Personal Spending was up .2%, while Personal Income and PCE Inflation were flat, giving way to new highs that were sold. Later in the day markets recovered, closing neutral and mixed.
WEEKLY PIVOTS FOR WEEK ENDING 28-August-2009
R3 1063.25
R2 1051.00
R1 1039.25
PP 1027.00
S1 1015.25
S2 1003.00
S3 991.25
ECONOMIC DATA
9:45 AM Chicago PMI
WEEKLY RECAP
Markets started the week posting new intraday highs but consolidated during the session, the SP closed at 1024.50, the Nasdaq lost 1.50 points closing at 1634.50 and the Russell closed lower by .70 points at 579.80. The Dow closed almost unchanged at 9509. Tuesday’s trading session had the news that President Barack Obama plans to reappoint Ben Bernanke to a second term as chairman of the Federal Reserve. Later in the day, the Case-Shiller home prices index reported that home prices in the main 20 U.S. cities fell in June at a slower pace than forecast; also, the August Consumer Confidence jumped to 54.1 on the jobs outlook. All this gave way to a new intraday high, however, sellers came in and the session resulted a non event session as the markets closed with marginal changes. For the day, the SP added 1.50 points closing the day at 1026.00, the Nasdaq added 2.50 points and settled at 1636.50 and the Russell closed higher by 2.50 points at 582.30. The consolidating trend pattern continue also in Wednesday, the session started with the sad news that Senator Edward Kennedy died, Durable Good Orders jumped 4.9% for July and the New Home Sales data jumped 9.6% in signs that economy may be recovering, for the day, the SP added .75 points and settled at 1026.75, the Nasdaq unchanged for the day at 1636.50 and the Russell finished the day at 586.90. The Dow closed marginally up at 9543. Thursday’s trading session the markets received various economic and corporate reports, 2Q GDP came out minus 1%, Initial Claims at 570K, Continuing Claims at 6.13 million and Boeing jumped 8%, all these gave way to an initial sell off that was reversed to push markets up into the close posting a positive close. For the day, the SP added 2.25 points and settled at 1029.50, the Nasdaq added 2.00 points closing at 1638.50 and the Russell lost .30 closing at 582.60. The Dow added 37 points closing the day at 9580. Friday was more of the same, earlier new highs get reversed, Personal Spending was up .2%, Personal Income and PCE Inflation flat, at the end, the SP lost 1.75 points and settled at 1027.50, the Nasdaq added 3.75 points closing the week at 1642.75 and the Russell lost 3.3 points finishing the week at 579.10.The Dow lost 36 points closing at 9544. For the week, markets closed marginally up.
FRIDAY’S MARKET
Markets traded with a positive bias during the nightly session, making new highs as the pre opening economic reports were released. The E-mini SP started the day at 1038.00 and pulled back to 1035.00. Then, the SP rallied to 1038.75, the Globex high. With the markets waiting for the release of the next piece of data, the SP pulled back strongly to 1032.00. Once the data was out, the SP bounced to 1035.00 but sellers stepped back in, pushing the index down to 1029.50. The index tried to hold above the 1030.00 area but finally gave back and sold off to a new marginal low below the 1027.00 Globex low, once that level was tested the SP bounced to 1031.75. As the selling pressure continued the SP pushed down all the way to 1022.00 where the markets held. After trading in a narrow range above the lows, the index pushed up to 1027.50, once more the markets consolidated; the SP tested the 1025.00 level, bounced to 1029.25 where it topped. The index backed off to 1026.75 and traded in a sideways pattern for the rest of the session. For the day, the SP lost 1.75 points and settled at 1027.50, the Nasdaq added 3.75 points closing the week at 1642.75 and the Russell lost 3.3 points, finishing the week at 579.10.The Dow lost 36 points closing at 9544. For the week, markets closed marginally up.
MARKET COMMENTARY AND OUTLOOK
Last Friday I wrote: “Not too much has changed during the last three sessions, the indexes continue to consolidated after the SP posted its high at the 1038.00 upside objective, this consolidation that is taking place near the highs carries a bullish undertone, and despite that the felling of many traders is that we have a short term top, there is not evidence that longs are afraid of a reversal. Today’s session, near the end of month cycle has the tendency to see a strong move, normally, the end of month markets push up, and after three consecutive session in which the indexes didn’t make anything, they may surprise us finally breaking out of the current range. Earlier in the morning we have the Personal Income and spending data, spending, if increased may give way to another pre-opening spike, then the markets will have to trade against it, on a Friday, I would not be surprised if we have a wide range trading session, but despite my slightly bullishness based on the fact that the consolidation is taking place near the highs, there are not clues of what the markets will do, and with so low trading volumes, anything could happen, I think that I will continue to be a buyer on the pullbacks.”
