ECONOMIC CALENDAR
8:15 AM ADP Employment
8:30 AM Initial Claims
10:00 AM Factory Orders
The ISM Index came in below 50 yesterday indicating economy contraction resulting in one of the worst first trading days of the year.
The E-mini S&P futures opened right at our pivot zone but once the ISM index data was released it was sold hard testing the KEY support area at 1469.25-1467.50. An attempt to hold the lows failed and the index traded lower braking below the weekly support area at 1463.25-1461.25. The notorious weakness on the E-mini NASDAQ was too much and the E-mini S&P pushed to new lows before the FOMC minutes were released printing a low at 1451.25. A short covering rally turns the markets higher reaching 1466.50 in the E-mini S&P, 2084.00 on the E-mini NASDAQ and 765.00 on the E-mini Russell. The rally lost its momentum and once it broke below the updated support at 1455.50 it made new lows for the day at 1449.00 before bouncing back in to the close.
As I wrote yesterday: “Despite the neutral to bullish bias that the first trading day of the year usually has, the markets has been acting poorly and every higher opening or rally attempt has been met with heavy selling, and until/unless last Monday’s highs are broken to the upside the indexes remains vulnerable and may be ready for a continued erosion. The E-mini S&P continues to trade between a large triangle ranges which remain our long term primary focus and as we approach the lower support band the risk of failing to hold above it could result in a test of our weekly support at 1462.50 or lower.”
Yesterday’s heavy drop will have to be consolidated during today’s trading session, and it will be unusual to see another downtrend day as oversold extreme readings on the closing $TRIN has usually resulted in a good rally for the next trading session. All the time that the markets hold yesterday’s lows nothing bad happens, and the 1450.00 area on the E-mini S&P has acted on past rallies as a strong pivot point. Despite these circumstances, there is a lot of damage on the daily charts and the markets will have to work hard to avoid another sell-off.
The fact that the index has been sold the last four days should be consider as a first degree counter trend, but the huge move has been extremely strong and if the index can not rally more than one day the downtrend will be intact.
For today’s full report and intraday updates, please read the authors bio.
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P
NASDAQ
RUSSELL
Resistance 3
1474.00-1475.00
2093.50-2096.00
768.50-769.50
Resistance 2
1464.50-1465.50
2086.00-2088.00
763.90-765.20
Resistance 1
1460.50-1461.50
2078.00-2080.00
760.50-761.50
PIVOT
1463.50
2081.00
760.90
Support 1
1455.50-1453.75
2065.00-2063.00
756.70-754.90
Support 2
1450.50-1448.75
2053.00-2050.25
751.00-749.50
Support 3
1444.50-1443.00
2036.00-2033.00
745.50-745.00
S&P
NASDAQ
RUSSELL
FIBONACCI
FIBONACCI
FIBONACCI
1528.85
2203.11
802.73
1521.65
2189.89
798.17
1510.00
2168.50
790.80
1498.35
2147.11
783.43
1491.15
2133.89
778.87
1479.50
2112.50
771.50
1467.85
2091.11
764.13
1464.25
2084.50
761.85
1460.65
2077.89
759.57
1449.00
2056.50
752.20
1437.35
2035.11
744.83
1430.15
2021.89
740.27
1418.50
2000.50
732.90
1406.85
1979.11
725.53
1399.65
1965.89
720.97
DAILY PROJECTIONS
S&P
NASDAQ
RUSSELL
AS DAILY HIGH
1470.50
2093.50
770.40
AS DAILY LOW
1435.75
2033.00
747.70
Support, Pivot and Resistance levels courtesy of Arturo Stern. He authors the E-mini Daily trading advisory which gives technical analysis on all the major stock index futures contract. For more of his analysis go to www.theminitrade.com Arturo can be reached at arthur@theminitrade.com
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