Initial jobless claims are down, Bernanke is demanding more power, Fannie Mae and Freddy Mac display weakness and higher crude oil prices resulted in a volatile session with modest earnings.
ECONOMIC DATA8:30 a.m. Export Prices8:30 a.m. Import Prices8:30 a.m. Trade Balance10:00 a.m. Michigan Sentiment- prelim.
YESTERDAY’S MARKETSIn a volatile session and after making new lows, U.S. markets managed to close on the green. The E-mini S&P 500 opened at 1245.25 and moved up quickly reaching 1253.50, just at our resistance area. As fast as it moved up, and on an erratic behavior, the index pushed down strongly making intraday lows at 1237.50 where buyers stepped in and driving the index higher back to 1249.50. A double top at that level kept the index of moving higher as it pulled back to 1243.00 after a few attempts to break lower, the S&Ps managed to hold and rallied back to its 1253.50-1255.00 resistance areas. Another pullback held at 1246.00 resulting in a good short covering rally that reached 1258.75, almost the Globex high. Unable to print new highs, the index sold off strongly and without looking back made a new low at 1237.00. The double bottom was bought aggressively and the markets rallied back strong during the last hour of trading with the E-mini S&P 500 reaching 1255.00 into the close. For the day SP’s gained 6.50 points ending the session at 1254.50,the E-mini Nasdaq settled at 1844.25, up 12.75 points and the E-mini Russell at 671.00 up 7.00 points for the session. The Dow 81 points ending the day at 11229.
MARKET COMMENTARY AND OUTLOOKLast Wednesday I wrote: “If the 1236.00 low on the E-mini S&P 500 was done during the regular trading hours, I would not have any objection that it could be considered an important low, but the fact that it was not tested during the day makes me a little suspicious about calling it “the low”. So, I suspect that if yesterday’s move extends this rebound into the coming sessions, later the markets will fall back to reach a new low below that Globex low. As a conclusion, I can say that yesterday’s rally could indicate that a short term low has been posted no matter if the Globex low is tested once more during the upcoming days, but the markets will have to show some follow through.” And Yesterday I wrote: ”However, the triple bottom seen during the last trading sessions could result also in a successful test of the lows or a marginal new low that becomes a false break and keep the E-mini S&P 500 in a trading range that can be easily seen on the daily charts (1240.00-1290.00). So in this critical juncture I will try to go day by day as anything can happen.”
The E-mini S&P 500 reached the 1237.00 Globex low that I was talking about, and, exactly as I described yesterday, the break below the 1242.0-1240.00 area that tested the 1237.00 area twice was a false break and possible a short time low that could result in a seven to eight day rally. However further confirmation will have to be seen to call a low, and that confirmation will be two consecutive closes above the recent highs at 1278.00-1279.00. So some follow through will have to be seen during today’s session in order to bring the markets to a neutral position. Take into account that a first signal of a good rally coming into the markets will be the S&Ps exceeding our second resistance levels at 1261.75-1263.50 and 11450 on the Dow, if that happens, the move has the potential to move the indexes much higher during the coming weeks. So for today’s session, try to stay on the long side all the time that the indexes keep trading above our pivotal areas but avoid a long position if the markets show losses, as the bears could still have the control.
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 4
1272.00-1273.00
1868.00-1870.00
684.50-685.60
Resistance 3
1267.00-1268.25
1861.00-1862.25
679.40-681.00
Resistance 2
1261.75-1263.50
1855.00-1856.50
675.90-677.20
Resistance 1
1256.50-1258.50
1848.50-1850.50
672.40-673.80
PIVOT
1250.25
1835.50
669.30
Support 1
1250.50-1248.50
1840.00-1838.00
668.20-666.80
Support 2
1242.50-1241.00
1834.00-1832.00
662.60-661.50
Support 3
1238.00-1236.50
1820.00-1818.00
656.10-655.00
Support 4
1231.00-1229.75
1807.00-1805.50
652.20-651.40
S&P
NASDAQ
RUSSELL
FIBONACCI
FIBONACCI
FIBONACCI
1295.25
1922.73
700.59
1290.00
1912.52
697.01
1281.50
1896.00
691.20
1273.00
1879.48
685.39
1267.75
1869.27
681.81
1259.25
1852.75
676.00
1250.75
1836.23
670.19
1248.13
1831.13
668.40
1245.50
1826.02
666.61
1237.00
1809.50
660.80
1228.50
1792.98
654.99
1223.25
1782.77
651.41
1214.75
1766.25
645.60
1206.25
1749.73
639.79
1201.00
1739.52
636.21
DAILY PROJECTIONS
S&P
NASDAQ
RUSSELL
AS DAILY HIGH
1268.00
1870.00
681.10
AS DAILY LOW
1245.75
1826.50
665.90
Support, pivot and resistance levels courtesy of Arturo Stern, who 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 HYPERLINK "http://www.theminitrade.com/" \t "_blank" 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.
