Arturo Stern
09-02-2008, 11:54 PM
DAILY TRADING ADVISORY 02-September-2008
Lower than estimated Dell’s earnings, Personal Income lower than expected and a slower Consumer spending as inflation remains strong, resulted in a negative session for the US equity markets.
WEEKLY PIVOTS FOR WEEK ENDING 29-August-2008
R3 1356.50
R2 1338.00
R1 1300.75
PP 1281.50
S1 1263.50
S2 1244.00
S3 1225.00
ECONOMIC DATA
10:00 AM Construction Spending
10:00 AM ISM Index
WEEKLY RECAP
Markets started the week on a negative tone but manage to recover later on the week after holding key support levels. The E-mini SP started the week under strong pressure after rumors about Fannie Mae and Freddie Mac were on their way for a bail out. Regardless that both mortgage giants made early lows and rallied later, stocks plunged despite that the existing Home sales bounced from the previous month, however home prices continued to fall. The session was a disaster for those who held long positions from the previous Friday as all the indexes ended sharply lower. The E-mini SP lost 25.75 points closing at 1266.50, the Nasdaq lost 34.50 points at 1895.00, and the Russell gave back 16.30 points ending at 721.70. The Dow lost more than 2% closing the session at 11286 after losing 241 points. Tuesday’ session resulted in a consolidation of the previous day huge sell off. New Home sales came out better than expected and the Consumer Confidence report was higher than the previous months. The session was quite as low volumes, normal for this period of the year, kept traders on the sidelines. The FOMC minutes for the August 5th FED’s meeting indicated continue concern about growth and inflation but hinted that rates will stay lower for the coming months. The SP tested short term key support levels at the 1263.00-1261.00 band but managed to bounce into the end of the session as markets closed mixed for the session. The SP ended up 5.25 points at 1271.75, the Nasdaq lost 3.50 points at 1891.50 and the Russell added 2.20 points finishing the session at 723.90. The Dow ended higher by 26 points at 11412. Wednesday, the indexes made early lows and rallied strong into the end of the session. A better than expected Durable Orders report and Fannie Mae and Freddie Mac trading higher for the third consecutive day pushed stock higher with the SP closing higher by 10.25 points at 1282.00, the Nasdaq recovering 20.25 points closing the session at 1901.75 and the E-mini Russell closing at 731.30, up 7.40 for the day. The Dow also closed higher by 89 points at 11502. The end of month strong bullishness continued into Thursday’s session as markets were pleased by the second quarter GDP revision despite that some analyst consider that number weak as a result of the inflation pressure. In addition, the weekly initial claims report was lower by the third consecutive week. The future indexes opened with a strong gap and never looked back. The E-mini SP traded at 1300.00 but the E-mini Nasdaq continued to show weakness and got sold into the end of the session, however the other indexes posted another strong session. The SP closed higher 16.00 points at 1298.00, the Nasdaq added 3.75 points at 1905.50 and the Russell gained 13.70 points and settled at 745.00. The Dow posted a very strong session with a 212 points advance ending the session at 11715. The party came to an end for Friday’s session, Dell’s lackluster 2Q report showing lower earnings and Consumer Spending and Personal Income also uninspiring numbers which showed additional pressure on the consumer resulted in a negative session. Markets opened lower and failed to trade on positive territory as pressure was present during all the session. Oil traded higher early in the morning as hurricane Gustav threatened the Golf refineries but ended almost unchanged for the day. The main indexes posted losses as the E-mini SP closed lower by 15.50 points at 1282.50, the Nasdaq sold off strongly losing 30.50 points and closing the session at 1875.00 and the Russell which keeps showing relative strength lost 5.10 points finishing the week at 739.90. The Dow lost 171 points and settled at 11543. The volumes were extremely low during the week.
