in more volatile moves, but the sell offs should found support. Yesterday’s rally was joined by the crude oil, which should continue to try to move higher for a test of $50, this is positive for the stock markets. So, in conclusion, the rally may be able to get above yesterday’s highs, but some consolidation may be seen during the next two days as market digests the last huge move. For today’s trading session, expect two side actions as markets consolidate the last move, on the early going, try to get short near our first resistance level, on a lower opening wait for our second support level to get tested before you try to play a long position, if the SP does not get there, then a double bottom at yesterday’s 893.50 low could offer a good long entry with tight stops. Don’t overstay your welcome on a any good trade.”
We came into yesterday’s session looking to be an early buyer at our 893.50 area, the SP made an early low at 894.00; many traders were able to take advantage of this early set up. Than we try to short around the pivotal 908.50 but the strength on the Nasdaq took the SP all the way up to our 915.50 second resistance levels, where once the index traded below 911.50 traders sold all the rallies.
We were expecting a consolidation of the last huge rally and we considered that the SP would be able to close the open gap at 879.50, however good support was found just five points above that area. Yesterday’s pullback was something traders were expecting, and the rally should be able to continue on its way to the 940.00-960.00 levels on the SP. I am a bit disappointed that the index did not closed the gap, if that not happens today, it will happened in the future.
As there is more talking about the automakers bailout plan, the markets will continue to react to outsides news, so is highly recommended to add a stop loss order to every open position. Yesterday’s failure to break above Monday’s high on the SP and to trade above the 9000 level on the Dow, could result in another negative session, despite that the markets could be building a base for a Santa Claus rally.
If we consider that the last rally has a 100 point extension on the SP, and that the pivotal 861.00 area or a bit lower could be reached during the next couple of days, if we see additional selling pressure, that could set up my expected rally to the 940.00-960.00 area if we have a symmetrical move. So unless outside news that result in another huge short covering move pushes the markets up during today’s session, I will consider every rally as a selling opportunity, of course the SP will have to hold below the 908.50-911.50 resistance band or the rally will happen before a substantial pull back. The first sign that the markets will continue to move lower, could come from weakness on the Nasdaq, so keep a close eye on the strong support around 1200.00-1198.00, if those levels get broken the other indexes should follow the move. On the other side, if the SP manages to break above the 911.50 area and the Dow finally breaks 9000, more strength could be seen. In this scenario, another day of consolidation could also happen. Remember that traders will be concentrated in the rollover from the December to the March contracts, and that the next two sessions are full of economic reports.
For today’s trading session, a higher opening that holds below my 910.00-912.00 resistance area could result in a huge selling opportunity.
TODAY’S SESSION
There is resistance is at 893.50-895.00 on the SP, 1222.00-1223.00 on the Nasdaq and 473.50-474.90 on the Russell. If the markets open above those levels they should act as good support on an initial pullback, if they hold, look for the indexes to continue higher reaching 899.00-900.50 on the SP, 1230.00-1231.50 on the Nasdaq and 476.1`0-477.50 on the Russell. Those are pivotal, and the first sign of additional short covering that takes the SP all the way up to my 910.00-912.00 last resistance levels will be seen once the index trades above 902.75, if that happens, the only hurdles on the way will be 906.00-907.50 on the SP, 1245.00-1246.00 on the Nasdaq and 479.20-480.40 on the Russell.
