S&P 500 post its biggest weekly advance in 34 years on speculation that government bailouts will support the economy. Carl Icahn raises his stake in Yahoo.
WEEKLY PIVOTS FOR WEEK ENDING 05-December-2008R3 953.00
R2 926.00
R1 905.50
PP 858.50
S1 863.50
S2 839.25
S3 820.00
ECONOMIC DATA
10:00 AM Construction Spending
10:00 AM ISM Index
MARKET COMMENTARY AND OUTLOOKWe started last week with a bullish bias that resulted in a strong upside move. The upside swing that already has lasted six days found strong support at the critical 832.50-829.50 areas, which were tested twice during the week. Once those levels held, and despite horrendous economic data, the markets have not looked back, and Friday's session left the E-mini S&P 500 near the 900.00 resistance level. It seems that the E-mini S&P 500 is ready to break above it and continue to the next resistance band at 940.00-960.00 while the Dow pushes above the 9000 testing the 9400-9500 bands. The key for this to happen will be the Nasdaq outperforming the E-mini S&P 500. For this coming week, with the monthly job data to get released next Friday and a lot more of reports during the week, traders will concentrate on the consumer health and may be a little cautious; however at the moment the Dow will start to consolidate above the 9000 level; shorts will continue to cover their positions pressing the markets up and wait for the data at higher levels.
The daily charts continue to look good and only if Friday's rally that closed on the daily highs exhausted the last run, we could see a negative session that I suspect will be only a one day countertrend or a few hours of profit taking before the E-mini S&P 500 tries to trade above the critical 900.00 area on its way to the obvious 918.00-920.00 resistance levels which will offer the real test for this upside move, those should be considered pivotal, once the market breaks above them, trade higher, sell offs for a test and holds, then the way to much higher prices will be open. Remember that the bear campaign is not over yet, and despite the fact that I am expecting a strong December, in the same way my studies point for another steep fall during January. The break below the 50% retracement from the high on the Dow, was extremely important and indicates a short term low, the upside swing from that low has already lasted six consecutive sessions, here is where the uptrend has some risk, that's the main reason why I am expecting some selling, but as I wrote, nothing serious at this point. Take into account that I am not forecasting a move above the 940.00-960.00 areas, and I think the way to get there will be very volatile, not a trend move, so don't try to chase prices as ups and downs will be seen.
For today's trading session, if we have an early sell off that last most of the session, get ready to get long during the last two hours as I suspect that a few trapped shorts will give support to today's low volume expected session, and, if the market tries to rally on the early going, look to be a seller near the resistance levels, obviously with tight stops.
TODAY'S SESSIONThere is strong resistance at the critical 899.00-901.00 areas on the E-mini S&P 500, 1191.00-1193.00 on the Nasdaq and 478.20-479.80 on the Russell. I think there is more room for the indexes to continue and move higher, so if the market opens above these levels, try to get long on the first decent pullback, if that works as expected look for the indexes to reach their next levels at 906.50-908.00 on the E-mini S&P 500, 1200.00-1201.50 on the Nasdaq and 482.50-484.20 on the Russell. Trading above them will probably gain more upside momentum reaching 911.00-913.00 on the E-mini S&P 500, 1207.00-1209.00 on the Nasdaq and 488.40-489.30 on the Russell. If the session is strong enough, look for the E-mini S&P 500 to reach its next levels at the 918.00-919.00 levels.
There is support at 891.00-889.25 on the E-mini S&P 500, 1180.00-1178.00 on the Nasdaq and 470.00-469.20 on the Russell. If those cannot hold, look for strong support at 884.50-883.00 on the E-mini S&P 500, 1171.50-1170.00 on the Nasdaq and 464.50-463.10 on the Russell. Those will be a gift for a long entry if the trend is up, so get ready to buy there if the market holds those areas. If we'll have a negative session, a rest in this upside countertrend move, then the next support areas at 875.00-873.50 on the E-mini S&P 500, 1163.00-1161.00 on the Nasdaq and 458.50-457.30 on the Russell could be visited before the session is over. GOOD LUCK.
TODAY'S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P
NASDAQ
RUSSELL
Resistance 4
918.00-919.00
1213.50-1216.00
495.10-496.90
Resistance 3
911.00-913.00
1207.00-1209.00
488.40-489.30
Resistance 2
906.50-908.00
1200.00-1201.50
482.50-484.20
Resistance 1
899.00-901.00
1191.00-1193.00
478.20-479.80
PIVOT
889.00
1185.50
474.30
Support 1
891.00-889.25
1180.00-1178.00
470.00-469.20
Support 2
884.50-883.00
1171.50-1170.00
464.50-463.10
Support 3
875.00-873.50
1163.00-1161.00
458.50-457.30
Support 4
867.50-865.00
1156.00-1154.25
452.20-451.00
S&P
NASDAQ
RUSSELL
FIBONACCI
FIBONACCI
FIBONACCI
932.60
1245.21
538.38
927.40
1238.54
531.32
919.00
1227.75
519.90
910.60
1216.96
508.48
905.40
1210.29
501.42
897.00
1199.50
490.00
888.60
1188.71
478.58
886.00
1185.38
475.05
883.40
1182.04
471.52
875.00
1171.25
460.10
866.60
1160.46
448.68
861.40
1153.79
441.62
853.00
1143.00
430.20
844.60
1132.21
418.78
839.40
1125.54
411.72
DAILY PROJECTIONS
S&P
NASDAQ
RUSSELL
AS DAILY HIGH
907.00
1206.75
496.30
AS DAILY LOW
885.00
1178.50
466.40
Arturo Stern authors the daily E-mini 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.
