ADP Employment better than expected, crude oil up on lower inventories and the Fed extending its loan emergency plan until January resulted in another strong session.
ECONOMIC DATA
8:30 AM GDP
8:30 AM Initial Claims
8:30 AM Employment cost index
9:45 Chicago PMI
YESTERDAY’S MARKETS
The E-mini S&P opened strong at 1270.00 and rallied early in the session reaching 1275.75 from where it pulled back mildly to 1272.00, a double bottom at that level resulted in a short covering rally that pushed the index up to 1280.50 joined by the other indexes. The Nasdaq reached 1266.75 while the E-mini Russell tested the 720.40 level. Just after the crude oil inventories were released, the indexes sold off lead by the E-mini Nasdaq that since the beginning of the session showed a moderate weakness. The S&P’s pulled back to 1273.50, bounced to 1277.75 and dropped to the 1272.00 area. A last bounce failed at our 1275.75 resistance area where seller came in and pushed the index all the way down to 1264.25 while the Nasdaq reached 1828.25. A 1-2-3 bottom held without trading the previous day settlement and the S&P’s rallied to 1272.50. After holding above our 1269.50 support level, the index rallied to new highs into the end of the session reaching 1283.50 before pulling back mildly and making new highs into the close. For the day, the E-mini S&P added 23.00 points and settled at 1284.75, the E-mini Nasdaq ended at 1856.25, up 14.25 points and the Russell gained 4.20 points at 717.80.The Dow posted another bullish session adding 186 points closing the session at 11583.
MARKET COMMENTARY AND OUTLOOK
Wednesday I wrote, “Yesterday’s rally has placed the market on a strong position and if the rally continues into today’s session, chances are that higher prices will be sustainable until the end of the week, and if the unemployment numbers come out in line, we can be visiting the highs of the current range, 1200.00 to 1290.00. The indexes have been shifting from a very negative single session to huge rises during the next one, all of this with an apparent bullish sentiment, but at the end failing to sustain their advance. All this makes complicated to predict a multi-day move, as none of the recent huge reversals have been able to create the momentum to break out of the recent ranges. The S&P’s and the Dow have formed a triangle consolidation, that when it gets resolved it will result in a huge move. The Nasdaq has been range bounded and probably will continue to move between the recent high and lows; it will be unusual to see another trend day, so both sides of the range could offer trading opportunities, sell high and buy low maintaining a slightly bullish bias.”
We came into the session looking for opportunities on both sides of the market, and keeping a bullish bias. The early divergences between the indexes and the higher crude oil prices gave way to a decent pullback, that at the end was resolved to the upside driving the S&P’s near the 1290.00 area. The end of month bullish scenario and the already overextended move may be coming to and end and probably, a reversal is around the corner. It will be a surprise for me to see the S&P’s breaking above the last high at 1290.00 by more that 3 points, however, if that happens, there are chances that the rally will extend to 1320.00 where an open gap from late June is waiting to get filled. The markets continue to show a bullish pattern, and the economic data, to get released between today and tomorrow could push the markets higher. However the complacency seems to keep traders buying the recent deeps and we could see, if not today, tomorrow, a huge reversal with prices trading once more below the 1260.00 pivotal level.
For today’s session, if the economic data comes out as expected, markets should see early strength, and then lose their momentum showing some profit taking in front of tomorrow’s unemployment data. So wait for the initial rally to stall and try to get short near the highs after the first hour of trading.
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
1302.00-1303.50
1878.50-1881.00
732.20-734.50
Resistance 3
1298.00-1299.00
1872.50-1873.75
729.70-730.70
Resistance 2
1291.50-1293.25
1864.00-1866.00
724.30-725.90
Resistance 1
1287.25-1289.00
1858.00-1859.50
719.20-720.50
PIVOT
1276.50
1850.50
715.90
Support 1
1282.00-1280.00
1852.25-1850.00
716.40-715.10
Support 2
1277.75-1276.50
1845.00-1843.50
713.70-712.00
Support 3
1271.00-1269.50
1835.00-1834.00
709.70-708.50
Support 4
1264.50-1262.25
1825.00-1823.75
704.80-703.50
S&P
NASDAQ
RUSSELL
FIBONACCI
FIBONACCI
FIBONACCI
1325.85
1929.04
746.35
1319.90
1919.96
742.85
1310.25
1905.25
737.20
1300.60
1890.54
731.55
1294.65
1881.46
728.05
1285.00
1866.75
722.40
1275.35
1852.04
716.75
1272.38
1847.50
715.00
1269.40
1842.96
713.25
1259.75
1828.25
707.60
1250.10
1813.54
701.95
1244.15
1804.46
698.45
1234.50
1789.75
692.80
1224.85
1775.04
687.15
1218.90
1765.96
683.65
DAILY PROJECTIONS
S&P
NASDAQ
RUSSELL
AS DAILY HIGH
1297.50
1880.75
727.50
AS DAILY LOW
1262.25
1842.25
712.70
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
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.
