Arturo Stern
09-24-2008, 07:13 AM
DAILY TRADING ADVISORY 24-September-2008
Markets continue to mover lower as Paulson and Bernanke fail to sell their bailout plan at Congress. Berkshire buys a $7 billion stake at Goldman Sacks.
ECONOMIC DATA
10:00 AM Existing Home Sales
10:35 AM Crude Inventories
YESTERDAY’S MARKETS
Stocks ended lower on a rollercoaster session that was influenced by the testimony of Bernanke and Paulson at Congress. The E-mini SP opened the session at 1212.00 moving up reaching the 122.00 area from where it pulled back holding 1213.00. Another bouncing attempt resulted in a double top and as the testimony at Congress started markets started to sell off with the SP reaching 1206.00. The index bounced 10 point pushing up to 1216.00 where sellers stepped in strong and pushed the index back down to 1206.00. A feeble bounce did not manage to break up and the index sold off all the way down to 1187.75. The E-mini SP bounced 4 points, tested the lows breaking them only by one point and in a huge reversal rallied all the way back up to 1216.00 where the rally stalled. Just as the last hour of the session started, all the indexes collapsed printing new daily lows on the charts. For the day, the SP lost 26.75 points and settled at 1187.00, the Nasdaq closed the session at 1650.50, minus 19.25 points and the Russell was down 14.90 points and finished the day at 704.20. The Dow gave back 161points closing the day at 10854.
MARKET COMMENTARY AND OUTLOOK
Last Friday I wrote:” Yesterday’s fill of the gap give markets a chance to consolidate the huge moves seen during the last trading sessions, but under the current volatility and scary conditions wide range days seem normal. If the SP will start to consolidate near the lows, together with the Dow below the 11200 area, I will expect that the 1133.00 low on the SP will be visit in the near term. On the other side of the coin we could see some action between yesterday’s lows and highs until the markets decide their next move. The 1224.00-1225.00 area look pivotal for today’s trading session and if those are exceeded a good rally could be underway, but all the time that the SP is trading below them, the best we can expect is the index to hold yesterday’s lows. Yesterday’s reversal has posted a mid term top for this countertrend rally and the markets should be considered to move lower on the long term all the time that does highs remain intact. On an intervened market its very difficult to analyze traditional behavior in similar past patterns, but everything indicate that the bear campaign has not been completed yet and another 2-3 days rally that fails near yesterday’s highs could set up a great trading opportunity that could translate in catching a move of at least 150 points, obviously many players could choose to take a risk buy buying a put option instead of selling a futures contract that under the current circumstances not only can cost a lot of money but also health. So for today’s trading session, watch closely the 1200 area that should offer very good support at least the first time that it gets tested, and follow how the SP reacts to the 1224.00 level which is pivotal for a 2-3 day countertrend move.”
The early failure of the SP to break above the critical 1224.00 area placed the markets on a difficult situation on a nervous session guided by the hearings at the Congress. Yesterday’s top, lower high and late reversal after the short covering rally indicates the indecision and lack of direction that the indexes have at this moment. The SP has already retraced 100 points from Friday’s highs, and if yesterday’s lows are not a higher low that give the markets a chance to build a triangle pattern during the next sessions, then the SP could go for the 1133.00 area or lower. This is a news guided market where every piece off information results in huge daily and nightly moves that at this point does not permit traders to maintain a position. Who wants to go long or short for the night if every day or night markets suffer incredible reversals. Yesterday’s low seem to be critical for today’s trading session, and all the time that those lows hold the SP could go for a test of the 1250.00 area during the next few days. Today, we’ll get the release of the Existing Home Sales data and the crude inventories, and the markets will probably continue to react to every commentary at the Congress as Fed and Treasury chiefs continue in their labor to convince Congress to give them unlimited powers to increase the U.S. debt. So only if a trend is developed during the session or we have a successful test of yesterday’s lows stay for a long period on a long position, otherwise don’t extend your visits to the long side. On the other side of the coin, an early rally that fails at the current 1210.00 Globex highs could give us a good short entry, that level is pivotal for today’s trading session.
So for today’s trading session, look for opportunities on both sides of the markets unless the session managed to develop a trend session with an upside bias.
TODAY’S SESSION
For today’s trading roadmap and intraday updates, please read the authors bio.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 1212.00-1213.50 1685.00-1687.25 727.10-728.50
Resistance 3 1206.00-1208.00 1676.00-1678.00 719.50-721.00
Resistance 2 1198.00-1199.75 1665.00-1666.75 715.50-716.30
Resistance 1 1193.00-1194.50 1655.00-1657.50 708.50-710.00
PIVOT 1198.50 1666.50 711.50
Support 1 1184.00-1183.00 1642.00-1640.00 702.10-699.90
Support 2 1180.00-1178.50 1635.00-1633.50 696.30-694.80
Support 3 1174.00-1172.00 1628.00-1626.00 691.40-690.30
Support 4 1166.50-1165.00 1620.00-1618.00 685.00-683.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
1283.02 1789.12 764.34
1274.23 1776.38 758.86
1260.00 1755.75 750.00
1245.77 1735.12 741.14
1236.98 1722.38 735.66
1222.75 1701.75 726.80
1208.52 1681.12 717.94
1204.13 1674.75 715.20
1199.73 1668.38 712.46
1185.50 1647.75 703.60
1171.27 1627.12 694.74
1162.48 1614.38 689.26
1148.25 1593.75 680.40
1134.02 1573.12 671.54
1125.23 1560.38 666.06
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 1204.00 1676.00 715.50
AS DAILY LOW 1167.00 1622.00 692.30
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 continue to mover lower as Paulson and Bernanke fail to sell their bailout plan at Congress. Berkshire buys a $7 billion stake at Goldman Sacks.
