WEEKLY PIVOTS FOR WEEK ENDING 30-NOVEMBER-2007
R3 1514.75
R2 1490.25
R1 1466.00
PP 1441.50
S1 1417.50
S2 1392.75
S3 1368.75
ECONOMIC CALENDAR: NONE
I apologize for the extension of this report as a brief description of the past trading sessions that I did not posted my report last week are included.
LAST TUESDAY SESSION
After a strong night session that pushed the indexes higher before the opening bell, and despite the housing data that came out as expected, the indexes gave up their earnings before the kick off. After a flat opening players boosted the E-mini SP futures to 1452.50, a four point pullback was bought and the E-mini SP futures rallied to 1456.50 while the E-mini Nasdaq printed the 2073.00 on the charts and the E-mini Russell futures got as high as 759.30.I wrote yesterday:" 1455.50-1457.50 on the E-mini SP futures and 2068.75-2070.50 on the E-mini Nasdaq futures should be reached. Those areas could be a good set up for a short entry", I also broadcast an update for my E-mini SP REAL TIME subscribers that says "This has been a strong rally but resistance has been working well for the E-mini Russell futures this can change if it trades above 760.70. My resistance levels have worked also just fine for the E-mini SP futures at 1455.50-1457.50, this area is goo d for a short entry with tight stops". These highs were strongly rejected and once the market broke bellow the pivot points, buyers run out to the exit. On a steady decline the E-mini SP futures drop to the Monday's low at 1527.50 while the E-mini Russell futures collapsed to its August lows at 736.70.
The release of the Federal Open Market Committee minutes pushed the indexes back up to 1438.00 on the E-mini SP futures and 748.00 on the E-mini Russell futures. Once more, selling came in and with the help of the E-mini Nasdaq futures the E-mini SP reached 1422.00. On Mondays report, I refer to this 1422.00 level as my downside objective for this leg down: "the 1423.00 level on the E-mini SP futures and the 12850-12800 on the E-mini Dow futures could be a nice objective for this leg down." Yesterday I wrote: "sentiment should produce a temporary low if we get a downside spike, the ideal objective would be around 1421.00". After making this low the market traded on a volatile way but after breaking my updated resistance at 1438.50 the index rallied back just bellow the 1450.00.
CONCLUSION: All the indexes retreated to levels not seen since the middle of August, but they reversed strongly to the upside late in the session and closed higher for the day.
LAST WEDNESDAY SESSION
The market gapped down at the opening and struggled during the first hour to hold the previous support area at 1426.00-1427.00 on the E-mini SP futures. After a weak rally to 1434.25 on the E-mini SP futures and 2024.00 on the E-mini Nasdaq futures, sellers came in and turned the indexes down. The E-mini SP futures reached 1418.25 as the E-mini Nasdaq futures met the November 12 lows around 1492.00. The double bottom seen on the NQ was bought and the indexes rallied in to the middle of the day getting as high as 1438.50 on the E-mini SP futures and 2043.00 on the E-mini Nasdaq futures. The E-mini Russell showed very strong support on the 737.50 area and rallied all the way back to 750.70. Once more, the E-mini SP futures pulled back to the 1427.00 area which was bought and a steady rally took the index to a marginal new high. The indexes showed weakness and the rally failed as the double tops were met with strong intraday selling pace droving the E-mini SP futures to a new low at 1417.00 and the E-mini Nasdaq futures and E-mini Russell futures near to the daily lows. The E-mini Nasdaq futures is still holding its range area but the triangle is getting tighter, and the consolidation at the lows could indicate a down break during the next week. This break could lead all the indexes to a test of the August lows.
CONCLUSION
Unable to show a pre Thanksgiving Day rally all the indexes closed at their lows indicating some kind of exhaustion. Last time that the closing prices were at the lows the markets improved during the next session. Today's volume was 42% above the average of the last three months. Although the Dow CASH has broken bellow its long term trend line, 12800 has shown support during the year, and probably will try to get back to the 13000 benchmark.
