E-mini trading advisory for Sept. 25

DAILY TRADING ADVISORY 25-September-2009

Existing Home sales unexpectedly lower than expected and initial and Continuing Claims lower gave way to a strong sell off.

ECONOMIC DATA

8:30 AM Durable Goods Orders

9.55 AM Michigan Sentiment revision

10:00 AM New Home Sales

YESTERDAY’S MARKET

While fluctuating during the Globex session, the E-mini SP started the day at 1060.50 and after pushing up to 1061.50 the market started a downtrend session. The index fell to 1057.00, bounced a couple of points and sold off strongly to 1050.00. Unable to bounce, sellers pressed the markets lower, the SP reached 1043.00 where the selling lost its steam. Then, the markets traded in a sideways pattern that finally gave way to a new low at 1041.00. The SP bounced to 1045.00 and during the last hour of the session posted a double top at the 1048.50 area that gave way to a pullback into the end of the day. For the session, the SP lost 14.75 points and settled at 1044.25, the Nasdaq and Russell both closed lower as well. The Dow lost 41 points finishing the day at 9707.

MARKET COMMENTARY AND OUTLOOK

We came into yesterday’s session looking for the markets to be trading in the green in order to stay long, once the indexes fell into negative territory, sellers took control and pushed the markets strongly lower, we also indicated the strong resistance level, 1061.00-1063.00, the opening action that failed to push the SP above those areas showed the indicated weakness.

Yesterday’s strong sell off may be seen as a first degree correction, a three to four days setback that may give way to another run, this time to new highs. However, for this scenario to be correct and for the markets to move up, the time window must hold, and the 1038.50 area may hold on a closing base.

When a reversal as the one that we saw last Wednesday comes from a new high markets indicate some sort of top, so even if today we have a consolidating session, something normal after a wide range trend session it won’t be easy for the markets to get back to the highs, some elaborated pattern, once the bottom gets posted in this correction may be seen.

For today’s trading session, the 1041.00 area may hold, failing there and trading a bit lower may result on a false downside break, so be careful and don’t get short at the lows, look for a possible narrow range session in which the 1040.00-1050.00 range comes into play.

TODAY’S SESSION

Sorry, but I am still sick and this is what I was able to post.

TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS

S&P

NASDAQ

RUSSELL

Resistance 4

1058.50-1060.00

Resistance 3

1054.00-1056.00

Resistance 2

1050.00-1051.50

Resistance 1

1047.00-1048.00

PIVOT

1049.75

Support 1

1042.00-1040.00

Support 2

1037.00-1035.50

Support 3

1031.50-1031.00

Support 4

1028.50-1027.00

DAILY PROJECTIONS

S&P

NASDAQ

RUSSELL

AS DAILY HIGH

1054.00

AS DAILY LOW

1031.50

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

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