DAILY TRADING ADVISORY 16-December-2008
FOR THE REAL TIME REPORT VISIT OUR WEBSITE
NY Empire State Index better than expected, Industrial Production, minus .6%, lower for the third consecutive month and Apple downgrade kept the markets under pressure during all the session.
ECONOMIC DATA
8:30 AM Building Permits
8:30 AM Core CPI
8:30 AM CPI
8:30 AM Housing Starts
2:15 AM FOMC Policy Statement
YESTERDAY’S MARKET
The SP opened near the unchanged mark and leaded by the weakness on the E-mini Nasdaq traded lower reaching 877.50 from where it bounced to 882.25 just to get sold once again strongly reaching 867.50. A feeble bounce to 872.00 was met with additional selling pressure pushing the SP down to 863.50 where the market bottomed. As bulls stepped in, the SP reached 870.00, pulled back to 865.75 and rallied to 873.75 where the rally lost its momentum. As weakness returned into the markets, the SP pushed down to new intraday lows at 861.00. As the Nasdaq held its previous lows, the E-mini SP bounced back to 869.75 and pulled back to 864.50. The continued relative strength on the Nasdaq resulted in another bounce that also failed to gain upside momentum resulting in another pullback, this time to 863.50. Another bounce posting lower highs pushed the SP to a new low at 860.50 and then 856.25 from where the index rallied strong to 871.50, pulled back to 866.50 and continued higher reaching 874.00 just sold off to 865.50 before bouncing into the end. For the day, the SP lost 13.25 points and settled at 872.25, the E-mini Nasdaq ended the session at 1195.00, minus 20.00 points and the Russell lost 14.80 points closing the session at 455.20. The Dow lost 65 points, closing at 8564.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” The problem, Friday’s late move; the indexes moved strongly up during the last 15 minutes of the session closing above fair value, or we had a lot of shorts that after the failure to move lower ran to cover, or nobody wanted to lose the opportunity of higher prices during today’s session. I suspect, that even if my studies call for higher prices into the end of the month, Monday should be if not a negative session, at least a consolidation of the last two trading sessions with the markets moving in a sideways pattern inside their triangle formation.
It will be really interesting, that during this week, a normally bullish week, with a FOMC rate policy decision and next Friday quadruple witching, and the equity markets won’t be able to break higher. So getting some kind of pullback during today and maybe the first part of tomorrow’s trading session should be considered a buying opportunity, but traders have to consider that last Friday’s 828.00 Globex low could be tested before markets move up. For today’s trading session, an early rally that fails near the 898.50-901.00 areas on the SP, a weakening Nasdaq against the SP, or getting below the late Friday’s support level seen around 870.00, could indicate weakness that could lead markets lower reaching maybe 8400 on the Dow and 8500 on the SP. On the other side of the coin, if the markets start with a weak note, look for the 870.00 area on the SP to hold the first time it gets tested, that should result in a bounce to the 880.00 level where sellers will be waiting in order to try and push the indexes lower.”
Yesterday’s consolidating session was expected. Only at the end stocks were able to come back after trading under pressure for most of the day, the rallies were no more than weak bounces but the indexes were able to bounce closing with moderate loses.
Investor fear, reflected on the lack of participation in the markets and the flight to bonds, may halt any rally attempt during the coming session, despite that the markets are acting well after any sell off attempt. I am still looking for the SP to move higher and reach 940.00-960.00, if that happens before of after the end of the year, I don’t know. Last Friday’s 828.00 Globex lows seem to be a problem, I don’t like when the SP does not trade the nightly prices, and if the continued bad economic data and the FOMC rate decision due for today disappoints, we could see that area tested before bulls come back with force.
However, the SP and Dow have respected the mid term triangle formation which once it gets broken surely will result in a strong move. That means that the 892.00 resistance area and the 848.00 low boundary when beaten will indicate short term direction, until this breakout occurs, the markets will continue to trade on a sideways pattern; all the time that the false breaks, like the 828.00 last Friday’s low on the SP get immediately reversed. The pattern of trend looks a bit easier on the Nasdaq, the 1200.00 area is the line in the sand, that index is positive or negative above and below that level.
There is not a clear indication of what can happen during today’s session. The early part of the session will be influenced by the economic data, if those are not worst than expected we should see some short covering in front of the interest rate decision. Once the first 2 hours of trading finish, the market should enter in a “Mexican Siesta” period where nothing happens and everybody sleeps a couple of hours or go for and early lunch. Then 15-20 minutes before the announcement, the early move should get reversed as traders start to lighten positions. When the FOMC decision comes out, we should see three different moves during the next 40 minutes, an initial impulsive move that fails, a reversal of that move and the final trend move which is the one that we traders try to follow. So only if you have big bucks and wide stops get involve in the first two moves, but take into account that if you are lucky and you go in the right direction, be quick to take your profits. Anyway, stops must be wider than in a regular trading session.
Take also in account that many times the resulted move seen during the FOMC rate decision session gets reversed the next day starting a trend pattern that can last for a few days.