FRIDAY’S MARKETS
Markets fall after disappointing economic data. The E-mini SP opened lower at 1293.50 pushing lower one point and bouncing to 1297.75 where the rally attempt failed to trade above Thursday’s settlement. Guided by the weakness on the E-mini Nasdaq, the indexes pushed lower with the SP testing the opening lows. The index bounced to 1294.50 where sellers stepped back in and pressed lower to new lows. After breaking below the 1291.00 intraday key supports, the SP pushed lower reaching 1286.75 while the weak Nasdaq reached 1873.00. Another rebound tested 1290.00 but the index failed to break higher and moved back down to the intraday lows. Once more the SP bounced to the 1290.00 level just to get sold once more pushing lower to 1284.00. After holding near the lows for almost an hour, the indexes bounced on a short covering rally, the SP reached 1291.75 and the Nasdaq 1885.00 where the rally stalled, the E-mini SP pulled back to 1288.00 holding on a narrow range just to move lower and make new lows into the end of the session. For the day the SP was down 15.50 points closing the session at 1282.50, the E-mini Nasdaq lost 30.50 points and settled at 1875.00 and the Russell gave back 5.10 points ending the session at 739.90. The Dow saw a very negative session losing 171 points ending the week at 11543.
MARKET COMMENTARY AND OUTLOOK
Last Friday I wrote:” The fact that the SP closed above the 1291.00 area placed that index once more on its way to the 1320.00-1340.00 area which could be reached during the next few weeks while the Dow runs to the 12000-12100. But not everything looks so nice; the continuous weakness on the Nasdaq is a red flag that at some moment will press the SP to move lower. The trading conditions are very difficult at this period of the year, the ultra light volumes are typical during the last two weeks of August, but now volumes are even lower that the normal average and this keeps the fewer traders practically on the sidelines. The Nasdaq may give us the indication for the next big move, if yesterday’s highs get broken, getting much higher on the SP will be a question of days, but failing to hold above the 1880.00 on the E-mini Nasdaq will result in a fast and wide fall for the SP and Dow. The fact that the SP did not trade below my 1261.00 area is quite bullish and shorts will have troubles moving the index lower for more that a one day profit taking session. The recent rally could also show some pullback in front of this holiday weekend. So early strength could be sold near the resistance levels”
So once more the indexes have been rejected from key resistance areas with the SP closing once more below the 1291.00 level, the Dow failing for a second time at the 11700 area and this time, with the techs leading the way down. As traders returns from their summer vacations, volumes should start to get normal during this full of economic data week and the markets could finally show us some short term direction, or maybe just keep trading in their recent ranges. Last week 1263.00-1261.00 area on the SP should be tested once more, “IF” the E-mini Nasdaq breaks below Friday’s lows. If this happen, a new down leg could drive this index at least to the 1848.00 area and if that level do not hold, then support will be only found around the 1810.00-1800.00 levels which should coincide with 1248.00-1245.00 on the SP and 11100 on the Dow, only then we’ll know if the SP is headed for the 1180 level that should be a “good” low for October. However if the SP holds above the 1275.00 level during today’s trading session or manage to rebound from another test of the low 1260.00’s, then instead of another downside leg we could see a long term consolidation pattern with a struggling bullish bias that in the short term points to the 1320.00-1340.00 area on the SP and 12000-12100 on the Dow.
So, after Friday’s sell off it will be important for the indexes to move higher in order to maintain this short term uptrend, should lower crude oil prices help the markets moving higher in the short term? It seems a real possibility as indexes keep reacting to lower commodities prices, even that in the medium term this issue it is no so important.
For today’s trading session, it will be important for the Nasdaq to hold above Friday’s lows and for the SP to close once more above the 1291.00 level. Assuming that Friday’s sell off was trigger by the fear to be long on a long weekend, the indexes may be able to come back during today’s trading session if the short term trend is still up.
.
TODAY’S SESSION
There is resistance just above Friday’s settlement at 1284.00-1285.50 on the E-mini SP, 1879.50-1882.00 on the E-mini Nasdaq and 741.70-742.70 on the E-mini Russell. If the market opens above those areas we could have another strong session that once it breaks above 1289.50-1291.00 on the SP, 1886.00-1888.00 on the Nasdaq and 745.30-745.80 on the Russell will place the indexes in a strong position. If that happens, look for the markets to reach 1294.00-1295.50 on the SP, 1895.00-189750 on the Nasdaq and 748.80-750.70 on the Russell before some selling comes into the markets. If those levels get exceeded look for the indexes to test once more last week highs before the session is over.
