DAILY TRADING ADVISORY 18-December-2008
FOR THE REAL TIME REPORT VISIT OUR WEBSITE
Stocks fluctuate as they consolidate the last rally. Morgan Stanley reports a wider than expected loss. Crude oil slips as dollar lost value after the Fed slashed rates. Chrysler and Ford idle factories.
ECONOMIC DATA
8:30 AM Initial Claims
10:00 AM Leading Indicators
10:00 AM Philadelphia Fed
YESTERDAY’S MARKET
After trading sharply lower during the Globex session, the SP started the day at 904.00 from where it pushed down to 897.75 where support came in. The index bounced to 906.50 but failed on its attempt to break higher. Leaded by the weakness on the Nasdaq, the SP fell to a new intraday low at 895.00. Unable to gain momentum to continue lower, the SP bounced all the way up to 907.00 backed off to 898.00 and in an erratic move pushed all the way up to 910.25. A five point pullback held the sell off attempt and with the Russell pushing strongly higher, the index moved up reaching 918.25. The SP pulled back once more just to get bough and pushing higher posting a double top. The failure to break higher resulted in a profit taking move driving the SP down to 903.75. The SP formed a bottom and rallied to 913.25 from where it pulled back to 908.25, bounced back to 913.50, tested 903.75 holding and bouncing back once more to 913.00 to finally push lower during the last minutes of the session. For the day, the SP lost 9.50 points closing the session at 903.25, the Nasdaq gave back 12.50 points and settled at 1228.50 and the Russell ended up by 4 points at 483.00. The Dow lost 99 point at 8824.
.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” Well, the Fed did not disappoint, and regardless of the poor economic data, pointing for deflation and signaling additional contraction on the housing sector, markets pushed strongly higher. Last week highs at 919.00 on the SP and 9000 on the Dow will have to get exceeded in order to get a confirmation for yesterday’s huge breakout of the last triangle formation. However, the close above the 908.50-905.50 levels on the SP should be seen positively. I wrote in my yesterday’s report that many times the move seen during a Fed’s day gets reversed during the next session, I don’t know if there in enough bears out there to get a totally reversal from yesterday’s rally, but at least, we could see some consolidation from yesterday’s move. Last week 9000 level on the Dow was clearly rejected, so selling the rallies all the time that the SP and the Dow do not break above last week highs may be the way to go for today’s trading session. That does mot mean that in a n expected consolidation opportunities can not be found on both sides of the markets, so an early sell off that pushes the markets down strong could result in a late rally, but if the indexes can not move higher showing some follow through for yesterday’s move, the 890.00 on the SP should be visited today.”
Yesterday’s consolidating session and erratic conditions indicates the lack of momentum in this artificial short term rally generated by the recent rate cut, expectations about the automakers bailout plan and possible stimulus package to be released next month, all this together with the “Santa” effect where everybody calls for a seasonal rally may keep this market afloat on this struggling upside move, that maybe, will push the SP to the 940.00-960.00 level. However, there is a lot of pending fund liquidations and deleveraging is still present in the markets. So, despite the fact that the market should be able to try and move a bit higher, it will set up another mid-term short opportunity that probably will result in a new low, how deep will the markets go? We’ll get the answer once the recent rally gets exhausted. The Dow and SP each traded quietly sideways during the session, as resistance continues to be a factor. So, for this rally to continue, the recent highs will have to get exceeded with strong momentum. If the markets fail to push higher, then the rally that I was expecting to reach at least that 940.00 area on the SP and 9400 on the Dow, will just be another “Santa” dream.
Looking at yesterday’s trading action we saw the consolidation after Tuesday’s breakout rally, but all of the indexes are still fighting against their recent highs, this kind of markets behavior, increase trading risk, and if this conditions continue during today’s session, reducing the size of your position sounds good.
During today’s trading session we’ll get the release of the weekly initial claims data and a bit later the Leading Indicators and Philadelphia Fed numbers, this should dictate the early moves on the markets, and later, tomorrow’s expirations at the opening of the trading session, will force many traders to offset their positions today before the close. So, volatile conditions could be present since the opening of the session.
Until the recent highs around the 918.00 and 9000 on the Dow get decisive broken, trading both sides of the range should be the way to go. Keep a close eye on the Russell that acted with strength during yesterday’s session, if today, is joined by the Nasdaq, probably will see the 930.00 on the SP, however, if conditions area mixed, look for another difficult trading session as it happened yesterday. A weak opening will start to indicate another possible correction, but keep in mind that the sell off attempts have been met with strong support. So, if we have a negative start for the session and the SP trades below the 900.00 area don’t run to pick a bottom, better wait until that ondex trades above the pivot pint and the other marketys show signs of life.
