Arturo Stern
09-05-2008, 01:13 PM
DAILY TRADING ADVISORY 05-September-2008
Markets plummet more than 3% on retailers weakened demand and higher than expected Initial and Continuing jobless claims. ISM Services Index rose to 50.6, better than expected.
ECONOMIC DATA
8:30 AM Average Workweek
8:30 AM Hourly Earnings
8:30 AM Unemployment Rate
8:30 AM Nonfarm Payrolls
YESTERDAY’S MARKETS
The U.S. markets opened lower and never looked back. The E-mini SP opened at 1265.75 and bounced to 1268.00 during the first minutes of the session after a test of the key support levels at 1263.00-1261.00. Another bounce to the 1268.00 level failed to break higher. Once the opening lows failed to hold the downside pressure, the carnage began. The E-mini SP sold off strongly reaching 1252.00 from where the index bounced a couple of points just to get sold reaching 1247.75. As the other indexes found support, the SP bounced back up to 1252.00 where it failed once more to create some upside momentum and pushed down strong to new lows testing the 1242.00 area. Another two point bounce resulted in another selling opportunity as the markets continued to collapse. The E-mini SP reached 1236.50 while the E-mini Nasdaq reached 1781.00 and the Dow plummet by more than 300 points making its intraday lows at 11190. Finally some short covering came into the markets pushing the SP to 1245.75 from where the index pulled back to 1240.50 bounced once more near the 1244.00 area and pushed lower to 1238.00. Once the E-mini Nasdaq made new daily lows, the SP pushed also down making new lows into the end of the session. For the day, the SP ended lower 39.00 points at 1236.25, the Nasdaq plunged 58.75 points ending the session at 1775.50 and the Russell lost 22.30 points and settled at 719.60. The Dow nose dived losing in the session 344 points closing the day at 11188.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” The weakness on the Nasdaq may be near to the end if the markets will turn up and go for the expected test of the 1320.00-1340.00 on the SP, that is the normal pattern of trading, the index have moved down testing the KEY SUPPORT levels just above the 1260.00, if the countertrend move in this bear market will take place now, the SP should hold during today’s session, maybe in another consolidation day, and then rally for the next 8-11 sessions reaching the quoted upside objective before another downside strong move is seen. However, for this to happen, the E-mini Nasdaq will have to join the move or even with the strength on the Russell, the indexes finally will give up and move lower, if not to my expected 1180.00 area, at least to levels around 1230.00. Everything can happen during today’s trading session, another consolidation, some short covering in front of tomorrow’s unemployment figures or additional weakness that creates some panic for today and tomorrow. Under this uncertainty, assuming that the SP should continue to consolidate Tuesday’s reversal, trading both sides of the range sounds logic, and only if the index breaks yesterday’s range then going with the trend could be the easiest money to be done. On the Dow, things look more simple, 11550 on the upside and 11400 on the downside for the next directional move. So, for today’s trading session trading yesterday’s range 1265.00-1281.00, selling near the highs and buying near the lows, with tight stops will be the way to go, unless the SP break outside this range.”
Well, the markets finally broke and the indexes showed a “mini crash”. Once yesterday’s lows were broken and the Dow failed to hold 11400, the move was furious and fast with sellers pressing the indexes ending any bullish expectation. Yesterday’s collapse should be overdone and may already priced a “bad” jobs report that will be released today before the opening, however any long should be considered dangerous as the downtrend is very strong. The July 28th low at 1233.10 will have to hold or another panic sell off like the one we saw today, once the SP traded below the 1260.00’s could be seen. If that happens and the SP trades below that area without bouncing almost immediately, and the 11100 area on the Dow does not hold, testing the 1180.00 level that I have been mentioning on my newsletter will be seen before any short covering rally last more than a few hours. Yesterday’s huge fall will have to get consolidated if not today, then on Monday’s session, and, despite the fact that could be, that the bear campaign has resumed, the indexes should bounce for a 1-3 consolidation during the next 48 hours unless we are in a capitulation move that will break below the July 15 low.
For today’s trading session, who knows what will be the impact of the jobs market data, if it is already priced in yesterday’s sell off, the indexes should hold the Globex lows that at the moment that I am writing my report shows 1226.00 on the SP, if the initial reaction moves the SP lower for a successful test of this low, a good rally could drive the index back up to 1244.00 and the consolidated for a few days, however, if the Globex low gets broken by more than 5 points, then the 1200.00 area could be seen in a bloody Friday. Keep in mind that only if the SP trades above 1249.50 we could see yesterday’s late short running for cover. Any day trade should be done with very tight stops as swings could get wild.
