E-mini trading advisory for Sept. 1

DAILY TRADING ADVISORY 1st-September-2009

Markets traded under pressure as China stocks sold off. Chicago PMI came out better than expected.

ECONOMIC DATA

10:00 AM Construction Spending

10:00 AM ISM Index

2:00 PM Auto Sales

2:00 PM Truck Sales

YESTERDAY’S MARKET

With Chinese markets trading under pressure, U.S. markets started the session with losses. The E-mini SP opened the day at 1019.00 and bounced to 1021.00. With high volatility during the firs minutes of the session, the index pushed down to 1016.50, bounced to 1020.25 and sold off to a new low at 1013.25. After pushing up to 1017.75 the SP backed off to 1014.50 and rallied to 1019.25. Unable to break above the opening high, markets fluctuated for a long period in a narrow range. Finally the SP made a rebound attempt that reached 1019.50 where the bounce failed. With extremely low trading volumes the SP pulled back to 1016.00, but the daily lows held and the indexes bounced into the close. For the day, the SP lost 7.75 points and settled at 1019.75, the Nasdaq lost 17.50 closing the day at 1625.00 and the Russell closed lower by 7.40 points at 571.70. The Dow lost 47 points finishing at 9496.

MARKET COMMENTARY AND OUTLOOK

What a boring session, markets opened lower and under pressure, they pushed down and once they found support they traded in a narrow range for the rest of the day.

Do we have a top? Are the markets ready for a correction or will this boring sideways pattern typical for the end of vacation period continue for another week? The markets have been trading in a sideways pattern in which the 1010.00 and 1040.00 levels on the SP have been able to hold the selling pressure and the rallies; the Nasdaq which managed to hold above the 1632.00 areas during a few session failed to come back on yesterday’s session and closed once more below that area and the Dow, which has been consolidating the 9500-9600 band, is going nowhere. Follow through is what we are waiting for in order to guess the next big move.

This kind of erratic trading activity in which the indexes have failed to make their breakout may continue for a few more days, maybe until next Friday in which the monthly job reports get released, once the reports is out traders will be leaving for the Labor Day extended weekend. For now, I can still play the long side if the SP holds the 1010.00 area.

For today’s trading session, if we don’t have any follow through to the downside, we could see the SP testing once more the 1032.00 level, buying a weak opening that holds the 1013.00-1010.00 is my best idea until this pattern gets resolved.

TODAY’S SESSION

For today’s trading roadmap and intraday updates, please read the authors bio.

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