TODAY’S SESSION
Once the indexes trade above the pivot point levels, there is resistance at 876.00-878.00 on the SP, 1203.00-1205.00 on the Nasdaq and 458.20-459.00 on the Russell. If those levels get exceeded look for the markets to test 882.00-883.50 on the SP, 1210.00-1212.00 on the Nasdaq and 462.30-463.90 on the Russell. If the rally loses its momentum near those areas, look for a possible reversal that should be able to gain momentum once the indexes trade back in negative territory, however, if those do not stop the rally look for the markets to push higher reaching 891.00-892.00 on the SP, 1223.00-1225.00 on the Nasdaq and 572.30-473.00. Those levels are just below yesterday’s Globex highs, so if the indexes finally try to breakout above them, expect a quick run to the SP as shorts run for cover.
There is some support at 868.50-866.00 on the SP, 1189.75-1188.00 on the Nasdaq and 451.10-449.20 on the Russell. If those can not hold the pullback, then the markets will be on their way for a test of the key levels at 863.00-861.00 on the SP, 1184.00-1182.00 on the Nasdaq and 446.30-445.10 on the Russell. Nothing bad happens if those levels can hold, but if they fail look for the markets to gain some downside momentum pushing down to 854.00-853.00 on the SP, 1175.00-1173.00 on the Nasdaq and 439.90-437.40 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
FOR THE REAL TIME REPORT VISIT OUR WEBSITE
NY Empire State Index better than expected, Industrial Production, minus .6%, lower for the third consecutive month and Apple downgrade kept the markets under pressure during all the session.
ECONOMIC DATA
8:30 AM Building Permits
8:30 AM Core CPI
8:30 AM CPI
8:30 AM Housing Starts
2:15 AM FOMC Policy Statement
YESTERDAY’S MARKET
The SP opened near the unchanged mark and leaded by the weakness on the E-mini Nasdaq traded lower reaching 877.50 from where it bounced to 882.25 just to get sold once again strongly reaching 867.50. A feeble bounce to 872.00 was met with additional selling pressure pushing the SP down to 863.50 where the market bottomed. As bulls stepped in, the SP reached 870.00, pulled back to 865.75 and rallied to 873.75 where the rally lost its momentum. As weakness returned into the markets, the SP pushed down to new intraday lows at 861.00. As the Nasdaq held its previous lows, the E-mini SP bounced back to 869.75 and pulled back to 864.50. The continued relative strength on the Nasdaq resulted in another bounce that also failed to gain upside momentum resulting in another pullback, this time to 863.50. Another bounce posting lower highs pushed the SP to a new low at 860.50 and then 856.25 from where the index rallied strong to 871.50, pulled back to 866.50 and continued higher reaching 874.00 just sold off to 865.50 before bouncing into the end. For the day, the SP lost 13.25 points and settled at 872.25, the E-mini Nasdaq ended the session at 1195.00, minus 20.00 points and the Russell lost 14.80 points closing the session at 455.20. The Dow lost 65 points, closing at 8564.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” The problem, Friday’s late move; the indexes moved strongly up during the last 15 minutes of the session closing above fair value, or we had a lot of shorts that after the failure to move lower ran to cover, or nobody wanted to lose the opportunity of higher prices during today’s session. I suspect, that even if my studies call for higher prices into the end of the month, Monday should be if not a negative session, at least a consolidation of the last two trading sessions with the markets moving in a sideways pattern inside their triangle formation.
It will be really interesting, that during this week, a normally bullish week, with a FOMC rate policy decision and next Friday quadruple witching, and the equity markets won’t be able to break higher. So getting some kind of pullback during today and maybe the first part of tomorrow’s trading session should be considered a buying opportunity, but traders have to consider that last Friday’s 828.00 Globex low could be tested before markets move up. For today’s trading session, an early rally that fails near the 898.50-901.00 areas on the SP, a weakening Nasdaq against the SP, or getting below the late Friday’s support level seen around 870.00, could indicate weakness that could lead markets lower reaching maybe 8400 on the Dow and 8500 on the SP. On the other side of the coin, if the markets start with a weak note, look for the 870.00 area on the SP to hold the first time it gets tested, that should result in a bounce to the 880.00 level where sellers will be waiting in order to try and push the indexes lower.”
Yesterday’s consolidating session was expected. Only at the end stocks were able to come back after trading under pressure for most of the day, the rallies were no more than weak bounces but the indexes were able to bounce closing with moderate loses.
Investor fear, reflected on the lack of participation in the markets and the flight to bonds, may halt any rally attempt during the coming session, despite that the markets are acting well after any sell off attempt. I am still looking for the SP to move higher and reach 940.00-960.00, if that happens before of after the end of the year, I don’t know. Last Friday’s 828.00 Globex lows seem to be a problem, I don’t like when the SP does not trade the nightly prices, and if the continued bad economic data and the FOMC rate decision due for today disappoints, we could see that area tested before bulls come back with force.