There is strong support at 886.50-885.00 on the SP, 1210.00-1208.00 on the Nasdaq and 466.00-465.30 on the Russell. If the markets get there look for them to hold the first time they get tested, if they fail, the open gap will act as a magnet as the indexes reach 880.00-879.00 on the SP, 1202.00-1201.00 on the Nasdaq and 462.10-461.20 on the Russell. Those levels are critical, in particular for the Nasdaq, trading below them could accelerate the profit taking move pushing the markets down to 874.00-872.00 on the SP, 1188.00-1186.00 on the Nasdaq and 457.90-456.00 on the Russell. 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
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Rollover day is on Thursday 11 December 2008
Disappointing corporate outlooks resulted in a negative session. Pending Home Sales slides another .7%
ECONOMIC DATA
10:00 AM Wholesale Inventories
10:35 AM Crude Inventories
YESTERDAY’S MARKET
After opening just below the 900.00 level, the E-mini SP tested the previous day lows at 894.00 holding the initial pullback. The index bounced back to 904.25, pulled back twice to the 896.00-895.00 levels and guided by the strength on the Nasdaq moved all the way up to 916.25, just 1 point above our resistance level. As the rally lost its steam, the E-mini SP fell to 901.75 where another short covering rally pushed the index back up to 910.00. Once more the SP retreated to the 902.00 level just to try to push higher above the previous highs, as our update called to get short below the 911.50 and unable to break higher, the SP pushed all the way down to the early 895.00 lows. A rally attempt failed on a double top at the pivotal 902.00 area and the SP made all its way down to 884.50. A quick bounce managed to test 900.00 where sellers stepped back in driving the markets down once more. The SP fell to the daily lows where good support was seen and the markets bounced back into the close. For the day, the SP lost 17.00 points and settled at 889.50, the Nasdaq gave back 15.00 points ending the session at 1217.00 and the Russell closed the session at 569.40, minus 12.10 points. The Dow lost 242 points ending the day at 8691.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” Yesterday’s action showed the follow through move and continuation rally that we were expecting, also, the commodities finally manage to bounce. The early strength seen on the markets was the first outbreak of the triangle formation that we have been following, and despite the fact that gives some confidence that a short term low has been posted, yesterday’s action saw most of the session a sideways patter, not only that, the late sell off shows that some profit taking should be seen very soon. If the futures settlement would have been at the highs, I would think that the rally from Friday’s 817.00 lows to yesterday’s levels could be exhausted and place the rally on a risk position, however, the fact that the indexes settled in the middle of their intraday range, makes me think that we should see another attempt to break higher, that at this time I consider will be a successful one as the SP may be able to get to my 940.00-960.00 objective while the Dow gets to the 9400. This expected rally, without great confidence, without big volumes and with continued bad economic reports should result in more volatile moves, but the sell offs should found support. Yesterday’s rally was joined by the crude oil, which should continue to try to move higher for a test of $50, this is positive for the stock markets. So, in conclusion, the rally may be able to get above yesterday’s highs, but some consolidation may be seen during the next two days as market digests the last huge move. For today’s trading session, expect two side actions as markets consolidate the last move, on the early going, try to get short near our first resistance level, on a lower opening wait for our second support level to get tested before you try to play a long position, if the SP does not get there, then a double bottom at yesterday’s 893.50 low could offer a good long entry with tight stops. Don’t overstay your welcome on a any good trade.”
We came into yesterday’s session looking to be an early buyer at our 893.50 area, the SP made an early low at 894.00; many traders were able to take advantage of this early set up. Than we try to short around the pivotal 908.50 but the strength on the Nasdaq took the SP all the way up to our 915.50 second resistance levels, where once the index traded below 911.50 traders sold all the rallies.
We were expecting a consolidation of the last huge rally and we considered that the SP would be able to close the open gap at 879.50, however good support was found just five points above that area. Yesterday’s pullback was something traders were expecting, and the rally should be able to continue on its way to the 940.00-960.00 levels on the SP. I am a bit disappointed that the index did not closed the gap, if that not happens today, it will happened in the future.
As there is more talking about the automakers bailout plan, the markets will continue to react to outsides news, so is highly recommended to add a stop loss order to every open position. Yesterday’s failure to break above Monday’s high on the SP and to trade above the 9000 level on the Dow, could result in another negative session, despite that the markets could be building a base for a Santa Claus rally.
If we consider that the last rally has a 100 point extension on the SP, and that the pivotal 861.00 area or a bit lower could be reached during the next couple of days, if we see additional selling pressure, that could set up my expected rally to the 940.00-960.00 area if we have a symmetrical move. So unless outside news that result in another huge short covering move pushes the markets up during today’s session, I will consider every rally as a selling opportunity, of course the SP will have to hold below the 908.50-911.50 resistance band or the rally will happen before a substantial pull back. The first sign that the markets will continue to move lower, could come from weakness on the Nasdaq, so keep a close eye on the strong support around 1200.00-1198.00, if those levels get broken the other indexes should follow the move. On the other side, if the SP manages to break above the 911.50 area and the Dow finally breaks 9000, more strength could be seen. In this scenario, another day of consolidation could also happen. Remember that traders will be concentrated in the rollover from the December to the March contracts, and that the next two sessions are full of economic reports.