TODAY’S SESSION
There is resistance below yesterday’s late highs at 1240.00-1242.00 on the E-mini SP, 1781.00-1782.00 on the E-mini Nasdaq and 722.30-724.50 on the E-mini Russell. If those get exceeded, look for additional resistance at 1244.50-1245.25 on the SP, 1788.00-1789.50 on the Nasdaq and 727.40-728.00 on the Russell. Getting there will offer a great shorting opportunity, however if the market is strong, then testing the KEY resistance areas at 1249.75-1251.00 on the SP, 1804.50-1806.00 on the Nasdaq and 733.00-734.40 could be seen before the session is over. Trading above those levels will negate the short term collapse and place the indexes on their way to the 1261.00-1263.00 level on the SP before the selling resumes.
There is support at 1232.00-1230.50 on the SP, 1770.00-1768.25 on the Nasdaq and 717.10-716.00 on the Russell. Those will have to hold or we could see a melt down move, if that happens look for strong support at 1224.25-1222.50 on the SP, 1763.50-1761.50 on the Nasdaq and 713.00-711.50 on the Russell. Buyers should be standing in line to get in at those levels and the indexes should not spend too much time there, however, if those areas e not strongly bided look for the downside pressure to continue reaching 1216.00-1214.00 on the SP, 1754.25-1752.00 on the Nasdaq and 709.00-707.80 on the Russell. If the markets trade below those levels, the markets should continue in their capitulation move. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 1256.75-1258.00 1812.00-1814.00 737.00-738.20
Resistance 3 1249.75-1251.00 1804.50-1806.00 733.00-734.40
Resistance 2 1244.50-1245.25 1788.00-1790.50 727.40-728.00
Resistance 1 1240.00-1242.00 1781.00-1782.00 722.30-724.50
PIVOT 1249.50 1795.75 726.20
Support 1 1232.00-1230.50 1770.00-1768.25 717.10-716.00
Support 2 1224.25-1222.50 1763.50-1761.50 713.00-711.50
Support 3 1216.00-1214.00 1754.25-1752.00 709.00-707.80
Support 4 1207.50-1205.00 1740.00-1741.00 704.20-703.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
1344.96 1936.32 788.97
1335.04 1921.68 782.33
1319.00 1898.00 771.60
1302.96 1874.32 760.87
1293.04 1859.68 754.23
1277.00 1836.00 743.50
1260.96 1812.32 732.77
1256.00 1805.00 729.45
1251.04 1797.68 726.13
1235.00 1774.00 715.40
1218.96 1750.32 704.67
1209.04 1735.68 698.03
1193.00 1712.00 687.30
1176.96 1688.32 676.57
1167.04 1673.68 669.93
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 1256.75 1806.00 731.60
AS DAILY LOW 1214.75 1743.75 703.50
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.
Markets plummet more than 3% on retailers weakened demand and higher than expected Initial and Continuing jobless claims. ISM Services Index rose to 50.6, better than expected.
ECONOMIC DATA
8:30 AM Average Workweek
8:30 AM Hourly Earnings
8:30 AM Unemployment Rate
8:30 AM Nonfarm Payrolls
YESTERDAY’S MARKETS
The U.S. markets opened lower and never looked back. The E-mini SP opened at 1265.75 and bounced to 1268.00 during the first minutes of the session after a test of the key support levels at 1263.00-1261.00. Another bounce to the 1268.00 level failed to break higher. Once the opening lows failed to hold the downside pressure, the carnage began. The E-mini SP sold off strongly reaching 1252.00 from where the index bounced a couple of points just to get sold reaching 1247.75. As the other indexes found support, the SP bounced back up to 1252.00 where it failed once more to create some upside momentum and pushed down strong to new lows testing the 1242.00 area. Another two point bounce resulted in another selling opportunity as the markets continued to collapse. The E-mini SP reached 1236.50 while the E-mini Nasdaq reached 1781.00 and the Dow plummet by more than 300 points making its intraday lows at 11190. Finally some short covering came into the markets pushing the SP to 1245.75 from where the index pulled back to 1240.50 bounced once more near the 1244.00 area and pushed lower to 1238.00. Once the E-mini Nasdaq made new daily lows, the SP pushed also down making new lows into the end of the session. For the day, the SP ended lower 39.00 points at 1236.25, the Nasdaq plunged 58.75 points ending the session at 1775.50 and the Russell lost 22.30 points and settled at 719.60. The Dow nose dived losing in the session 344 points closing the day at 11188.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote:” The weakness on the Nasdaq may be near to the end if the markets will turn up and go for the expected test of the 1320.00-1340.00 on the SP, that is the normal pattern of trading, the index have moved down testing the KEY SUPPORT levels just above the 1260.00, if the countertrend move in this bear market will take place now, the SP should hold during today’s session, maybe in another consolidation day, and then rally for the next 8-11 sessions reaching the quoted upside objective before another downside strong move is seen. However, for this to happen, the E-mini Nasdaq will have to join the move or even with the strength on the Russell, the indexes finally will give up and move lower, if not to my expected 1180.00 area, at least to levels around 1230.00. Everything can happen during today’s trading session, another consolidation, some short covering in front of tomorrow’s unemployment figures or additional weakness that creates some panic for today and tomorrow. Under this uncertainty, assuming that the SP should continue to consolidate Tuesday’s reversal, trading both sides of the range sounds logic, and only if the index breaks yesterday’s range then going with the trend could be the easiest money to be done. On the Dow, things look more simple, 11550 on the upside and 11400 on the downside for the next directional move. So, for today’s trading session trading yesterday’s range 1265.00-1281.00, selling near the highs and buying near the lows, with tight stops will be the way to go, unless the SP break outside this range.”