There is support at 1281.00-1279.50 on the E-mini SP, 1870.50-1868.75 on the Nasdaq and 738.10-737.20 on the E-mini Russell. If the indexes do not hold those levels, in particular on the Nasdaq, be ready for additional weakness that push down prices to the next levels at 1277.00-1276.50 on the SP, 1864.00-1863.00 on the Nasdaq and 735.10-734.40 on the Russell. Those areas are extremely important and should hold the first time the indexes get there, however, if buyers do not step in there look for additional weakness that push the indexes lower to 1272.00-1270.75 on the SP, 1859.00-1857.50 on the Nasdaq and 731.00-730.70 on the Russell before buyers jump strong in to the scene. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 1300.75-1303.00 1910.00-1911.75 755.30-757.70
Resistance 3 1294.00-1295.50 1895.00-1897.50 748.80-750.70
Resistance 2 1289.50-1291.00 1886.00-1888.00 745.30-745.80
Resistance 1 1284.00-1285.50 1879.50-1882.00 741.70-742.70
PIVOT 1287.25 1883.50 740.70
Support 1 1281.00-1279.50 1870.50-1868.75 738.10-737.20
Support 2 1277.00-1276.50 1864.00-1863.00 735.10-734.40
Support 3 1272.00-1270.75 1859.00-1857.50 731.00-730.70
Support 4 1264.00-1262.50 1852.50-1851.50 727.70-726.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
1324.70 1973.53 762.28
1320.80 1963.97 759.92
1314.50 1948.50 756.10
1308.20 1933.03 752.28
1304.30 1923.47 749.92
1298.00 1908.00 746.10
1291.70 1892.53 742.28
1289.75 1887.75 741.10
1287.80 1882.97 739.92
1281.50 1867.50 736.10
1275.20 1852.03 732.28
1271.30 1842.47 729.92
1265.00 1827.00 726.10
1258.70 1811.53 722.28
1254.80 1801.97 719.92
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 1290.25 1891.50 743.00
AS DAILY LOW 1273.75 1851.00 733.00
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.
Lower than estimated Dell’s earnings, Personal Income lower than expected and a slower Consumer spending as inflation remains strong, resulted in a negative session for the US equity markets.
WEEKLY PIVOTS FOR WEEK ENDING 29-August-2008
R3 1356.50
R2 1338.00
R1 1300.75
PP 1281.50
S1 1263.50
S2 1244.00
S3 1225.00
ECONOMIC DATA
10:00 AM Construction Spending
10:00 AM ISM Index
WEEKLY RECAP
Markets started the week on a negative tone but manage to recover later on the week after holding key support levels. The E-mini SP started the week under strong pressure after rumors about Fannie Mae and Freddie Mac were on their way for a bail out. Regardless that both mortgage giants made early lows and rallied later, stocks plunged despite that the existing Home sales bounced from the previous month, however home prices continued to fall. The session was a disaster for those who held long positions from the previous Friday as all the indexes ended sharply lower. The E-mini SP lost 25.75 points closing at 1266.50, the Nasdaq lost 34.50 points at 1895.00, and the Russell gave back 16.30 points ending at 721.70. The Dow lost more than 2% closing the session at 11286 after losing 241 points. Tuesday’ session resulted in a consolidation of the previous day huge sell off. New Home sales came out better than expected and the Consumer Confidence report was higher than the previous months. The session was quite as low volumes, normal for this period of the year, kept traders on the sidelines. The FOMC minutes for the August 5th FED’s meeting indicated continue concern about growth and inflation but hinted that rates will stay lower for the coming months. The SP tested short term key support levels at the 1263.00-1261.00 band but managed to bounce into the end of the session as markets closed mixed for the session. The SP ended up 5.25 points at 1271.75, the Nasdaq lost 3.50 points at 1891.50 and the Russell added 2.20 points finishing the session at 723.90. The Dow ended higher by 26 points at 11412. Wednesday, the indexes made early lows and rallied strong into the end of the session. A better than expected Durable Orders report and Fannie Mae and Freddie Mac trading higher for the third consecutive day pushed stock higher with the SP closing higher by 10.25 points at 1282.00, the Nasdaq recovering 20.25 points closing the session at 1901.75 and the E-mini Russell closing at 731.30, up 7.40 for the day. The Dow also closed higher by 89 points at 11502. The end of month strong bullishness continued into Thursday’s session as markets were pleased by the second quarter GDP revision despite that some analyst consider that number weak as a result of the inflation pressure. In addition, the weekly initial claims report was lower by the third consecutive week. The future indexes opened with a strong gap and never looked back. The E-mini SP traded at 1300.00 but the E-mini Nasdaq continued to show weakness and got sold into the end of the session, however the other indexes posted another strong session. The SP closed higher 16.00 points at 1298.00, the Nasdaq added 3.75 points