For today’s trading session, a higher opening that holds below my 910.00-912.00 resistance area could result in a huge selling opportunity.
TODAY’S SESSION
There is resistance is at 893.50-895.00 on the SP, 1222.00-1223.00 on the Nasdaq and 473.50-474.90 on the Russell. If the markets open above those levels they should act as good support on an initial pullback, if they hold, look for the indexes to continue higher reaching 899.00-900.50 on the SP, 1230.00-1231.50 on the Nasdaq and 476.1`0-477.50 on the Russell. Those are pivotal, and the first sign of additional short covering that takes the SP all the way up to my 910.00-912.00 last resistance levels will be seen once the index trades above 902.75, if that happens, the only hurdles on the way will be 906.00-907.50 on the SP, 1245.00-1246.00 on the Nasdaq and 479.20-480.40 on the Russell.
There is strong support at 886.50-885.00 on the SP, 1210.00-1208.00 on the Nasdaq and 466.00-465.30 on the Russell. If the markets get there look for them to hold the first time they get tested, if they fail, the open gap will act as a magnet as the indexes reach 880.00-879.00 on the SP, 1202.00-1201.00 on the Nasdaq and 462.10-461.20 on the Russell. Those levels are critical, in particular for the Nasdaq, trading below them could accelerate the profit taking move pushing the markets down to 874.00-872.00 on the SP, 1188.00-1186.00 on the Nasdaq and 457.90-456.00 on the Russell. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 910.00-912.00 1253.00-1254.00 486.00-487.30
Resistance 3 906.00-907.50 1245.00-1246.00 479.20-480.40
Resistance 2 899.00-900.50 1230.00-1231.50 476.10-477.50
Resistance 1 893.50-895.00 1222.00-1223.00 473.50-474.90
PIVOT 896.75 1223.00 474.20
Support 1 886.50-885.00 1210.00-1208.00 466.00-465.30
Support 2 880.00-879.00 1202.00-1201.00 462.10-461.20
Support 3 874.00-872.00 1188.00-1186.00 457.90-456.00
Support 4 864.75-863.50 1172.00-1171.00 450.80-448.80
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
967.62 1336.64 544.88
960.13 1324.36 537.32
948.00 1304.50 525.10
935.87 1284.64 512.88
928.38 1272.36 505.32
916.25 1252.50 493.10
904.12 1232.64 480.88
900.38 1226.50 477.10
896.63 1220.36 473.32
884.50 1200.50 461.10
872.37 1180.64 448.88
864.88 1168.36 441.32
852.75 1148.50 429.10
840.62 1128.64 416.88
833.13 1116.36 409.32
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 902.00 1260.50 480.00
AS DAILY LOW 871.50 1208.00 448.80
S&P NASDAQ RUSSELL
Resistance 4 910.00-912.00 1253.00-1254.00 486.00-487.30
Resistance 3 906.00-907.50 1245.00-1246.00 479.20-480.40
Resistance 2 899.00-900.50 1230.00-1231.50 476.10-477.50
Resistance 1 893.50-895.00 1222.00-1223.00 473.50-474.90
PIVOT 896.75 1223.00 474.20
Support 1 886.50-885.00 1210.00-1208.00 466.00-465.30
Support 2 880.00-879.00 1202.00-1201.00 462.10-461.20
Support 3 874.00-872.00 1188.00-1186.00 457.90-456.00
Support 4 864.75-863.50 1172.00-1171.00 450.80-448.80
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
967.62 1336.64 544.88
960.13 1324.36 537.32
948.00 1304.50 525.10
935.87 1284.64 512.88
928.38 1272.36 505.32
916.25 1252.50 493.10
904.12 1232.64 480.88
900.38 1226.50 477.10
896.63 1220.36 473.32
884.50 1200.50 461.10
872.37 1180.64 448.88
864.88 1168.36 441.32
852.75 1148.50 429.10
840.62 1128.64 416.88
833.13 1116.36 409.32
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 902.00 1260.50 480.00
AS DAILY LOW 871.50 1208.00 448.80
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