Well, the markets finally broke and the indexes showed a “mini crash”. Once yesterday’s lows were broken and the Dow failed to hold 11400, the move was furious and fast with sellers pressing the indexes ending any bullish expectation. Yesterday’s collapse should be overdone and may already priced a “bad” jobs report that will be released today before the opening, however any long should be considered dangerous as the downtrend is very strong. The July 28th low at 1233.10 will have to hold or another panic sell off like the one we saw today, once the SP traded below the 1260.00’s could be seen. If that happens and the SP trades below that area without bouncing almost immediately, and the 11100 area on the Dow does not hold, testing the 1180.00 level that I have been mentioning on my newsletter will be seen before any short covering rally last more than a few hours. Yesterday’s huge fall will have to get consolidated if not today, then on Monday’s session, and, despite the fact that could be, that the bear campaign has resumed, the indexes should bounce for a 1-3 consolidation during the next 48 hours unless we are in a capitulation move that will break below the July 15 low.
For today’s trading session, who knows what will be the impact of the jobs market data, if it is already priced in yesterday’s sell off, the indexes should hold the Globex lows that at the moment that I am writing my report shows 1226.00 on the SP, if the initial reaction moves the SP lower for a successful test of this low, a good rally could drive the index back up to 1244.00 and the consolidated for a few days, however, if the Globex low gets broken by more than 5 points, then the 1200.00 area could be seen in a bloody Friday. Keep in mind that only if the SP trades above 1249.50 we could see yesterday’s late short running for cover. Any day trade should be done with very tight stops as swings could get wild.
TODAY’S SESSION
There is resistance below yesterday’s late highs at 1240.00-1242.00 on the E-mini SP, 1781.00-1782.00 on the E-mini Nasdaq and 722.30-724.50 on the E-mini Russell. If those get exceeded, look for additional resistance at 1244.50-1245.25 on the SP, 1788.00-1789.50 on the Nasdaq and 727.40-728.00 on the Russell. Getting there will offer a great shorting opportunity, however if the market is strong, then testing the KEY resistance areas at 1249.75-1251.00 on the SP, 1804.50-1806.00 on the Nasdaq and 733.00-734.40 could be seen before the session is over. Trading above those levels will negate the short term collapse and place the indexes on their way to the 1261.00-1263.00 level on the SP before the selling resumes.
There is support at 1232.00-1230.50 on the SP, 1770.00-1768.25 on the Nasdaq and 717.10-716.00 on the Russell. Those will have to hold or we could see a melt down move, if that happens look for strong support at 1224.25-1222.50 on the SP, 1763.50-1761.50 on the Nasdaq and 713.00-711.50 on the Russell. Buyers should be standing in line to get in at those levels and the indexes should not spend too much time there, however, if those areas e not strongly bided look for the downside pressure to continue reaching 1216.00-1214.00 on the SP, 1754.25-1752.00 on the Nasdaq and 709.00-707.80 on the Russell. If the markets trade below those levels, the markets should continue in their capitulation move. GOOD LUCK.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 1256.75-1258.00 1812.00-1814.00 737.00-738.20
Resistance 3 1249.75-1251.00 1804.50-1806.00 733.00-734.40
Resistance 2 1244.50-1245.25 1788.00-1790.50 727.40-728.00
Resistance 1 1240.00-1242.00 1781.00-1782.00 722.30-724.50
PIVOT 1249.50 1795.75 726.20
Support 1 1232.00-1230.50 1770.00-1768.25 717.10-716.00
Support 2 1224.25-1222.50 1763.50-1761.50 713.00-711.50
Support 3 1216.00-1214.00 1754.25-1752.00 709.00-707.80
Support 4 1207.50-1205.00 1740.00-1741.00 704.20-703.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
1344.96 1936.32 788.97
1335.04 1921.68 782.33
1319.00 1898.00 771.60
1302.96 1874.32 760.87
1293.04 1859.68 754.23
1277.00 1836.00 743.50
1260.96 1812.32 732.77
1256.00 1805.00 729.45
1251.04 1797.68 726.13
1235.00 1774.00 715.40
1218.96 1750.32 704.67
1209.04 1735.68 698.03
1193.00 1712.00 687.30
1176.96 1688.32 676.57
1167.04 1673.68 669.93
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 1256.75 1806.00 731.60
AS DAILY LOW 1214.75 1743.75 703.50
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.