DAILY TRADING ADVISORY 23-December-2008
Toyota firs ever operating loss, China cutting rates and Walgreens disappointing earnings result in a negative session but off the lows. Commercial mortgage defaults looms extending the waiting line for federal bailouts. Automakers fall sharply as the approved loans may dilute stock value.
ECONOMIC DATA
8:30 AM Chain Deflator- Final
8:30 AM GDP- Final
10:00 AM Existing Home Sales
10:00 AM Michigan Sentiment- Rev.
10:00 AM New Home Sales
YESTERDAY’S MARKET
After trading on a sideways pattern during the Globex session, the E-mini SP started the day at 884.50 with some selling pressure, a test of 885.50 resulted in an early sell off that drove the index down to 876.50, just above the 875.75 Globex lows and on our support levels. The SP bounced back to 881.00 just to get sold once more to new intraday lows reaching 873.75 without showing any rebound attempt. After posting a small higher low at 874.50, the SP bounced to 878.75, tested once more 875.00 and bounced to 879.00 without any momentum. The failure to trade back above the 881.00 area resulted in additional weakness pushing the SP to new lows at 867.25 from where the index bounced to 872.25, moved down to 869.00 and bounced to 874.25, however the extremely light volumes made difficult the rally attempt to continue. As the light trading activity continued, the SP pushed lower testing the intraday 867.25 low. As the other indexes continued to make new lows, the SP finally gave up pushing lower to 859.00 where it found support. The SP bounced to 864.25 but failed to hold and moved lower printing new lows at 856.75. Another feeble bounce resulted in another selling opportunity as markets made new lows with the SP reaching 852.75, just three ticks above our updated downside objective from where the index finally rallied to 863.5 and then backed off a few points just to continue higher into the end of the session.
.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” Friday’s early rally and failure to hold gains, the late sell off that repeats Thursday’s session last hour of trading and the reversal that the bullish Russell has been showing, despite the new marginal highs on this index, may look as our expected holiday’s rally could be in jeopardy, and could indicate that we probably will continue to trade on a wide range and a higher breakout is not possible at this moment. However, if we take into consideration that the markets have been able to hold, this struggling rally still has the chances to move higher in the short term and finally reach our upside objective. Friday’s trading session where the December expiration took place, the weather conditions that kept the trading floors empty and the seasonal low volumes (Friday’s volumes were high due to the expiration) and lack of interest present at this time of the year, does not confirm yet the present pattern as a failure to try and move higher, but as natural circumstances of this time of the year. I have not lost yet my expectancies to see the SP reaching 940.00-960.00 before the end of the year; markets may be ready to make the move. After last Tuesday Fed’s rally, the indexes have continue to consolidate, and even if the rallies attempt have failed, the sell offs have been limited and the markets have been able to hold above key support levels. However, the lower highs and double tops on the daily charts with the indexes honoring their resistance levels could result in a suddenly sell off that could push the indexes lower before a sustainable bounce is seen. The last two session we have seen strong openings and late selling, if this pattern fail to repeat during today’s trading session, that means that markets start weak and get reversed above last Friday’s settlements, or the early rally manage to hold into the close, then something may be changing and we could be on the way to my expected upside move, so I won’t feel disappointed if we get a good sell off during the first 60-120 minutes of the session and then markets break higher. That means that last week lows could be tested, if the indexes manage to come back and trade higher, they should be able to move higher, if the markets can not post a positive session during the first two days of the week, then the way will be open for another test of the 820.00-800.00 levels.”
Monday’s session opened stable but selling pressure was seen during all the session, except for the late strong reversal. We have now three consecutive negative trading sessions, and as I have mentioned, countertrend moves last between 1-3 days, so if the way is up and this last three consecutive negative session are a first degree correction, the rally should resume today. This last rally has been struggling to continue its uptrend, the same has been seen for the sell off attempts, they have not been able to “kill” this holiday rally, BUT, markets were rejected during the last few days from strong resistance areas, 920.00 on the SP, 9000 on the Dow and 500.00 on the Russell. So in this bear trend, even if the indexes have been able to hold, in the long term, more overall weakness may be seen below those areas.
Yesterday’s late rebound, in particular in the Russell, keeps the door open for higher prices during the upcoming sessions, Of course all the time that yesterday’s lows hold. Yesterday was the first trading session that the last hour resulted in higher trading prices; the markets should be ready to move higher for our expected Santa Claus rally.
Volumes were light, but this is a normal condition for this time of the year, so it does not give us any clue; trading conditions are difficult under this circumstances, so if you trade, do it with a small position.
Today, we’ll get a few economic numbers, GDP, housing data and consumer sentiment, so expect this numbers to impact today’s trading session. I assume the numbers won’t be good, but if the indexes can hold the first part of the session, we could see as yesterday a late rebound, however if yesterday’s lows get broken, we could be on the way for the 820.00 area on the SP and we could forget about any Christmas rally.
