DAILY TRADING ADVISORY 24-December-2008
GDP minus .5% as year old recession deepens, New Home Sales at its lowest level since 1991 and worst than estimated Michigan sentiment index reading resulted in a positive session for the U.S. equity markets. CIT Group becomes a bank holding company and receives another chunk of the TARP funds. American Express to receive $3.39 billion as part of government's rescue program. Housing prices continue to collapse.
ECONOMIC DATA
8:30 AM Initial Claims
8:30 AM Durable Orders
8:30 AM Personal Income
8:30 AM Personal Spending
10:35 AM Crude Inventories
YESTERDAY’S MARKET
After a quite Globex session, the E-mini SP opened the day at 873.50 and bounced to 876.00 during the first minutes of the session. The SP backed off to 970.50 as traders waited for the release of the next piece of economic data. As the numbers get released, the SP pushed up to 875.50, pulled back to 869.75 and continued to hold on a low volume trading session. The successful test of the early lows resulted in a rebound that managed to reach 877.50, but the Russell weakness held the SP of trading above the 878.00 Globex high. As the session continued with low pace, the SP pulled back to the Globex 868.00 lows, and once those lows get broken, the index pushed down to 875.75, at our first support level and bounced to 869.50 but failed there pushing to a new low at 860.50 where a double bottom resulted in a bounce to 863.50 and pushed down to a new marginal low at 859.50. As trading volumes continue to be light, the index traded for a long period on a narrow range between 861.00 and 864.00, as it consolidated, finally broke higher reaching 867.00 from where it pulled back to 863.50 just to make another attempt to trade higher which once it failed resulted in another pullback to 861.00 failed to hold and the SP broke to new lows testing the 856.75 area from where it bounced to 861.00 just to fail and move lower to a new marginal low at 855.75 from where to 862.00 and traded sideways in a pre holiday illiquid market closing the day with some weakness. For the session, the SP lost 12.75 points and settled at 858.50, the Nasdaq lost 12.50 closing at 1184.50 and the Russell settled at 464.60, minus 12.50 points. The Dow ended the day at 8419, down 100 points.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:”
Yesterday’s session showed once more the lack of interest and participation by investors and traders. Despite the fact that the markets were able to hold in a good way the bad economic reports, the early strength was not able to hold, and the continuing selling did not have a chance to get reversed because of the ultra light volumes and illiquidity on the Markets. Traders who got long early and those who were able to sell, made a nice profit, but it’s a matter of luck as this trading volumes, normal for this week made difficult any participation.
Today wont be different, the first hour will be guided by the economic numbers, after that volumes will disappear as traders leave for the holidays, take in account that markets will be closing early, so don’t expect any important action after the first 60 minutes.
Yesterday’s sell off should be able to show some continuation once the Dow starts to trade beloe 8380 and the SP breaks the 855.00 area, if there is momentum to move lower, the SP should test the 846.00 level, however, if they try to move higher, 870.00 could be seen before the session is over.
My recommendation, take the day free, spend time with your family and friends, and probably Monday, if some of the funds and hedge are not done yet for the year, expect some additional volume, if that not happen, then until next year, trading conditions will continue to be highly erratic.
TODAY’S SESSION
There is resistance at 863.00-864.50 on the SP, 1190.00-1192.00 on the Nasdaq and 466.20-467.80 on the Russell. If the indexes can not make it above them look for early weakness that could gain momentum as the day passes, if those do not offer a real obstacle for a short covering rally, markets may be able to move a bit higher testing 868.00-869.00 on the SP, 1201.00-1202.50 on the Nasdaq and 469.90-471.20 on the Russell. Breaking above those areas will give markets a chance to press a bit higher, I don’t think so but anything is possible.
Support is at 856.00-855.00 on the SP, 1181.00-1179.50 on the Nasdaq and 463.00-461.40 on the Russell. If those can not hold, look for some extra support levels at 852.00-851.00 on the SP, 1174.00-1172.00on the Nasdaq and 458.10-457.30 on the Russell. Breaking those areas will indicate a move to the 832.00 level on the SP in the coming sessions. 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
THEMINITRADE WISH TO ALL OF YOU A HAPPY CHRISTMAS
We remind you that service won’t be available next Thursday and Friday
We remind you that service won’t be available next Thursday and Friday
GDP minus .5% as year old recession deepens, New Home Sales at its lowest level since 1991 and worst than estimated Michigan sentiment index reading resulted in a positive session for the U.S. equity markets. CIT Group becomes a bank holding company and receives another chunk of the TARP funds. American Express to receive $3.39 billion as part of government's rescue program. Housing prices continue to collapse.