LAST FRIDAY SESSION AND TODAY'S DAILY TRADING ADVISORY
As I wrote on my personal trading diary, Wednesday's close at the lows showed some extremely oversold and exhaustion for the last leg down. The E-mini SP futures as all the other indexes gapped up at the opening and rally all Friday's session on an up trend day. It will not be unusual to see a 1-4 countertrend move before the downside strong move pick up once again, and I presume that the trapped shorts at Wednesday's lows and bottom fishers could end the gas on the tank faster than that. The E-mini Russell futures showed a robust bounce from its support at 737.50 and the E-mini Nasdaq futures remains range bounded.
Friday's close above the 1440.00 on the E-mini SP futures looks like a turning point for the markets, but don't get distract, the downtrend has not ended yet and there is still a risk of a crash.
For those holding a medium term short position, the E-mini SP futures should be able to reach at least the August lows before a second-degree correction (7-11 days) rally starts. Short term snap backs or impulsive and parabolic rallies that seems to be the real thing, are common in a down trend, and the size of this rebound from the 1417.00 low on the E-mini SP futures and the 737.00 level on the E-mini Russell futures should dictate the extension of the next move down.
The previous rally was 55 points, and adding 55 points to the 1417.00 low on the E-mini SP futures take us to the 1472.00 area, so if this is a 1-4 days countertrend rally it should not exceed this level and could be a great set up for a +-100 points drop taking the index down to the August lows around the 1370 level.
For today, and early pop that reaches the 1455.00-1456.25 area on the E-mini SP futures should be sold for a 12-16 points pullback, and if the market is in good shape buyers must step in around Friday's settlement.
We have initial resistance at 1449.25-1451.25 on the E-mini SP futures and 2035.00-2037.00 on the E-mini Nasdaq futures, if the market opens above those areas the early move should get reversed at 1455.00-1456.25 on the E-mini SP futures and 2049.00-2050.00 on the E-mini Nasdaq futures. If those cannot hold we could see the 1460.50-1462.50 on the E-mini SP futures and 2073.00-2075.50 on the E-mini Nasdaq futures. Above those levels, look for the rally to fail around 1468.50-1470.00 on the E-mini SP futures.
We have initial support just above our pivot at 1438.00-1437.00 on the E-mini SP futures and 2015.00-2013.75 on the E-mini Nasdaq futures. Those "MUST" hold if the counter-trend move will be longer than 1 and a half day, but if those are busted, especially after the first two hours of trading, then the upside move could be over, and the next good support areas are at 1429.00-1427.50 on the E-mini SP futures and 1996.50-1995.00 on the E-mini Nasdaq futures should be reached. If the move doesn't get reversed from these lows the last support areas are at 1417.00-1416.00 on the E-mini SP futures and 1986.50-1984.00 on the E-mini Nasdaq futures. Good luck.
NOTE: In an additional effort to offer the best trading tools for our friends and clients, in the coming days we are going to add a new tool: Daily projected high and low for the E-mini SP, Nasdaq and Russell, a key projection numbers for traders, wait for this surprise.
TODAY'S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P
Nasdaq
RUSSELL
Resistance 3
1460.00-1462.50
2073.00-2075.50
769.70-771.50
Resistance 2
1455.00-1456.25
2049.00-2050.00
764.80-765.70
Resistance 1
1449.25-1451.25
2035.00-2037.00
757.10-759.20
PIVOT
1436.50
2028.50
752.50
Support 1
1438.00-1437.00
2015.00-2013.75
750.80-748.60
Support 2
1429.00-1427.50
1996.50-1995.00
742.30-741.50
Support 3
1417.00-1416.00
1986.50-1984.00
735.10-734.30
S&P
Nasdaq
RUSSELL
FIBONACCI
FIBONACCI
FIBONACCI
1486.07
2086.19
798.78
1479.93
2079.06
793.32
1470.00
2067.50
784.50
1460.07
2055.94
775.68
1453.93
2048.81
770.22
1444.00
2037.25
761.40
1434.07
2025.69
752.58
1431.00
2022.13
749.85
1427.93
2018.56
747.12
1418.00
2007.00
738.30
1408.07
1995.44
729.48
1401.93
1988.31
724.02
1392.00
1976.75
715.20
1382.07
1965.19
706.38
1375.93
1958.06
700.92
Arturo Stern is a market analyst for equity index futures and the author of the "Daily Trading Advisory" newsletter and other advisory tools for stock index futures traders. E-mail him at arthur@theminitrade.com or visit his website at www.TheMiniTrade.com.
