Durable goods orders better than expected, up 3.4% and New Home sales up 4.7% on cheaper property prices gave way to an early rally that failed once the Treasury auction prompted speculation of higher interest rates.
ECONOMIC DATA
8:30 AM Initial Claims
8:30 AM GDP Final (Q4)
8:30 AM GDP Price Index (Q4)
YESTERDAY’S MARKET
Markets opened in positive territory, the E-mini SP started the session at 808.25 and pushed up to 811.75, pulled back a few points and bounced to 812.00. The SP stopped a few times at the 812.00 level, but once it got exceeded, the early rally continued reaching 815.50, once the New Home sales data got release, the rally continued up to 822.25. The SP pulled back to 816.25 where a double bottom gave way to a move to new highs, the index reached 823.50. With the highs in place, the SP pulled back once more to 816.25. As the double bottom held, the SP bounced back to 820.50 just to get sold to 815.00 where the sell off stopped. After a few attempts to break below 815.00, the 50% Fibonacci retracement of the daily ranges, the SP bounced back to 819.50 and led by the strength in the Russell and after another pullback to 817.00, bounced to 821.50. As the Russell failed to make a new high and posted a double top the markets backed off, the SP pushed down to 813.75 and then to the critical 812.00-810.50 support levels, once those get broken, the markets fell strong and the SP reached 802.00. After a rebound to 806.00, the index pushed to new intraday lows at 794.75 and then at 787.00 from where the markets bounced reaching 799.50. After pulling back to 795.50 the market bounced reaching 812.00 from where it pulled back into the end of the session. For the day, the SP ended higher by 4.75 points and settled at 808.25, the Nasdaq lost 2 points closing the session at 1234.25 and the Russell gained 9.90 points closing at 425.00.The Dow added 89 pints and closed at 7749 after an erratic trading session.
MARKET COMMENTARY AND OUTLOOK
Well, the bullish scenario remains intact. After starting the session with a bullish bias taking advantage of the early rally, we were right about the sell off that took prices below our 804.00 downside objective.
There is not too much change in my analysis, I still think that the markets will be able to push higher, and as I wrote on yesterday’s report, that rally will have to start during today’s trading session, that means, today is the break or make day, if this rally will exceed the limits for a second degree countertrend giving way to a longer move, the markets have to rally today, otherwise a wide range downside session will point to much lower prices.
The markets have consolidated the recent moves, the SP broke yesterday’s lows below the 804.00 and then below the 798.50 areas, but was able to bounce strong into the end of the session, this is a bullish scenario. The Dow, the futures contract, broke marginally below the 7500 area and rallied from its lows almost 200 points, this is a bullish scenario.
So, buying the pullbacks seem to be the way to go, we can extend the consolidation period, but yesterday’s lows MUST remain intact. I will keep favoring the long side as I still think that this rally may be able to reach the 860.00’s on the SP.
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
833.00-834.00
1271.00-1273.00
445.60-447.00
Resistance 3
825.50-826.50
1261.00-1262.00
437.80-440.20
Resistance 2
816.00-818.00
1249.00-1251.00
433.20-434.80
Resistance 1
810.50-812.50
1239.00-1241.00
426.30-428.60
PIVOT
806.25
1233.50
420.70
Support 1
804.00-802.00
1226.00-1224.00
421.70-419.80
Support 2
798.00-797.00
1218.00-1216.00
416.10-415.30
Support 3
789.00-788.00
1205.00-1203.00
410.30-409.90
Support 4
781.00-780.00
1191.00-1189.00
401.20-400.10
S&P
NASDAQ
RUSSELL
FIBONACCI
FIBONACCI
FIBONACCI
978.63
1500.56
537.3
919.06
1408.76
496.7
882.56
1352.51
471.8
860.00
1317.75
456.4
846.06
1296.26
446.9
823.50
1261.50
431.5
809.56
1240.01
422.0
805.25
1233.38
419.1
800.94
1226.74
416.1
787.00
1205.25
406.6
764.44
1170.49
391.2
750.50
1149.00
381.7
727.94
1114.24
366.3
691.44
1057.99
341.4
631.88
966.19
300.8
DAILY PROJECTIONS
S&P
NASDAQ
RUSSELL
AS DAILY HIGH
834.00
1247.50
440.20
AS DAILY LOW
797.00
1191.00
415.30
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