Markets rallied in the early morning, sold off and bounced into the close posting a neutral close. This consolidating week in which the SP posted a double top at my first upside objective, 1038.00, and the Nasdaq traded a new high, will have to give way to a strong breakout during the next trading sessions.
During the last weeks I have maintained a bullish bias, this has worked out well, but now, the markets will have to prove that they can hold and move forward to the 1060.00’s levels on the SP and 1675.00 or higher, maybe 1698.00 on the Nasdaq. The indexes has found good support above the previous important highs that has been acted as short term KEY support areas, the 1014.50 on the SP and the 1632.00-1630.00 areas on the Nasdaq, that despite that were violated to the downside during the week, the indexes has continued to close above them.
However, traders have been selling the new highs and early strength has resulted in intraday sell off moves. These moves have been met by new buyers who have been entering the markets on every pullback. If the markets won’t be able to rally and hold their gains into the close, the next time that sellers press the indexes down, they may win the battle, giving way to a more important correction.
So the next few days are highly important to call the next move. The longer the markets fail at the highs, the greater the chances that they are ready to correct. But there is not evidence that the highs have been posted. The double top on the SP is the only real circumstance that at this moment could be a red flag on the charts, but the short term trend continues to be slightly bullish to neutral.
Under this uncertainty about the next move it's hard to take a trading position, and with the low trading volumes normal for the season, this lack of conviction on direction could also last into Labor Day. Taking all this into account, and unknowing the next move of the markets, I recommend to light positions and to use the Monday’s pivot points for market direction, long above them and short below them. I will also try to follow the Nasdaq as this index normally give us the clues for market direction, and, with a whole week of fluctuating conditions markets, may be ready for a trend session.
Remember that the SP has strong resistance around the 1032.00-1033.25 areas. This Monday, they coincide with my AS higher projection, so if we have an early bounce that fails there, we could see another intraday sell off, but if that level gets exceeded, Monday, at the end of the month, markets may push higher breaking to new highs.
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 |
1045.00-1046.00 |
1674.50-1675.00 |
597.10-598.50 |
|
Resistance 3 |
1039.25-1040.50 |
1663.75-1666.00 |
590.70-591.80 |
|
Resistance 2 |
1036.50-1037.00 |
1653.00-1655.00 |
587.60-588.10 |
|
Resistance 1 |
1030.50-1032.00 |
1646.50-1649.00 |
581.90-583.30 |
|
PIVOT |
1029.50 |
1647.00 |
581.70 |
|
Support 1 |
1026.00-1024.50 |
1638.50-1636.50 |
576.30-574.90 |
|
Support 2 |
1020.00-1018.50 |
1632.00-1630.00 |
572.70-570.90 |
|
Support 3 |
1016.00-1015.00 |
1626.00-1624.00 |
569.20-568.10 |
|
Support 4 |
1012.50-1011.00 |
1620.50-1618.00 |
566.30-564.80 |
|
S&P |
NASDAQ |
RUSSELL |
|
FIBONACCI |
FIBONACCI |
FIBONACCI |
|
656.2 |
1109.94 |
670.7 |
|
631.0 |
1082.60 |
636.9 |
|
615.6 |
1065.85 |
616.2 |
|
606.1 |
1055.50 |
603.4 |
|
600.2 |
1049.10 |
595.5 |
|
590.7 |
1038.75 |
582.7 |
|
584.8 |
1032.35 |
574.8 |
|
583.0 |
1030.38 |
572.4 |
|
581.2 |
1028.40 |
569.9 |
|
575.3 |
1022.00 |
562.0 |
|
565.8 |
1011.65 |
549.2 |
|
559.9 |
1005.25 |
541.3 |
|
550.4 |
994.90 |
528.5 |
|
535.0 |
978.15 |
507.8 |
|
509.9 |
950.81 |
474.0 |
|
DAILY PROJECTIONS |
S&P |
NASDAQ |
RUSSELL | ||
|
AS DAILY HIGH |
1033.25 |
1674.50 |
584.90 | ||
|
AS DAILY LOW |
1016.00 |
1636.00 |
569.50 |
Support, Pivot and Resistance levels courtesy of Arturo Stern. He authors the E-mini Daily trading advisory which gives technical analysis on all 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
