E-mini trading advisory

DAILY TRADING ADVISORY 13-August-2009

FED leaves rates unchanged and stretch its long term bonds acquisitions which will end in October, recession easing. Markets rallied but gave back some of their gains.

ECONOMIC DATA

8:30 AM Initial Claims

8:30 AM Retail Sales

8:30 AM Retail Sales ex-auto

10:00 AM Business Inventories

YESTERDAY’S MARKET

With the markets fluctuating during the night, the E-mini SP started the session at 991.00 and immediately pushed up to 996.50 and then when the Nasdaq broke to new highs it reached 998.50. Easily, and leaded by the NQ, the SP continued to push higher reaching 1005.50. After a small pullback to 1003.00 and with continuing short covering, the SP made it to 1006.50. As traders waited for the FOMC Policy Statements release, the SP traded in a narrow range for a couple of hours in which it managed to push up to anew high at 1007.75. The index waited for the announcement near the intraday highs and once the news was out, the SP pulled back to 1003.00, after another test of the highs, the SP backed off to 1001.50 and bounced back to 1004.00. Once more sellers try to push lower but the SP held above the 1000.00 mark and rallied to 1011.25. After various attempts to break higher, the index pulled back to 1007.00, bounced once more and sold off into the end of the day. For the session, the SP added 9.25 points and settled at 1002.25, the Nasdaq closed higher by 22.25 at 1618.75 and the Russell added 8.00 points finishing the day at 570.40. The Dow closed at 9361 with a 120 point advance.

MARKET COMMENTARY AND OUTLOOK

Markets reacted well to the 992.00 and 1596.00 areas on the SP and NQ, and despite the new Globex lows below those areas, the opening was bought and shorts covered once the intraday resistance areas at 998.50 and 1602.00 on the Nasdaq were exceeded.

Yesterday’s rally and late pullback in which the Nasdaq managed to test once more the recent highs and the SP closed once more above the 1000.00 mark keeps the uptrend intact, it also gives validity to my short-term bullish scenario in which I considered that the high has not been posted yet.

The 1630.00-1632.00 area on the NQ has been the ceiling for that index during the last 20 days, and If this index manages to break up solidly I will expect a test of the 1680.00 area, but meanwhile it just keep spending time in a narrow daily trading range.

In one of the previous sessions, I wrote that one of the ways to put an end to this rally will be a sharp sell off followed by a rebound that fails to make a new high, I don’t think that the two days sell off that we saw and yesterday’s rally and late pullback prints this scenario, but I will closely follow the direction of the markets during the rest of the week. I also want to remind you that next week we have the August option expiration, normally a bullish week, so I think that new highs on the SP and Nasdaq will be printed on the charts during the next trading sessions.

Tomorrow, before the opening, we get the weekly initial jobless claims and the important retail sales data, if those come out better than expected, the markets should try to push higher, either way, in my short term bullish scenario I will try to play the long side all the time that the 998.50 area on the SP holds and all the time that the Nasdaq is trading in positive territory.

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

1025.00-1025.50

1644.00-1645.00

583.50-585.00

Resistance 3

1014.50-1016.00

1638.25-1639.00

579.10-580.50

Resistance 2

1009.25-1010.00

1629.50-1631.00

575.70-576.00

Resistance 1

1004.50-1006.50

1623.00-1625.00

572.20-573.90

PIVOT

999.75

1613.25

568.60

Support 1

1000.00-997.50

1613.00-1610.50

568.10-566.90

Support 2

995.25-994.00

1605.00-1603.00

564.80-564.10

Support 3

988.00-987.50

1593.75-1592.00

559.80-558.30

Support 4

982.00-981.00

1576.00-1574.00

555.60-544.70

S&P

NASDAQ

RUSSELL

FIBONACCI

FIBONACCI

FIBONACCI

1119.63

1831.38

659.3

1078.01

1755.49

627.8

1052.51

1708.99

608.5

1036.75

1680.25

596.6

1027.01

1662.49

589.2

1011.25

1633.75

577.3

1001.51

1615.99

569.9

998.50

1610.50

567.7

995.49

1605.01

565.4

985.75

1587.25

558.0

969.99

1558.51

546.1

960.25

1540.75

538.7

944.49

1512.01

526.8

918.99

1465.51

507.5

877.38

1389.63

476.0

DAILY PROJECTIONS

S&P

NASDAQ

RUSSELL

AS DAILY HIGH

1019.50

1649.50

583.50

AS DAILY LOW

994.00

1603.00

563.20

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.

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