However, the SP and Dow have respected the mid term triangle formation which once it gets broken surely will result in a strong move. That means that the 892.00 resistance area and the 848.00 low boundary when beaten will indicate short term direction, until this breakout occurs, the markets will continue to trade on a sideways pattern; all the time that the false breaks, like the 828.00 last Friday’s low on the SP get immediately reversed. The pattern of trend looks a bit easier on the Nasdaq, the 1200.00 area is the line in the sand, that index is positive or negative above and below that level.
There is not a clear indication of what can happen during today’s session. The early part of the session will be influenced by the economic data, if those are not worst than expected we should see some short covering in front of the interest rate decision. Once the first 2 hours of trading finish, the market should enter in a “Mexican Siesta” period where nothing happens and everybody sleeps a couple of hours or go for and early lunch. Then 15-20 minutes before the announcement, the early move should get reversed as traders start to lighten positions. When the FOMC decision comes out, we should see three different moves during the next 40 minutes, an initial impulsive move that fails, a reversal of that move and the final trend move which is the one that we traders try to follow. So only if you have big bucks and wide stops get involve in the first two moves, but take into account that if you are lucky and you go in the right direction, be quick to take your profits. Anyway, stops must be wider than in a regular trading session.
Take also in account that many times the resulted move seen during the FOMC rate decision session gets reversed the next day starting a trend pattern that can last for a few days.
TODAY’S SESSION
Once the indexes trade above the pivot point levels, there is resistance at 876.00-878.00 on the SP, 1203.00-1205.00 on the Nasdaq and 458.20-459.00 on the Russell. If those levels get exceeded look for the markets to test 882.00-883.50 on the SP, 1210.00-1212.00 on the Nasdaq and 462.30-463.90 on the Russell. If the rally loses its momentum near those areas, look for a possible reversal that should be able to gain momentum once the indexes trade back in negative territory, however, if those do not stop the rally look for the markets to push higher reaching 891.00-892.00 on the SP, 1223.00-1225.00 on the Nasdaq and 572.30-473.00. Those levels are just below yesterday’s Globex highs, so if the indexes finally try to breakout above them, expect a quick run to the SP as shorts run for cover.
There is some support at 868.50-866.00 on the SP, 1189.75-1188.00 on the Nasdaq and 451.10-449.20 on the Russell. If those can not hold the pullback, then the markets will be on their way for a test of the key levels at 863.00-861.00 on the SP, 1184.00-1182.00 on the Nasdaq and 446.30-445.10 on the Russell. Nothing bad happens if those levels can hold, but if they fail look for the markets to gain some downside momentum pushing down to 854.00-853.00 on the SP, 1175.00-1173.00 on the Nasdaq and 439.90-437.40 on the Russell. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 899.00-901.00 1236.00-1238.50 478.20-480.00
Resistance 3 891.00-892.00 1223.00-1225.00 472.30-473.00
Resistance 2 882.50-883.50 1210.00-1212.00 462.30-463.90
Resistance 1 876.00-878.00 1203.00-1205.00 458.20-459.00
PIVOT 874.00 1196.00 457.10
Support 1 868.50-866.00 1189.75-1188.00 451.10-449.20
Support 2 863.00-861.00 1184.00-1182.00 446.30-445.10
Support 3 854.00-853.00 1175.00-1173.50 439.90-437.40
Support 4 845.00-844.00 1165.00-1163.00 433.50-432.60
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
952.46 1316.82 526.62
943.79 1303.43 518.98
929.75 1281.75 506.60
915.71 1260.07 494.22
907.04 1246.68 486.58
893.00 1225.00 474.20
878.96 1203.32 461.82
874.63 1196.63 458.00
870.29 1189.93 454.18
856.25 1168.25 441.80
842.21 1146.57 429.42
833.54 1133.18 421.78
819.50 1111.50 409.40
805.46 1089.82 397.02
796.79 1076.43 389.38
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 882.50 1210.00 464.70
AS DAILY LOW 845.00 1153.25 432.30
S&P NASDAQ RUSSELL
Resistance 4 899.00-901.00 1236.00-1238.50 478.20-480.00
Resistance 3 891.00-892.00 1223.00-1225.00 472.30-473.00
Resistance 2 882.50-883.50 1210.00-1212.00 462.30-463.90
Resistance 1 876.00-878.00 1203.00-1205.00 458.20-459.00
PIVOT 874.00 1196.00 457.10
Support 1 868.50-866.00 1189.75-1188.00 451.10-449.20
Support 2 863.00-861.00 1184.00-1182.00 446.30-445.10
Support 3 854.00-853.00 1175.00-1173.50 439.90-437.40
Support 4 845.00-844.00 1165.00-1163.00 433.50-432.60
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
952.46 1316.82 526.62
943.79 1303.43 518.98
929.75 1281.75 506.60
915.71 1260.07 494.22
907.04 1246.68 486.58
893.00 1225.00 474.20
878.96 1203.32 461.82
874.63 1196.63 458.00
870.29 1189.93 454.18
856.25 1168.25 441.80
842.21 1146.57 429.42
833.54 1133.18 421.78
819.50 1111.50 409.40
805.46 1089.82 397.02
796.79 1076.43 389.38
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 882.50 1210.00 464.70
AS DAILY LOW 845.00 1153.25 432.30
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