TODAY’S SESSION
There is resistance above yesterday’s close at 874.50-875.50 on the SP, 1202.00-1203.00 on the Nasdaq and 480.10-481.20 on the Russell. If the markets won’t be able to trade above them, another test of yesterday’s lows could be in the cards, if they exceed them look for strong resistance at 879.00-871.00 on the SP, 1210.00-1212.00 on the Nasdaq and 483.40-485.50 on the Russell. Those are the line between bulls and bears, and markets should be considered weak below them, but if they finally break strong, look for the index to test the next resistance areas at 890.00-891.50 on the SP, 1224.00-1226.00 on the Nasdaq and 489.00-490.40 on the Russell. A close above those areas will indicate higher prices for the rest of the week.
There is support at 867.00-866.00 on the SP, 1192.00-1190.50 on the Nasdaq and 474.10-473.30 on the Russell. If those can not hold, look for strong support levels at 862.00-860.50 on the SP, 1184.00-1182.00 on the Nasdaq and 470.10-468.20 on the Russell. If those areas hold or the markets get above them after trading lower, look for another strong rally as yesterday’s late one, however if markets fail there, then another test of yesterday’s lows could be seen before the session is over. 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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Toyota firs ever operating loss, China cutting rates and Walgreens disappointing earnings result in a negative session but off the lows. Commercial mortgage defaults looms extending the waiting line for federal bailouts. Automakers fall sharply as the approved loans may dilute stock value.
ECONOMIC DATA
8:30 AM Chain Deflator- Final
8:30 AM GDP- Final
10:00 AM Existing Home Sales
10:00 AM Michigan Sentiment- Rev.
10:00 AM New Home Sales
YESTERDAY’S MARKET
After trading on a sideways pattern during the Globex session, the E-mini SP started the day at 884.50 with some selling pressure, a test of 885.50 resulted in an early sell off that drove the index down to 876.50, just above the 875.75 Globex lows and on our support levels. The SP bounced back to 881.00 just to get sold once more to new intraday lows reaching 873.75 without showing any rebound attempt. After posting a small higher low at 874.50, the SP bounced to 878.75, tested once more 875.00 and bounced to 879.00 without any momentum. The failure to trade back above the 881.00 area resulted in additional weakness pushing the SP to new lows at 867.25 from where the index bounced to 872.25, moved down to 869.00 and bounced to 874.25, however the extremely light volumes made difficult the rally attempt to continue. As the light trading activity continued, the SP pushed lower testing the intraday 867.25 low. As the other indexes continued to make new lows, the SP finally gave up pushing lower to 859.00 where it found support. The SP bounced to 864.25 but failed to hold and moved lower printing new lows at 856.75. Another feeble bounce resulted in another selling opportunity as markets made new lows with the SP reaching 852.75, just three ticks above our updated downside objective from where the index finally rallied to 863.5 and then backed off a few points just to continue higher into the end of the session.
.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” Friday’s early rally and failure to hold gains, the late sell off that repeats Thursday’s session last hour of trading and the reversal that the bullish Russell has been showing, despite the new marginal highs on this index, may look as our expected holiday’s rally could be in jeopardy, and could indicate that we probably will continue to trade on a wide range and a higher breakout is not possible at this moment. However, if we take into consideration that the markets have been able to hold, this struggling rally still has the chances to move higher in the short term and finally reach our upside objective. Friday’s trading session where the December expiration took place, the weather conditions that kept the trading floors empty and the seasonal low volumes (Friday’s volumes were high due to the expiration) and lack of interest present at this time of the year, does not confirm yet the present pattern as a failure to try and move higher, but as natural circumstances of this time of the year. I have not lost yet my expectancies to see the SP reaching 940.00-960.00 before the end of the year; markets may be ready to make the move. After last Tuesday Fed’s rally, the indexes have continue to consolidate, and even if the rallies attempt have failed, the sell offs have been limited and the markets have been able to hold above key support levels. However, the lower highs and double tops on the daily charts with the indexes honoring their resistance levels could result in a suddenly sell off that could push the indexes lower before a sustainable bounce is seen. The last two session we have seen strong openings and late selling, if this pattern fail to repeat during today’s trading session, that means that markets start weak and get reversed above last Friday’s settlements, or the early rally manage to hold into the close, then something may be changing and we could be on the way to my expected upside move, so I won’t feel disappointed if we get a good sell off during the first 60-120 minutes of the session and then markets break higher. That means that last week lows could be tested, if the indexes manage to come back and trade higher, they should be able to move higher, if the markets can not post a positive session during the first two days of the week, then the way will be open for another test of the 820.00-800.00 levels.”
