GDP up0.6% as expected and Oracle disappointing news keep the indexes under pressure as they fail to sustain intraday gains.
ECONOMIC DATA
8:30 AM Personal Income
8:30 AM Personal Spending
YESTERDAY’S MARKETS
Stocks continue in their struggle to move down without any panic move. The E-mini S&P started the day in what it seemed to be a positive session. The index opened at 1346.00 and got sold during the first minutes of trading to the 1342.00-1340.00 support area. A feeble bounce failed to make new highs and the E-mini S&P sold off strongly reaching 1330.50 while the E-mini Nasdaq which was under pressure since the beginning of the session tested the 1796.00 level. The indexes rebounded strongly from the lows, where our updated subscribers took advantage of the lower prices entering into a great swing trade. The E-mini S&P started to move up and the short covering rally took the index back up to 1348.00 with the E-mini Nasdaq testing the pre-opening highs at 1816.50. The highs were rejected in both indexes and after failing to make new highs the downtrend resumed. The E-mini Russell tested once more the 704.00-706.00 resistance area which has been a wall to allow further advancing in this index. Once the e-mini S&P broke back below 1342.00 it was all for the bulls as the index pushed down testing 1332.75. Another short covering rally reached 1343.00 but the move was sold strongly and as in the past trading sessions the indexes got sold during the last hour of trading. The E-mini S&P made a new low at 1326.50 and the E-mini Nasdaq at 1782.75 before bouncing back into the end. The E-mini S&P settled at 1329.75, down 5.75 points, the E-mini Nasdaq at 1792.00 with a loss of 18.25 points and the E-mini Russell at 692.70 with a loss of 5.60 points during the session. The cash Dow failed to sustain the 12,400 area loosing 120 points ending the day at 12,302.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote: “We have been looking for higher prices into the end of quarter, but we have two days in a row where the markets get seriously sold during the last part of the session, and the fact that the E-mini S&P was not able to maintain a close above the 1342.00 level puts in jeopardy our bullish scenario. The selling has been done without panic and conviction, and stills looks more like a profit taking move than the resume of the downtrend, but the indexes will have to prove their selves since the beginning of the session, a negative opening without an immediate strong reversal or failure to break above initial resistance could result in a wide range down day. The indexes will have to work hard to be able to push above initial resistance and build a base above the 1342.00 area on the E-mini S&P, 1820.00 on the E-mini Nasdaq and 700.00 on the E-mini Russell, all these levels must be joined by the cash Dow holding above the 12,400 level, if that happens then, at least, the indexes will come back to neutral territory waiting for the next move. An early sell off that does not hold the 1328.50 on the E-mini S&P and 1798.00-1796.00 levels on the E-mini Nasdaq will indicate a capitulation by the bulls. If the indexes hold the initial selling pressure and starts to push higher we could see a trend day that possibly reaches 1350.00 on the E-mini S&P.”
The markets got the initial sell off where we were looking to enter long for a swing trade but as in the past sessions the rally was not able to hold. The selling has been done without volume and the past three day settlements do not indicate a serious sell off as the losses has been modest. There has not been follow through to push the markets lower on a strong note and the overbought conditions seems to be worked out. There are more economic reports to be released before the opening and during the early part of the session that will keep the indexes under pressure. But if those are not as bad as expected, we can see a good rally particularly if yesterday’s settlement holds, and if that happens and the cash Dow gets back above the 12,400.00 area with the E-mini S&P holding above 1342.00 I don’t expect another late sell off. On the other side of the coin, if the markets move up early and test initial resistance without pushing higher and does not hold a pullback to initial support the selling could gain momentum and push the E-mini S&P lower for a test of the 1320.00 area, and if that low does not hold then the index will be on its way to the 1300.00’s with all the buyers out. You have to remember that the resistance levels have been rejected strongly and only breaking above them will trigger a multi day short covering rally. The E-mini S&P is already down the three last sessions, so if it does make new lows or don’t start to move up by today’s session, the last rally should be considered only a countertrend in a downtrend market. The low on the E-mini Nasdaq triggered a 10-point reaction, so I assumed that a lot of shorts should be trapped there, and if the markets open positive they will run for cover. The same for the E-mini Russell where huge stops have been build above the triple top formation at 704.90-706.00. I have been waiting for a rally that move prices above the 1363.00-1364.00 area on the E-mini S&P, but if the selling pressure does not end today and the 1320.00 area gets broken on a close, I will have to forget my short term bullishness.
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
1356.75-1358.00
1836.00-1838.00
709.80-710.50
Resistance 3
1349.50-1350.50
1823.00-1825.00
704.90-706.50
Resistance 2
1341.00-1343.00
1814.00-1816.00
700.10-701.30
Resistance 1
1333.00-1334.00
1803.00-1804.00
695.20-696.40
PIVOT
1334.75
1799.50
696.30
Support 1
1327.50-1325.50
1788.00-1786.00
691.50-690.20
Support 2
1323.00-1321.50
1782.00-1780.00
687.80-686.50
Support 3
1317.50-1316.50
1775.00-1772.50
684.00-682.80
Support 4
1313.25-1312.00
1766.00-1764.00
678.50-677.20
S&P
NASDAQ
RUSSELL
FIBONACCI
FIBONACCI
FIBONACCI
1382.79
1890.09
726.74
1377.71
1880.41
723.56
1369.50
1864.75
718.40
1361.29
1849.09
713.24
1356.21
1839.41
710.06
1348.00
1823.75
704.90
1339.79
1808.09
699.74
1337.25
1803.25
698.15
1334.71
1798.41
696.56
1326.50
1782.75
691.40
1318.29
1767.09
686.24
1313.21
1757.41
683.06
1305.00
1741.75
677.90
1296.79
1726.09
672.74
1291.71
1716.41
669.56
DAILY PROJECTIONS
S&P
NASDAQ
RUSSELL
AS DAILY HIGH
1338.75
1807.75
698.80
AS DAILY LOW
1317.25
1767.00
685.30
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.