TODAY’S SESSION
There is resistance at 905.00-906.00 on the SP, 1232.00-1233.50 on the Nasdaq and 484.50-486.30 on the Russell. If the tend is up those should get easily exceeded and push higher to 911.00-912.00 on the SP, 1239.00-1241.00 on the Nasdaq and 488.90-490.20 on the Russell. Those levels were rejected a few times during yesterday’s last hour of the session, so they should be able to hold, if that happens look to get short around there with very tight stops, but if the indexes finally trade higher, then expect another test of the recent highs at 918.00-920.00 on the SP, 1248.00-1250.00 on the Nasdaq and 492.90-493.90 on the Russell, Breaking above them could give the markets the expected momentum tio move higher.
There is support at 900.00-898.00 on the SP, 1224.00-1221.00 on the Nasdaq and 479.80-478.00 on the Russell. Thiose leveld held very nice during yesterday’s session, and all the time that the indexes keep trading above them there is a chance of a good rally, however, if they fail to hold, look for additional support at 893.50-892.00 on the SP, 1215.00-1213.00 on the Nasdaq and 475.60-474.80 on the Russell. Nothing bad happens if the sell off holds there, but if the market breaks lower look for a test of 887.00-886.50 on the SP, 1207.00-1206.00 on the Nasdaq and 471.80-471.00 on the Russell before buyers jump back in. those areas were pivotal during Tuesday’s Fed’s rally, so if the markets fail there look for the downside move to gain strong momentum. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 926.50-928.00 1267.00-1269.00 497.20-498.70
Resistance 3 918.00-920.00 1248.00-1250.00 492.90-493.90
Resistance 2 911.00-912.00 1239.00-1241.00 488.90-490.20
Resistance 1 905.00-906.00 1232.00-1233.50 484.50-486.30
PIVOT 902.50 1226.00 481.60
Support 1 900.00-898.00 1224.00-1221.00 479.80-478.00
Support 2 893.50-892.00 1215.00-1213.00 475.60-474.80
Support 3 887.00-886.50 1207.00-1206.00 471.80-471.00
Support 4 882.00-881.00 1196.00-1194.00 464.10-463.30
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
969.22 1308.66 523.88
961.78 1299.34 519.12
949.75 1284.25 511.40
937.72 1269.16 503.68
930.28 1259.84 498.92
918.25 1244.75 491.20
906.22 1229.66 483.48
902.50 1225.00 481.10
898.78 1220.34 478.72
886.75 1205.25 471.00
874.72 1190.16 463.28
867.28 1180.84 458.52
855.25 1165.75 450.80
843.22 1150.66 443.08
835.78 1141.34 438.32
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 910.50 1236.00 497.00
AS DAILY LOW 879.00 1197.00 476.80
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
FOR THE REAL TIME REPORT VISIT OUR WEBSITE
Stocks fluctuate as they consolidate the last rally. Morgan Stanley reports a wider than expected loss. Crude oil slips as dollar lost value after the Fed slashed rates. Chrysler and Ford idle factories.
ECONOMIC DATA
8:30 AM Initial Claims
10:00 AM Leading Indicators
10:00 AM Philadelphia Fed
YESTERDAY’S MARKET
After trading sharply lower during the Globex session, the SP started the day at 904.00 from where it pushed down to 897.75 where support came in. The index bounced to 906.50 but failed on its attempt to break higher. Leaded by the weakness on the Nasdaq, the SP fell to a new intraday low at 895.00. Unable to gain momentum to continue lower, the SP bounced all the way up to 907.00 backed off to 898.00 and in an erratic move pushed all the way up to 910.25. A five point pullback held the sell off attempt and with the Russell pushing strongly higher, the index moved up reaching 918.25. The SP pulled back once more just to get bough and pushing higher posting a double top. The failure to break higher resulted in a profit taking move driving the SP down to 903.75. The SP formed a bottom and rallied to 913.25 from where it pulled back to 908.25, bounced back to 913.50, tested 903.75 holding and bouncing back once more to 913.00 to finally push lower during the last minutes of the session. For the day, the SP lost 9.50 points closing the session at 903.25, the Nasdaq gave back 12.50 points and settled at 1228.50 and the Russell ended up by 4 points at 483.00. The Dow lost 99 point at 8824.
.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” Well, the Fed did not disappoint, and regardless of the poor economic data, pointing for deflation and signaling additional contraction on the housing sector, markets pushed strongly higher. Last week highs at 919.00 on the SP and 9000 on the Dow will have to get exceeded in order to get a confirmation for yesterday’s huge breakout of the last triangle formation. However, the close above the 908.50-905.50 levels on the SP should be seen positively. I wrote in my yesterday’s report that many times the move seen during a Fed’s day gets reversed during the next session, I don’t know if there in enough bears out there to get a totally reversal from yesterday’s rally, but at least, we could see some consolidation from yesterday’s move. Last week 9000 level on the Dow was clearly rejected, so selling the rallies all the time that the SP and the Dow do not break above last week highs may be the way to go for today’s trading session. That does mot mean that in a n expected consolidation opportunities can not be found on both sides of the markets, so an early sell off that pushes the markets down strong could result in a late rally, but if the indexes can not move higher showing some follow through for yesterday’s move, the 890.00 on the SP should be visited today.”