at 1905.50 and the Russell gained 13.70 points and settled at 745.00. The Dow posted a very strong session with a 212 points advance ending the session at 11715. The party came to an end for Friday’s session, Dell’s lackluster 2Q report showing lower earnings and Consumer Spending and Personal Income also uninspiring numbers which showed additional pressure on the consumer resulted in a negative session. Markets opened lower and failed to trade on positive territory as pressure was present during all the session. Oil traded higher early in the morning as hurricane Gustav threatened the Golf refineries but ended almost unchanged for the day. The main indexes posted losses as the E-mini SP closed lower by 15.50 points at 1282.50, the Nasdaq sold off strongly losing 30.50 points and closing the session at 1875.00 and the Russell which keeps showing relative strength lost 5.10 points finishing the week at 739.90. The Dow lost 171 points and settled at 11543. The volumes were extremely low during the week.
FRIDAY’S MARKETS
Markets fall after disappointing economic data. The E-mini SP opened lower at 1293.50 pushing lower one point and bouncing to 1297.75 where the rally attempt failed to trade above Thursday’s settlement. Guided by the weakness on the E-mini Nasdaq, the indexes pushed lower with the SP testing the opening lows. The index bounced to 1294.50 where sellers stepped back in and pressed lower to new lows. After breaking below the 1291.00 intraday key supports, the SP pushed lower reaching 1286.75 while the weak Nasdaq reached 1873.00. Another rebound tested 1290.00 but the index failed to break higher and moved back down to the intraday lows. Once more the SP bounced to the 1290.00 level just to get sold once more pushing lower to 1284.00. After holding near the lows for almost an hour, the indexes bounced on a short covering rally, the SP reached 1291.75 and the Nasdaq 1885.00 where the rally stalled, the E-mini SP pulled back to 1288.00 holding on a narrow range just to move lower and make new lows into the end of the session. For the day the SP was down 15.50 points closing the session at 1282.50, the E-mini Nasdaq lost 30.50 points and settled at 1875.00 and the Russell gave back 5.10 points ending the session at 739.90. The Dow saw a very negative session losing 171 points ending the week at 11543.
MARKET COMMENTARY AND OUTLOOK
Last Friday I wrote:” The fact that the SP closed above the 1291.00 area placed that index once more on its way to the 1320.00-1340.00 area which could be reached during the next few weeks while the Dow runs to the 12000-12100. But not everything looks so nice; the continuous weakness on the Nasdaq is a red flag that at some moment will press the SP to move lower. The trading conditions are very difficult at this period of the year, the ultra light volumes are typical during the last two weeks of August, but now volumes are even lower that the normal average and this keeps the fewer traders practically on the sidelines. The Nasdaq may give us the indication for the next big move, if yesterday’s highs get broken, getting much higher on the SP will be a question of days, but failing to hold above the 1880.00 on the E-mini Nasdaq will result in a fast and wide fall for the SP and Dow. The fact that the SP did not trade below my 1261.00 area is quite bullish and shorts will have troubles moving the index lower for more that a one day profit taking session. The recent rally could also show some pullback in front of this holiday weekend. So early strength could be sold near the resistance levels”
So once more the indexes have been rejected from key resistance areas with the SP closing once more below the 1291.00 level, the Dow failing for a second time at the 11700 area and this time, with the techs leading the way down. As traders returns from their summer vacations, volumes should start to get normal during this full of economic data week and the markets could finally show us some short term direction, or maybe just keep trading in their recent ranges. Last week 1263.00-1261.00 area on the SP should be tested once more, “IF” the E-mini Nasdaq breaks below Friday’s lows. If this happen, a new down leg could drive this index at least to the 1848.00 area and if that level do not hold, then support will be only found around the 1810.00-1800.00 levels which should coincide with 1248.00-1245.00 on the SP and 11100 on the Dow, only then we’ll know if the SP is headed for the 1180 level that should be a “good” low for October. However if the SP holds above the 1275.00 level during today’s trading session or manage to rebound from another test of the low 1260.00’s, then instead of another downside leg we could see a long term consolidation pattern with a struggling bullish bias that in the short term points to the 1320.00-1340.00 area on the SP and 12000-12100 on the Dow.
