E-mini trading advisory for Sept. 3

DAILY TRADING ADVISORY 03-September-2009

ADP Employment data higher than expected, Productivity up 6.6%, U.S. factory orders up 1.3%. FOMC minutes indicate that the recession ended in August, markets fluctuated during the day.

ECONOMIC DATA

8:30 AM Initial Claims

10:00 AM ISM Services Index

YESTERDAY’S MARKET

With the markets fluctuating during the Globex session, the E-mini SP started the day at 993.00 and after testing the 992.00 level it bounced to 996.50. The index pulled back to 992.75 and rallied once more to 998.50. As the lack of direction continued, the SP backed off once more and kept trading between the intraday highs and lows. Later, the index pushed down to a new low at 991.00. The lows held and the markets bounced, the SP almost reached 1000.00, but the sideways pattern continue for all the session, at the end, markets pushed down testing the 992.75 closing with moderate losses. For the day, the SP lost 2.50 points closing at 994.00, the Nasdaq ended lower by 3.75 points at 1591.75 and the Russell closed at 554.40, minus 3.10 points for the day. The Dow lost 29 points closing at 9280.

MARKET COMMENTARY AND OUTLOOK

Markets fluctuated in a non event session, new intraday lows were posted but there was not selling pressure after the previous session sell off.

Yesterday’s expected consolidating session is something normal after a wide range session, the bouncing attempts, failed bouncing attempts and low buying and selling volumes may be something that may continue until next Friday when the monthly unemployment figures get released, and once markets react to the numbers, traders will be leaving for the extended holiday weekend.

There is not too much to add to the next possible move, if yesterday’s session was only a consolidation of a fast down move, today may be a negative session, if the markets will wait for Friday’s numbers another consolidating session may be seen. As yesterday, be very careful with any long trade if the indexes area trading lower.

TODAY’S SESSION

There is resistance at 996.00-997.00 on the SP, 1595.00-1596.50 on the Nasdaq and 555.60-556.20 on the Russell, if markets area weak those may hold, but if there is some short covering rally in front of next Friday data, then a visit to yesterday’s highs at 999.50-1001.00 on the SP, 1599.50-1601.50 on the Nasdaq and 558.80-560.50 on the Russell may be seen. If those hold, look for another sideways pattern session, but if those get exceeded, 1005.00-1006.00 on the SP, 1606.00-1608.00 on the Nasdaq and 558.80-560.50 on the Russell may get tested before the session is over.

There is support at 992.00-991.25 on the SP, 1588.50-1586.50 on the Nasdaq and 553.00-551.20 on the Russell. A double bottom there will give way to an 8.00-10.00 point rebound on the SP, but if the markets trade lower, the last chance of holding may be at 988.50.987.00 on the SP, 1582.00-1580.00 on the Nasdaq and 549.20-548.50 on the Russell. If the SP fails there, expect the downside to gain momentum, that may push the SP to the 981.00 area.

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