GDP lower than expected and increase of 19,000 applications for unemployment claims and new fears of more bank failures kept the indexes under pressure for most of the session.
ECONOMIC DATA8:30 AM Personal Income8:30 AM Personal Spending8:30 AM Core PCE Inflation8:30 AM Core PCE Prices9:45 AM Chicago PMI10:00 AM Michigan sentiment- Rev
YESTERDAY’S MARKETSThe E-mini S&P futures opened the day with early weakness and bounced back to 1374.00 during the first minutes of the session. A pullback to 1368.50, just below our support area, printed a double bottom after reaching the opening lows and the index bounced back once more to 1374.00. After trading sideways between the 1371.00-1374.00 area, the E-mini S&P finally rallied to new highs and got to the 1378.00 area joined in the move but the E-mini Nasdaq that tested the 1812.00 area. With Bernanke speaking for a second day, and in direct response to his speech, the indexes started to move lower making its daily lows at 1363.50 on the E-mini S&P,1788.50 on the E-mini Nasdaq and 701.70 on the E-mini Russell. Back and forth action with higher lows on the intraday chart resulted in a short covering rally that took the E-mini S&P back up to 1370.50, where another pullback to 1365.00 was bought and the index rallied all the way to 1374.75. Unable to break higher, shorts came in back and pushed the index down into the close at 1365.75 on the E-mini S&P, a new low at 1784.25 on the E-mini Nasdaq and 703.50 on the E-mini Russell. The cash Dow closed near the lows of the session giving back 112 points and settling at 12,582.
MARKET COMMENTARY AND OUTLOOKYesterday I wrote: “The index should be considered in a mild uptrend all the time that it does not close below the 1363.00-1364.00 pivotal area and a pullback to that zone should be seen as a buying opportunity, but the lack of commitment reflected on extremely low volumes and the lagging E-mini Nasdaq does not confirm yet a possible and definitive break out the wide trading range. It will be extremely important that during today’s session even if the market makes a move lower that it keeps trading in a sideways consolidation pattern, which is what I am expecting, so both sides of the market should be tradable, that means sell once the rally stalls against resistance and buy once the downside momentum lose its steam.”
The market gave us what we were looking for as the early weakness near our support areas triggered our buying signal for our real time subscribers, then the index rallied back up to our resistance area, sold off strongly printing its lows at 1363.50 and propelling a new rally to 1375.00.
The markets keeps trading in a wide range where higher lows and lower highs on the daily chart has respected the resistance and support areas in the triangle formation, but yesterday’s failure to move higher and the weak close put in jeopardy the rally that started last Friday. With a lot of economic data to be released today on the early going, and with the expectation that it won’t shows weakness on the economy, an early sell off could be seen. The important factor will be if the markets are capable to come back from bellow the 1360.00 area and print a low between today and next Monday. If the indexes are ready to move higher during the coming sessions, a good rally must be seen on the E-mini Nasdaq and a break through the 725.00 double top on the E-mini Russell must happen, otherwise, the consolidation move on the E-mini SP will start to look problematic.
The key for today’s session will be how the first hour lows are printed, if they are close or near to our second and third support, and hold during the hour of trading, the E-mini SP should be able to bounce back up and maybe reach the 1373.00-1374.50 area, but if those lows can not hold, the daily trend will be definitely to the downside with the risk of a serious sell off. I will watch closely for a double bottom near last Friday’s close at 1355.50 for signs of a good rally, and I will considered confirmed once the index breaks solidly above yesterday’s settlement.
TODAY’S SESSIONFor today’s trading roadmap and intraday updates, please read the authors bio
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P
NASDAQ
RUSSELL
Resistance 3
1386.00-1388.00
1820.00-1822.00
721.60-723.00
Resistance 2
1378.00-1379.50
1801.00-1803.00
712.50-714.00
Resistance 1
1373.00-1374.50
1789.00-1792.00
707.90-709.00
PIVOT
1370.25
1793.00
707.50
Support 1
1364.00-1362.50
1781.00-1780.00
702.10-700.60
Support 2
1356.00-1355.00
1773.00-1772.00
695.00-694.00
Support 3
1351.00-1350.00
1763.00-1761.00
691.00-688.50
S&P
NASDAQ
RUSSELL
FIBONACCI
FIBONACCI
FIBONACCI
1410.62
1859.98
742.54
1406.38
1853.02
738.86
1399.50
1841.75
732.90
1392.62
1830.48
726.94
1388.38
1823.52
723.26
1381.50
1812.25
717.30
1374.62
1800.98
711.34
1372.50
1797.50
709.50
1370.38
1794.02
707.66
1363.50
1782.75
701.70
1356.62
1771.48
695.74
1352.38
1764.52
692.06
1345.50
1753.25
686.10
1338.62
1741.98
680.14
1334.38
1735.02
676.46
DAILY PROJECTIONS
S&P
NASDAQ
RUSSELL
AS DAILY HIGH
1373.75
1798.25
710.40
AS DAILY LOW
1355.75
1768.75
694.80
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
Futures and options trading involve risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. 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.