Monday’s session opened stable but selling pressure was seen during all the session, except for the late strong reversal. We have now three consecutive negative trading sessions, and as I have mentioned, countertrend moves last between 1-3 days, so if the way is up and this last three consecutive negative session are a first degree correction, the rally should resume today. This last rally has been struggling to continue its uptrend, the same has been seen for the sell off attempts, they have not been able to “kill” this holiday rally, BUT, markets were rejected during the last few days from strong resistance areas, 920.00 on the SP, 9000 on the Dow and 500.00 on the Russell. So in this bear trend, even if the indexes have been able to hold, in the long term, more overall weakness may be seen below those areas.
Yesterday’s late rebound, in particular in the Russell, keeps the door open for higher prices during the upcoming sessions, Of course all the time that yesterday’s lows hold. Yesterday was the first trading session that the last hour resulted in higher trading prices; the markets should be ready to move higher for our expected Santa Claus rally.
Volumes were light, but this is a normal condition for this time of the year, so it does not give us any clue; trading conditions are difficult under this circumstances, so if you trade, do it with a small position.
Today, we’ll get a few economic numbers, GDP, housing data and consumer sentiment, so expect this numbers to impact today’s trading session. I assume the numbers won’t be good, but if the indexes can hold the first part of the session, we could see as yesterday a late rebound, however if yesterday’s lows get broken, we could be on the way for the 820.00 area on the SP and we could forget about any Christmas rally.
TODAY’S SESSION
There is resistance above yesterday’s close at 874.50-875.50 on the SP, 1202.00-1203.00 on the Nasdaq and 480.10-481.20 on the Russell. If the markets won’t be able to trade above them, another test of yesterday’s lows could be in the cards, if they exceed them look for strong resistance at 879.00-871.00 on the SP, 1210.00-1212.00 on the Nasdaq and 483.40-485.50 on the Russell. Those are the line between bulls and bears, and markets should be considered weak below them, but if they finally break strong, look for the index to test the next resistance areas at 890.00-891.50 on the SP, 1224.00-1226.00 on the Nasdaq and 489.00-490.40 on the Russell. A close above those areas will indicate higher prices for the rest of the week.
There is support at 867.00-866.00 on the SP, 1192.00-1190.50 on the Nasdaq and 474.10-473.30 on the Russell. If those can not hold, look for strong support levels at 862.00-860.50 on the SP, 1184.00-1182.00 on the Nasdaq and 470.10-468.20 on the Russell. If those areas hold or the markets get above them after trading lower, look for another strong rally as yesterday’s late one, however if markets fail there, then another test of yesterday’s lows could be seen before the session is over. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 896.50-898.00 1233.00-1236.00 494.90-496.00
Resistance 3 890.00-891.50 1224.00-1226.00 489.00-490.40
Resistance 2 879.00-881.00 1210.00-1212.00 483.40-485.50
Resistance 1 874.50-875.50 1202.00-1203.00 480.10-481.20
PIVOT 871.75 1196.50 474.50
Support 1 867.00-866.00 1192.00-1190.50 474.10-473.30
Support 2 862.00-860.50 1184.00-1182.00 470.10-468.20
Support 3 852.50-851.00 1169.00-1167.00 462.90-461.20
Support 4 844.00-842.00 1156.00-1155.00 456.70-455.80
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
954.20 1310.87 541.82
945.05 1298.13 534.18
930.25 1277.50 521.80
915.45 1256.87 509.42
906.30 1244.13 501.78
891.50 1223.50 489.40
876.70 1202.87 477.02
872.13 1196.50 473.20
867.55 1190.13 469.38
852.75 1169.50 457.00
837.95 1148.87 444.62
828.80 1136.13 436.98
814.00 1115.50 424.60
799.20 1094.87 412.22
790.05 1082.13 404.58
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 881.50 1210.25 483.30
AS DAILY LOW 842.00 1156.00 450.90
S&P NASDAQ RUSSELL
Resistance 4 896.50-898.00 1233.00-1236.00 494.90-496.00
Resistance 3 890.00-891.50 1224.00-1226.00 489.00-490.40
Resistance 2 879.00-881.00 1210.00-1212.00 483.40-485.50
Resistance 1 874.50-875.50 1202.00-1203.00 480.10-481.20
PIVOT 871.75 1196.50 474.50
Support 1 867.00-866.00 1192.00-1190.50 474.10-473.30
Support 2 862.00-860.50 1184.00-1182.00 470.10-468.20
Support 3 852.50-851.00 1169.00-1167.00 462.90-461.20
Support 4 844.00-842.00 1156.00-1155.00 456.70-455.80
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
954.20 1310.87 541.82
945.05 1298.13 534.18
930.25 1277.50 521.80
915.45 1256.87 509.42
906.30 1244.13 501.78
891.50 1223.50 489.40
876.70 1202.87 477.02
872.13 1196.50 473.20
867.55 1190.13 469.38
852.75 1169.50 457.00
837.95 1148.87 444.62
828.80 1136.13 436.98
814.00 1115.50 424.60
799.20 1094.87 412.22
790.05 1082.13 404.58
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 881.50 1210.25 483.30
AS DAILY LOW 842.00 1156.00 450.90
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