ECONOMIC DATA
8:30 AM Initial Claims
8:30 AM Durable Orders
8:30 AM Personal Income
8:30 AM Personal Spending
10:35 AM Crude Inventories
YESTERDAY’S MARKET
After a quite Globex session, the E-mini SP opened the day at 873.50 and bounced to 876.00 during the first minutes of the session. The SP backed off to 970.50 as traders waited for the release of the next piece of economic data. As the numbers get released, the SP pushed up to 875.50, pulled back to 869.75 and continued to hold on a low volume trading session. The successful test of the early lows resulted in a rebound that managed to reach 877.50, but the Russell weakness held the SP of trading above the 878.00 Globex high. As the session continued with low pace, the SP pulled back to the Globex 868.00 lows, and once those lows get broken, the index pushed down to 875.75, at our first support level and bounced to 869.50 but failed there pushing to a new low at 860.50 where a double bottom resulted in a bounce to 863.50 and pushed down to a new marginal low at 859.50. As trading volumes continue to be light, the index traded for a long period on a narrow range between 861.00 and 864.00, as it consolidated, finally broke higher reaching 867.00 from where it pulled back to 863.50 just to make another attempt to trade higher which once it failed resulted in another pullback to 861.00 failed to hold and the SP broke to new lows testing the 856.75 area from where it bounced to 861.00 just to fail and move lower to a new marginal low at 855.75 from where to 862.00 and traded sideways in a pre holiday illiquid market closing the day with some weakness. For the session, the SP lost 12.75 points and settled at 858.50, the Nasdaq lost 12.50 closing at 1184.50 and the Russell settled at 464.60, minus 12.50 points. The Dow ended the day at 8419, down 100 points.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:”
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. 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.”
Yesterday’s session showed once more the lack of interest and participation by investors and traders. Despite the fact that the markets were able to hold in a good way the bad economic reports, the early strength was not able to hold, and the continuing selling did not have a chance to get reversed because of the ultra light volumes and illiquidity on the Markets. Traders who got long early and those who were able to sell, made a nice profit, but it’s a matter of luck as this trading volumes, normal for this week made difficult any participation.
Today wont be different, the first hour will be guided by the economic numbers, after that volumes will disappear as traders leave for the holidays, take in account that markets will be closing early, so don’t expect any important action after the first 60 minutes.
Yesterday’s sell off should be able to show some continuation once the Dow starts to trade beloe 8380 and the SP breaks the 855.00 area, if there is momentum to move lower, the SP should test the 846.00 level, however, if they try to move higher, 870.00 could be seen before the session is over.
My recommendation, take the day free, spend time with your family and friends, and probably Monday, if some of the funds and hedge are not done yet for the year, expect some additional volume, if that not happen, then until next year, trading conditions will continue to be highly erratic.
TODAY’S SESSION
There is resistance at 863.00-864.50 on the SP, 1190.00-1192.00 on the Nasdaq and 466.20-467.80 on the Russell. If the indexes can not make it above them look for early weakness that could gain momentum as the day passes, if those do not offer a real obstacle for a short covering rally, markets may be able to move a bit higher testing 868.00-869.00 on the SP, 1201.00-1202.50 on the Nasdaq and 469.90-471.20 on the Russell. Breaking above those areas will give markets a chance to press a bit higher, I don’t think so but anything is possible.
Support is at 856.00-855.00 on the SP, 1181.00-1179.50 on the Nasdaq and 463.00-461.40 on the Russell. If those can not hold, look for some extra support levels at 852.00-851.00 on the SP, 1174.00-1172.00on the Nasdaq and 458.10-457.30 on the Russell. Breaking those areas will indicate a move to the 832.00 level on the SP in the coming sessions. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 879.00-881.00 1224.00-1226.00 484.00-485.30
Resistance 3 872.50-873.00 1213.00-1215.00 474.20-475.50
Resistance 2 868.00-869.00 1201.00-1202.50 469.90-471.20
Resistance 1 863.00-864.50 1190.00-1192.00 466.20-467.80
PIVOT 864.00 1189.00 469.10
Support 1 856.00-855.00 1181.00-1179.50 463.00-461.40
Support 2 852.00-851.00 1174.00-1172.00 458.10-457.30
Support 3 847.00-845.50 1168.00-1167.00 454.90-454.10
Support 4 838.00-836.00 1158.00-1157.00 445.90-444.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
914.00 1255.44 507.83
908.75 1248.31 503.77
900.25 1236.75 497.20
891.75 1225.19 490.63
886.50 1218.06 486.57
878.00 1206.50 480.00
869.50 1194.94 473.43
866.88 1191.38 471.40
864.25 1187.81 469.37
855.75 1176.25 462.80
847.25 1164.69 456.23
842.00 1157.56 452.17
833.50 1146.00 445.60
825.00 1134.44 439.03
819.75 1127.31 434.97
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 868.00 1195.50 472.30
AS DAILY LOW 845.00 1165.00 454.90
S&P NASDAQ RUSSELL
Resistance 4 879.00-881.00 1224.00-1226.00 484.00-485.30
Resistance 3 872.50-873.00 1213.00-1215.00 474.20-475.50
Resistance 2 868.00-869.00 1201.00-1202.50 469.90-471.20
Resistance 1 863.00-864.50 1190.00-1192.00 466.20-467.80
PIVOT 864.00 1189.00 469.10
Support 1 856.00-855.00 1181.00-1179.50 463.00-461.40
Support 2 852.00-851.00 1174.00-1172.00 458.10-457.30
Support 3 847.00-845.50 1168.00-1167.00 454.90-454.10
Support 4 838.00-836.00 1158.00-1157.00 445.90-444.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
914.00 1255.44 507.83
908.75 1248.31 503.77
900.25 1236.75 497.20
891.75 1225.19 490.63
886.50 1218.06 486.57
878.00 1206.50 480.00
869.50 1194.94 473.43
866.88 1191.38 471.40
864.25 1187.81 469.37
855.75 1176.25 462.80
847.25 1164.69 456.23
842.00 1157.56 452.17
833.50 1146.00 445.60
825.00 1134.44 439.03
819.75 1127.31 434.97
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 868.00 1195.50 472.30
AS DAILY LOW 845.00 1165.00 454.90
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