Bernie Madoff gets sentenced to 150 years in jail. VIX drops to lowest levels since Lehman collapse.
ECONOMIC DATA
9:00 AM Consumer Confidence
9:00 A&P CaseShiller Home Price Index
9:45 AM Chicago PMI
MONDAY’S MARKET
Markets started the holiday shortened week on the green. The E-mini SP started the session at 917.00 and pulled back a point in a half. After trying to push higher, above the opening price, the index moved lower to 914.00, the index bounced back to 916.00 and traded in a narrow range for the first minutes of the session. The SP made a new low at 911.75 and bounced to 913.00. While the Russell posted a new low, the SP held and rallied all the way up to 918.50, and after a few minutes and once the Nasdaq started to cooperate it pushed to a new high at 923.25. The rally ended and the markets traded in a narrow range near the daily highs, later, the upside pressure pushed the SP up to 924.00. The narrow range trading pattern continued and despite the pullback on the Nasdaq and Russell the SP refused to break down. Markets traded in a narrow range into the end of the session, the SP added 7.25 points and settled at 921.25, the Nasdaq ended higher by 4.75 points closing the session at 1481.50 and the Russell gained 1.70 points at 508.00.
MARKET COMMENTARY AND OUTLOOK
Markets made their daily lows during the night and the earlier pullback gave way to a solid move that reached my 924.00 area. That is the June 19 high from where the SP, after a narrow range session, saw a sharp sell off that pushed that index below the 890.00 area.
If yesterday I mentioned on my newsletter that the SP MUST close above the 924.00 area for that market to give another try to the highs, yesterday’s action just confirms the importance of that level. Take into account that once the end of quarter is gone, a profit taking move that pushed the SP below the 890.00 area may be seen, to negate this scenario, the 924.00-926.00 area may get solidly exceeded and hold for two consecutive closes, or the rally from last week lows may be only a countertrend move in a market that may see lower prices.
Another important factor is the VIX, which fell to its lowest levels of the year; it seems that traders are very confident with the market condition, the March to July rally and the economic data. This is a red flag, too much complacency, but that does not mean that the markets can not move higher.
The slow activity seen during yesterday’s session may continue for the rest of the week, and while today we will get the first economic piece of data, no matter if the numbers are goods or bad, the daily sideways pattern may hold for the rest of the week.
So, let’s try to make our life easier, and let’s give a chance to the NQ to show the way, but with high precaution as mixed market conditions where rotation is seen between the different indexes, may give way to erratic moves that do not result in a trend.
For today’s trading session, once the economic numbers get released, go long once the NQ trades in positive territory, but beware of any bullishness if both, the SP and Nasdaq area trading in negative territory as markets could surprise those who overweight the lower VIX thinking that the way is only to the upside.
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
934.25-936.00
1501.75-1503.50
522.30-523.40
Resistance 3
930.50-931.00
1494.00-1496.00
518.00-518.60
Resistance 2
926.00-927.75
1489.00-1490.00
513.20-514.50
Resistance 1
922.50-924.25
1484.00-1486.00
509.10-510.20
PIVOT
917.50
1480.25
506.70
Support 1
919.75-918.00
1476.50-1474.00
506.10-505.30
Support 2
916.00-914.00
1468.00-1466.00
501.50-500.80
Support 3
912.00-911.00
1461.00-1460.50
494.90-493.70
Support 4
907.50-906.00
1454.00-1452.00
491.10-490.20
S&P
NASDAQ
RUSSELL
FIBONACCI
FIBONACCI
FIBONACCI
995.19
1601.94
562.1
967.85
1559.91
542.8
951.10
1534.16
531.0
940.75
1518.25
523.7
934.35
1508.41
519.2
924.00
1492.50
511.9
917.60
1482.66
507.4
915.63
1479.63
506.0
913.65
1476.59
504.6
907.25
1466.75
500.1
896.90
1450.84
492.8
890.50
1441.00
488.3
880.15
1425.09
481.0
863.40
1399.34
469.2
836.06
1357.31
450.0
DAILY PROJECTIONS
S&P
NASDAQ
RUSSELL
AS DAILY HIGH
931.00
1499.25
515.90
AS DAILY LOW
914.25
1474.00
504.10
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.
