E-mini trading advisory for Sept. 24

DAILY TRADING ADVISORY 24-September-2009

Fed leaves rates unchanged and indicates that it will extend its debt buying plan through March, markets rallied as the Fed indicates that the economy has picked up but sold off into the end.

ECONOMIC DATA

8:30 AM Initial Claims

8:30 AM Continuing Claims

10:00 AM Existing Home Sales

YESTERDAY’S MARKET

With the markets trading slightly higher for the opening, the E-mini SP started the session at 1068.75 and after trading in a narrow range it pushed down to 1065.00. With low trading volumes support came into play and the index bounced to 1068.00. Unable to trade higher and under pressure by the weakness in the Russell and the 4% drop in crude oil, the SP sold off to 1062.25. The index bounced to 1065.00, backed off posting a higher low and slowly pushed up reaching 1069.25 before the Fed announcement. With the news out, the SP pushed up to 1073.75, pulled back a couple of points and moved up to a new high at 1075.75. Later, the index pulled back to 1068.50 and after bouncing to 1072.25 it sold off to 1066.50, try to hold, and sold off once more heavily reaching 1055.00 before bouncing into the close. For the day, the SP lost 8.25 points and settled at 1059.00, the Nasdaq closed lower by 8.75 points at 1725.50 and the Russell finished with a 5.40 points loss at 713.40. The Dow lost 81 points finishing the session at 9748.

MARKET COMMENTARY AND OUTLOOK

Yesterday I wrote: “Today, we have the FOMC rate decision, rates will stay lower, no changes expected. As in every date in which the market expects a rate decision, the indexes will probably make an early trend move, after that, volumes will be ultra light as traders wait for the news. Many times, the early move gets reversed about 20 minutes before the release of the announcement. Once the news gets released, we normally have three different moves, the first one, a false impulsive move that gets exhausted, its reversal and then, after 30 to 40 minutes after the release, a third move that we should try to follow, that is normally a trend move; traders with limited funds on their accounts, may avoid trading during the day. Look for an up move if the Nasdaq is over performing the SP.”

Markets pulled back during the early session, rallied with the news and sold off into the close. As the SP has been traded in a sideways pattern between today’s high and this week low at the 1051.50, it seems that the way in which the markets will digest the last leg is a consolidation of the move and not a strong correction. Support keeps coming at high levels and the sell offs has been limited in price and time.

Obviously this scenario is correct all the time that the SP holds above the 1051.50 area and the Nasdaq maintain the 1700.00 level, however, if those fail, the SP may find support at the 1038.50 area and will have to rally not later than the fourth day in which that market close lower.

Also, I have wrote in the past that many times, markets reverse the FOMC meeting move, that means that if yesterday was a red session, today, the indexes may try to come back, if this scenario comes true, our intraday strategy may keep us on the long side all the time that the markets are trading in the green. But if the markets are trading lower only a double bottom at 1051.50 could attract buyers.

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

1079.75-1080.00

1757.00-1758.00

624.60-625.50

Resistance 3

1070.00-1071.50

1743.00-1745.50

620.60-621.40

Resistance 2

1067.00-1068.00

1736.00-1738.00

617.20-618.80

Resistance 1

1061.00-1063.00

1728.50-1731.00

614.60-615.80

PIVOT

1063.00

1733.00

616.20

Support 1

1057.00-1055.50

1722.50-1720.50

612.20-611.00

Support 2

1053.00-1051.50

1716.00-1714.00

609.20-608.30

Support 3

1047.00-1046.00

1707.00-1706.00

605.70-603.90

Support 4

1043.00-1041.50

1700.50-1699.00

600.20-598.50

S&P

NASDAQ

RUSSELL

FIBONACCI

FIBONACCI

FIBONACCI

1162.88

1891.38

679.9

1129.42

1838.34

658.5

1108.92

1805.84

645.4

1096.25

1785.75

637.3

1088.42

1773.34

632.3

1075.75

1753.25

624.2

1067.92

1740.84

619.2

1065.50

1737.00

617.7

1063.08

1733.17

616.1

1055.25

1720.75

611.1

1042.58

1700.67

603.0

1034.75

1688.25

598.0

1022.08

1668.17

589.9

1001.58

1635.67

576.8

968.13

1582.63

555.4

DAILY PROJECTIONS

S&P

NASDAQ

RUSSELL

AS DAILY HIGH

1067.00

1739.00

618.80

AS DAILY LOW

1046.50

1706.00

605.70

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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