Initial Claims at 623K, continuing claims reaching 4.81 million and an unexpected increase in retail sales of 1% and a global sentiment that the stimulus plan won’t be enough to revive the economy. Foreclosures push home prices to a five-year low. Markets made a late-day comeback, hoping that homeowners will get more help with their mortgages.
ECONOMIC DATA
9:55 AM Michigan Sentiment – preliminary.
YESTERDAY’S MARKET
Concerns that the stimulus plan won’t help the global economy gave way to a negative Globex session where the futures markets tested and broke below their recent support areas. The E-mini SP started the session at 816.50 from where it pushed down to the 812.00 area. After our support areas were reached, the SP bounced back to 817.00 but fell quick to a new low at 811.25 and then to 808.25 from where it bounced to 814.50, pulled back to test our 810.00 support area and moved higher. After trading in a narrow range and leaded by the strength in the Nasdaq the SP reached 819.00. Unable to gain more upside momentum, the index pulled back to 812.00 where buyers stepped in pushing the markets up to their next resistance levels. The SP reached 822.00, held there and rallied to 825.00 where the rally lost its steam. The SP pulled back to 818.00 bounced back to 822.00 and get sold to 813.00 from where it bounced to 819.00 and sold off once more to test the lows. A feeble bounce failed at 815.00 and the index moved down to new intraday lows at 807.00, tried to bounce but with the increased selling pressure posted a new low at 805.50 where it stopped me out from my last long trade just to rally strong to 813.75 and then guided by positive news broke strongly higher reaching new daily highs at 836.75 during the last hour of the session. For the day, the SP added 4.00 points and closed at 835.50, the Nasdaq added 20.75 points and settled at 1245.25
MARKET COMMENTARY AND OUTLOOK
I mentioned yesterday the possibility that an early sell off could get strongly reversed and that is what happened. Yesterday’s highly bullish reversals in all of the indexes could head the markets higher during today’s session, no matter that it is a Friday and a long weekend as we have a holiday on next Monday.
The false break in the Dow that has redrawn the lower trend line has widened the ranges in that index, but the down move was not confirmed by the other indexes which managed to hold above their long term support areas.
Yesterday’s rally may have left many late sellers trapped at or near the lows, and even I am not convinced yet that this rally is the “good one”, I do think that it can run for a few more sessions and push the indexes to another test of the late highs, the 8350 area on the Dow and 875.00 level on the SP where markets will have to decide which direction to follow.
So, for today’s trading session let’s try to stay with yesterday late trend, thinking that this rally won’t get reversed before the end of next week when the February options expired.
TODAY’S SESSION
For today’s trading roadmap and intraday updates, please read the authors bio.
Dear Traders: Next Monday I will be traveling to Mexico City from where I will work the next three months, please take in consideration that the next report will be posted on Wednesday February 18, thanks
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS
S&P
NASDAQ
RUSSELL
Resistance 4
857.50-858.00
1276.00-1278.00
467.10-468.60
Resistance 3
851.50-852.50
1268.50-1269.50
463.70-464.50
Resistance 2
843.50-845.00
1258.00-1260.00
459.00-460.20
Resistance 1
839.50-841.00
1249.50-1251.00
455.30-457.10
PIVOT
826.00
1231.50
446.90
Support 1
832.50-830.50
1241.00-1239.50
451.50-449.70
Support 2
826.50-825.00
1233.00-1231.00
445.40-444.10
Support 3
821.00-819.50
1224.00-1222.00
441.90-440.10
Support 4
815.00-813.00
1216.00-1215.00
433.90-432.70
S&P
NASDAQ
RUSSELL
FIBONACCI
FIBONACCI
FIBONACCI
887.31
1319.00
486.38
879.94
1308.50
481.62
868.00
1291.50
473.90
856.06
1274.50
466.18
848.69
1264.00
461.42
836.75
1247.00
453.70
824.81
1230.00
445.98
821.13
1224.75
443.60
817.44
1219.50
441.22
805.50
1202.50
433.50
793.56
1185.50
425.78
786.19
1175.00
421.02
774.25
1158.00
413.30
762.31
1141.00
405.58
754.94
1130.50
400.82
DAILY PROJECTIONS
S&P
NASDAQ
RUSSELL
AS DAILY HIGH
851.75
1268.00
463.70
AS DAILY LOW
820.50
1223.00
443.50
Support, Pivot and Resistance levels courtesy of Arturo Stern. He authors the E-mini Daily trading advisory which gives technical analysis on 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
