Global stocks tumble on Geithner’s warning that banks may need additional help, automakers plan was rejected, GM’s Wagoner forced out and the industry may get one last chance. Chrysler reaches deal for alliance with Fiat but markets close sharply lower for the day.
ECONOMIC DATA
9:00 AM S&P Case-Shiller Home Price Index
9:45 AM Chicago PMI
10:00 AM Consumer Confidence
YESTERDAY’S MARKET
After trading sharply lower during the Globex session, the E-mini SP kicked off at 794.00 from where it pushed down to 789.00. A feeble bounce to 792.25 failed to break higher and the SP fell to a new intraday low at 786.50. With the markets under strong pressure and the YM trading below 7500 the SP bounced to 790.25. With no buyers stepping in, the SP pulled back to 787.25 and after posting a higher low bounced to 790.75 where it failed. The SP pushed lower to a new low at 782.25 from where guided by the Russell bounced to 785.25 and fell to a new low at 781.25. With the Nasdaq and Russell holding their lows, the SP bounced all the way up to 786.00 just to fail once more and get pushed to a new low at 780.25 from where it bounced to 783.75, pulled back to 781.50 and bounced back to 784.00. The index pulled back a couple of points and targeted once more the 787.00 level. After failing to break the previous support and now resistance area, the SP backed off to 781.50 and then posted a new low at 778 and bounced to 783.50.after failing at the 784 level, the SP pushed all the way down to 775.50. After holding there, the index bounced to 783.25 and traded in a narrow range into the close showing some short covering. For the day, the SP lost 31.75 points and settled at 784.25, the Nasdaq ended lower by 33.50 points at 1222.50 and the Russell closed at 414.80 after losing 14.10 points during the day. The Dow lost 254 points closing the session at 7522.
MARKET COMMENTARY AND OUTLOOK
After struggling against the highs during the last three sessions of the past week and showing a negative day last Friday, markets just melted down during today’s session after a weak opening. Monday’s strong correction can be considered a normal condition of this uptrend countermove, and does not indicate yet that the rally has ended, but that can change if today markets post another sell off.
Yesterday’s wide range negative session in which the markets failed to hold critical levels have placed in jeopardy the current rally, and for it to continue markets will have to hold yesterday’s lows and post a positive session. That means, that a consolidation near the lows will probably have bearish implications, so even if the session starts with some weakness, a rally will have to be seen to negate a bearish pattern.
Today is the last trading session of the month, and anything can happen, we have some economic news to get released during the first 90 minutes of the trading session, so it will be critical for the markets to hold during the early morning.
Under this uncertainty, anything but another wide range down session may maintain the rally alive. I will try to be a buyer all the time that the SP can hold the 775.50 yesterday’s lows and I will probably add to my position if this index trades above the 793.00 level, and despite that i9 was totally wrong on my analysis of yesterday’s session, mi indicators still call for this upside move to try and give another try at the 840.00 area.
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
804.00-806.00
1258.00-1260.00
433.10-434.50
Resistance 3
797.00-799.00
1250.00-1252.00
427.10-427.40
Resistance 2
791.75-793.00
1238.50-1240.00
421.40-423.00
Resistance 1
788.00-789.00
1229.00-1232.00
418.00-419.00
PIVOT
791.50
1227.00
416.60
Support 1
781.00-779.00
1216.00-1215.00
412.70-410.60
Support 2
776.00-775.00
1208.00-1206.00
407.00-405.30
Support 3
768.00-766.50
1199.00-1198.00
402.10-400.50
Support 4
762.00-760.50
1191.00-1189.50
394.80-393.00
S&P
NASDAQ
RUSSELL
FIBONACCI
FIBONACCI
FIBONACCI
984.19
1471.25
526.3
919.32
1388.02
489.0
879.57
1337.02
466.1
855.00
1305.50
451.9
839.82
1286.02
443.2
815.25
1254.50
429.0
800.07
1235.02
420.3
795.38
1229.00
417.6
790.68
1222.98
414.8
775.50
1203.50
406.1
750.93
1171.98
391.9
735.75
1152.50
383.2
711.18
1120.98
369.0
671.43
1069.98
346.1
606.56
986.75
308.8
DAILY PROJECTIONS
S&P
NASDAQ
RUSSELL
AS DAILY HIGH
799.75
1238.50
421.90
AS DAILY LOW
760.00
1187.50
399.00
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