So, after Friday’s sell off it will be important for the indexes to move higher in order to maintain this short term uptrend, should lower crude oil prices help the markets moving higher in the short term? It seems a real possibility as indexes keep reacting to lower commodities prices, even that in the medium term this issue it is no so important.
For today’s trading session, it will be important for the Nasdaq to hold above Friday’s lows and for the SP to close once more above the 1291.00 level. Assuming that Friday’s sell off was trigger by the fear to be long on a long weekend, the indexes may be able to come back during today’s trading session if the short term trend is still up.
.
TODAY’S SESSION
There is resistance just above Friday’s settlement at 1284.00-1285.50 on the E-mini SP, 1879.50-1882.00 on the E-mini Nasdaq and 741.70-742.70 on the E-mini Russell. If the market opens above those areas we could have another strong session that once it breaks above 1289.50-1291.00 on the SP, 1886.00-1888.00 on the Nasdaq and 745.30-745.80 on the Russell will place the indexes in a strong position. If that happens, look for the markets to reach 1294.00-1295.50 on the SP, 1895.00-189750 on the Nasdaq and 748.80-750.70 on the Russell before some selling comes into the markets. If those levels get exceeded look for the indexes to test once more last week highs before the session is over.
There is support at 1281.00-1279.50 on the E-mini SP, 1870.50-1868.75 on the Nasdaq and 738.10-737.20 on the E-mini Russell. If the indexes do not hold those levels, in particular on the Nasdaq, be ready for additional weakness that push down prices to the next levels at 1277.00-1276.50 on the SP, 1864.00-1863.00 on the Nasdaq and 735.10-734.40 on the Russell. Those areas are extremely important and should hold the first time the indexes get there, however, if buyers do not step in there look for additional weakness that push the indexes lower to 1272.00-1270.75 on the SP, 1859.00-1857.50 on the Nasdaq and 731.00-730.70 on the Russell before buyers jump strong in to the scene. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 1300.75-1303.00 1910.00-1911.75 755.30-757.70
Resistance 3 1294.00-1295.50 1895.00-1897.50 748.80-750.70
Resistance 2 1289.50-1291.00 1886.00-1888.00 745.30-745.80
Resistance 1 1284.00-1285.50 1879.50-1882.00 741.70-742.70
PIVOT 1287.25 1883.50 740.70
Support 1 1281.00-1279.50 1870.50-1868.75 738.10-737.20
Support 2 1277.00-1276.50 1864.00-1863.00 735.10-734.40
Support 3 1272.00-1270.75 1859.00-1857.50 731.00-730.70
Support 4 1264.00-1262.50 1852.50-1851.50 727.70-726.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
1324.70 1973.53 762.28
1320.80 1963.97 759.92
1314.50 1948.50 756.10
1308.20 1933.03 752.28
1304.30 1923.47 749.92
1298.00 1908.00 746.10
1291.70 1892.53 742.28
1289.75 1887.75 741.10
1287.80 1882.97 739.92
1281.50 1867.50 736.10
1275.20 1852.03 732.28
1271.30 1842.47 729.92
1265.00 1827.00 726.10
1258.70 1811.53 722.28
1254.80 1801.97 719.92
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 1290.25 1891.50 743.00
AS DAILY LOW 1273.75 1851.00 733.00
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.