Yesterday’s consolidating session and erratic conditions indicates the lack of momentum in this artificial short term rally generated by the recent rate cut, expectations about the automakers bailout plan and possible stimulus package to be released next month, all this together with the “Santa” effect where everybody calls for a seasonal rally may keep this market afloat on this struggling upside move, that maybe, will push the SP to the 940.00-960.00 level. However, there is a lot of pending fund liquidations and deleveraging is still present in the markets. So, despite the fact that the market should be able to try and move a bit higher, it will set up another mid-term short opportunity that probably will result in a new low, how deep will the markets go? We’ll get the answer once the recent rally gets exhausted. The Dow and SP each traded quietly sideways during the session, as resistance continues to be a factor. So, for this rally to continue, the recent highs will have to get exceeded with strong momentum. If the markets fail to push higher, then the rally that I was expecting to reach at least that 940.00 area on the SP and 9400 on the Dow, will just be another “Santa” dream.
Looking at yesterday’s trading action we saw the consolidation after Tuesday’s breakout rally, but all of the indexes are still fighting against their recent highs, this kind of markets behavior, increase trading risk, and if this conditions continue during today’s session, reducing the size of your position sounds good.
During today’s trading session we’ll get the release of the weekly initial claims data and a bit later the Leading Indicators and Philadelphia Fed numbers, this should dictate the early moves on the markets, and later, tomorrow’s expirations at the opening of the trading session, will force many traders to offset their positions today before the close. So, volatile conditions could be present since the opening of the session.
Until the recent highs around the 918.00 and 9000 on the Dow get decisive broken, trading both sides of the range should be the way to go. Keep a close eye on the Russell that acted with strength during yesterday’s session, if today, is joined by the Nasdaq, probably will see the 930.00 on the SP, however, if conditions area mixed, look for another difficult trading session as it happened yesterday. A weak opening will start to indicate another possible correction, but keep in mind that the sell off attempts have been met with strong support. So, if we have a negative start for the session and the SP trades below the 900.00 area don’t run to pick a bottom, better wait until that ondex trades above the pivot pint and the other marketys show signs of life.
TODAY’S SESSION
There is resistance at 905.00-906.00 on the SP, 1232.00-1233.50 on the Nasdaq and 484.50-486.30 on the Russell. If the tend is up those should get easily exceeded and push higher to 911.00-912.00 on the SP, 1239.00-1241.00 on the Nasdaq and 488.90-490.20 on the Russell. Those levels were rejected a few times during yesterday’s last hour of the session, so they should be able to hold, if that happens look to get short around there with very tight stops, but if the indexes finally trade higher, then expect another test of the recent highs at 918.00-920.00 on the SP, 1248.00-1250.00 on the Nasdaq and 492.90-493.90 on the Russell, Breaking above them could give the markets the expected momentum tio move higher.
There is support at 900.00-898.00 on the SP, 1224.00-1221.00 on the Nasdaq and 479.80-478.00 on the Russell. Thiose leveld held very nice during yesterday’s session, and all the time that the indexes keep trading above them there is a chance of a good rally, however, if they fail to hold, look for additional support at 893.50-892.00 on the SP, 1215.00-1213.00 on the Nasdaq and 475.60-474.80 on the Russell. Nothing bad happens if the sell off holds there, but if the market breaks lower look for a test of 887.00-886.50 on the SP, 1207.00-1206.00 on the Nasdaq and 471.80-471.00 on the Russell before buyers jump back in. those areas were pivotal during Tuesday’s Fed’s rally, so if the markets fail there look for the downside move to gain strong momentum. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 926.50-928.00 1267.00-1269.00 497.20-498.70
Resistance 3 918.00-920.00 1248.00-1250.00 492.90-493.90
Resistance 2 911.00-912.00 1239.00-1241.00 488.90-490.20
Resistance 1 905.00-906.00 1232.00-1233.50 484.50-486.30
PIVOT 902.50 1226.00 481.60
Support 1 900.00-898.00 1224.00-1221.00 479.80-478.00
Support 2 893.50-892.00 1215.00-1213.00 475.60-474.80
Support 3 887.00-886.50 1207.00-1206.00 471.80-471.00
Support 4 882.00-881.00 1196.00-1194.00 464.10-463.30
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
969.22 1308.66 523.88
961.78 1299.34 519.12
949.75 1284.25 511.40
937.72 1269.16 503.68
930.28 1259.84 498.92
918.25 1244.75 491.20
906.22 1229.66 483.48
902.50 1225.00 481.10
898.78 1220.34 478.72
886.75 1205.25 471.00
874.72 1190.16 463.28
867.28 1180.84 458.52
855.25 1165.75 450.80
843.22 1150.66 443.08
835.78 1141.34 438.32
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 910.50 1236.00 497.00
AS DAILY LOW 879.00 1197.00 476.80
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