ECONOMIC DATA
10:00 AM Existing Home Sales
10:35 AM Crude Inventories
YESTERDAY’S MARKETS
Stocks ended lower on a rollercoaster session that was influenced by the testimony of Bernanke and Paulson at Congress. The E-mini SP opened the session at 1212.00 moving up reaching the 122.00 area from where it pulled back holding 1213.00. Another bouncing attempt resulted in a double top and as the testimony at Congress started markets started to sell off with the SP reaching 1206.00. The index bounced 10 point pushing up to 1216.00 where sellers stepped in strong and pushed the index back down to 1206.00. A feeble bounce did not manage to break up and the index sold off all the way down to 1187.75. The E-mini SP bounced 4 points, tested the lows breaking them only by one point and in a huge reversal rallied all the way back up to 1216.00 where the rally stalled. Just as the last hour of the session started, all the indexes collapsed printing new daily lows on the charts. For the day, the SP lost 26.75 points and settled at 1187.00, the Nasdaq closed the session at 1650.50, minus 19.25 points and the Russell was down 14.90 points and finished the day at 704.20. The Dow gave back 161points closing the day at 10854.
MARKET COMMENTARY AND OUTLOOK
Last Friday I wrote:” Yesterday’s fill of the gap give markets a chance to consolidate the huge moves seen during the last trading sessions, but under the current volatility and scary conditions wide range days seem normal. If the SP will start to consolidate near the lows, together with the Dow below the 11200 area, I will expect that the 1133.00 low on the SP will be visit in the near term. On the other side of the coin we could see some action between yesterday’s lows and highs until the markets decide their next move. The 1224.00-1225.00 area look pivotal for today’s trading session and if those are exceeded a good rally could be underway, but all the time that the SP is trading below them, the best we can expect is the index to hold yesterday’s lows. Yesterday’s reversal has posted a mid term top for this countertrend rally and the markets should be considered to move lower on the long term all the time that does highs remain intact. On an intervened market its very difficult to analyze traditional behavior in similar past patterns, but everything indicate that the bear campaign has not been completed yet and another 2-3 days rally that fails near yesterday’s highs could set up a great trading opportunity that could translate in catching a move of at least 150 points, obviously many players could choose to take a risk buy buying a put option instead of selling a futures contract that under the current circumstances not only can cost a lot of money but also health. So for today’s trading session, watch closely the 1200 area that should offer very good support at least the first time that it gets tested, and follow how the SP reacts to the 1224.00 level which is pivotal for a 2-3 day countertrend move.”
The early failure of the SP to break above the critical 1224.00 area placed the markets on a difficult situation on a nervous session guided by the hearings at the Congress. Yesterday’s top, lower high and late reversal after the short covering rally indicates the indecision and lack of direction that the indexes have at this moment. The SP has already retraced 100 points from Friday’s highs, and if yesterday’s lows are not a higher low that give the markets a chance to build a triangle pattern during the next sessions, then the SP could go for the 1133.00 area or lower. This is a news guided market where every piece off information results in huge daily and nightly moves that at this point does not permit traders to maintain a position. Who wants to go long or short for the night if every day or night markets suffer incredible reversals. Yesterday’s low seem to be critical for today’s trading session, and all the time that those lows hold the SP could go for a test of the 1250.00 area during the next few days. Today, we’ll get the release of the Existing Home Sales data and the crude inventories, and the markets will probably continue to react to every commentary at the Congress as Fed and Treasury chiefs continue in their labor to convince Congress to give them unlimited powers to increase the U.S. debt. So only if a trend is developed during the session or we have a successful test of yesterday’s lows stay for a long period on a long position, otherwise don’t extend your visits to the long side. On the other side of the coin, an early rally that fails at the current 1210.00 Globex highs could give us a good short entry, that level is pivotal for today’s trading session.
So for today’s trading session, look for opportunities on both sides of the markets unless the session managed to develop a trend session with an upside bias.
TODAY’S SESSION
For today’s trading roadmap and intraday updates, please read the authors bio.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P NASDAQ RUSSELL
Resistance 4 1212.00-1213.50 1685.00-1687.25 727.10-728.50
Resistance 3 1206.00-1208.00 1676.00-1678.00 719.50-721.00
Resistance 2 1198.00-1199.75 1665.00-1666.75 715.50-716.30
Resistance 1 1193.00-1194.50 1655.00-1657.50 708.50-710.00
PIVOT 1198.50 1666.50 711.50
Support 1 1184.00-1183.00 1642.00-1640.00 702.10-699.90
Support 2 1180.00-1178.50 1635.00-1633.50 696.30-694.80
Support 3 1174.00-1172.00 1628.00-1626.00 691.40-690.30
Support 4 1166.50-1165.00 1620.00-1618.00 685.00-683.50
S&P NASDAQ RUSSELL
FIBONACCI FIBONACCI FIBONACCI
1283.02 1789.12 764.34
1274.23 1776.38 758.86
1260.00 1755.75 750.00
1245.77 1735.12 741.14
1236.98 1722.38 735.66
1222.75 1701.75 726.80
1208.52 1681.12 717.94
1204.13 1674.75 715.20
1199.73 1668.38 712.46
1185.50 1647.75 703.60
1171.27 1627.12 694.74
1162.48 1614.38 689.26
1148.25 1593.75 680.40
1134.02 1573.12 671.54
1125.23 1560.38 666.06
DAILY PROJECTIONS S&P NASDAQ RUSSELL
AS DAILY HIGH 1204.00 1676.00 715.50
AS DAILY LOW 1167.00 1622.00 692.30
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.