ISM Index above the 50
marks
and Construction Spending better than expected resulted in a volatile session with wild swings bringing the
U.S.
markets to a positive close.
ECONOMIC DATA
8:15
a.m.
ADP Employment
10:00
a.m.
Factory Orders
10:30
a.m.
Crude Inventories
YESTER
DAY’S
MARKETS
After
tumbling twice during the trading session, the markets managed to stabilize and rally closing positive for the day. It was a volatile session for the
U.S.
equity markets.
The indexes opened sharply lower following the weakness on the European markets and higher crude oil prices during the Globex session. The E-mini
S&P 500
opened at 1267.00 and rallied strong before the release of the construction spending and ISM Index data reaching the 1280.50 level. Once the data got released the indexes pulled back strongly as quick as they earlier rally, the E-mini
S&P 500
pushed lower testing the 1371.50. Buyers stepped in and the indexes rallied back to new highs, the E-mini
S&P 500
reached 1283.50 while the E-mini Nasdaq got as high as 1859.50. Unable to break above the Globex highs at 1286.50, sellers took advantage of the short covering rally and pushed down strongly
driving the
E-mini
S&P 500
to new daily lows at 1261.00. Once the E-mini
S&P 500
printed a 1-2-3 bottom and the E-mini Nasdaq held its previous lows, the indexes rallied solid and with good momentum and once the E-mini
S&P 500
broke above the 1275.00 area, new buying and short covering
drove
the index to test the Globex highs. Once the upside objective was reached, the markets pulled back,
the E-mini
S&P 500
held nicely above our updated 1278.00 support level and rallied strong into the end of the session closing at its daily highs. For the day, the e-mini
S&P 500
advanced 5.25 points closing at 1286.25, the E-mini
Nasdaq
which printed a bullish reversal ended at 1869.00, plus 23.00 points for the day, and the E-mini Russell settled at 690.10 with a marginal loss of 1.60 points. The Dow cash finished the session at 11382 with a 32 point gain.
MARKET COMMENTARY AND OUTLOOK
Yesterday
I wrote:
“
Yesterday
’s
failed
‘rally
’
or consolidation session, should be enough for the markets to try and move higher in this shorted holiday week where the Unemployment data and
nonfarm
payrolls information will get released on Thursday.
May be that the E-mini
S&P 500
will be able to reach the next level around 1310.00 and perhaps close the gap at 1320.00. H
owever
, yesterday’s early lows around 1275.00 will have to holds on a pullback or we could have another wide range down day. Yesterday I wrote about the possibility that the index move higher in a 2-4 days countertrend move, and obviously, the E-mini
S&P 500
tried to bring the markets up, but the weakness on the E-mini Nasdaq pushed the markets lower. So this mixed picture will have to get resolved with a rally in all the indexes or the current divergences will result in another slide for the
U.S.
markets.
You have to take into account that consolidations at the lows normally break lower and the extreme weakness in the markets made difficult to sustain a rally, so we can have a bit more of sideways action with a mild bullish bias until the next strong move is seen.
”
The markets were able to come back strongly after making lows on the E-mini
S&P 500
near the January and March lows leaving many shorts trapped at the lower range and
below
the 1275.00 intraday pivotal
area
.
We have been waiting for some kind of capitulation to call a short term low and we have been expecting a 2-4 days countertrend move that works out oversold conditions and then, probably, a new leg down on the equity indexes, and it could be that yesterday’s lows, despite the fact that they were done with moderate volumes has met the criteria for that short term rebound that we are expecting. The “triple bottom” on the E-mini
S&P 500
looks extremely obvious to be called a bottom, but I can not argue that it held intact during yesterday’s session.
This could result in another day or two of a bullish advance in this holiday week and in front of tomorrow’s Unemployment and
n
onfarm payrolls numbers, which last month came out a lot worst than expected, so a positive or not so bad number and a positive revision of last month data can lift the markets in the short term after yesterday’s bullish run.
However
, the downtrend is still intact and one or two more days of a struggling advance or consolidation leave the door open for a further slide. I will be very surprise that the “obvious” is the way to go, but sometimes there is no need to look for more complicate patterns and the “easy way”, yesterday’s bottom, bring the indexes back to a more neutral position. Remember that rallies in a bear market can be powerful, but at the end the reversal washes out all those holding long positions. For today’s session, we’ll get the Durable Goods orders and later the Crude oil inventories, that for sure will add volatility to the session, a good number in both of them could push the indexes higher, and if that happens we could see an uptrend day. However, if yesterday’s rally fails, then the way will be open for a strong fall before this shortened holiday week is over. I personally will keep a slightly bullish bias all the time that the 1275.00 area on the E-mini
S&P 500
holds on a pullback, if that happens and the market trades lower near that level during the
early morning I will be a buyer.
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
|
1303.75-1305.00
|
1899.00-1900.50
|
706.30-707.
6
0
|
|
Resistance
3
|
1299.00-1300.25
|
1888.75-1890.25
|
702.50-703.40
|
|
Resistance
2
|
1293.00-1294.50
|
1879.75-1882.00
|
697.80-699.30
|
|
Resistance
1
|
1286.75-1288.50
|
1874.00-1875.50
|
693.20-694.70
|
|
PIVOT
|
1278.00
|
1852.25
|
685.70
|
|
Support
1
|
1383.00-1282.00
|
1863.75-1862.00
|
687.00-685.50
|
|
Support
2
|
1278.00-1277.00
|
1855.25-1854.00
|
682.00-680.80
|
|
Support
3
|
1274.00-1272.50
|
1843.50-1842.00
|
676.60-674.90
|
|
Support
4
|
1268.25-1267.50
|
1834.00-1831.75
|
669.90-668.70
|
| | | |
|
S&P
|
NASDAQ
|
RUSSELL
|
|
FIBONACCI
|
FIBONACCI
|
FIBONACCI
|
|
1328.41
|
1963.01
|
719.08
|
|
1322.34
|
1949.74
|
715.12
|
|
1312.50
|
1928.25
|
708.70
|
|
1302.66
|
1906.76
|
702.28
|
|
1296.59
|
1893.49
|
698.32
|
|
1286.75
|
1872.00
|
691.90
|
|
1276.91
|
1850.51
|
685.48
|
|
1273.88
|
1843.88
|
683.50
|
|
1270.84
|
1837.24
|
681.52
|
|
1261.00
|
1815.75
|
675.10
|
|
1251.16
|
1794.26
|
668.68
|
|
1245.09
|
1780.99
|
664.72
|
|
1235.25
|
1759.50
|
658.30
|
|
1225.41
|
1738.01
|
651.88
|
|
1219.34
|
1724.74
|
647.92
|
| | |
|
|
DAILY PROJECTIONS
|
|
S&P
|
NASDAQ
|
RUSSELL
|
|
|
AS DAILY HIGH
|
|
1299.25
|
1898.75
|
699.40
|
|
|
AS DAILY LOW
|
|
1263.25
|
1843.50
|
682.60
|
| | | | | |
Support,
p
ivot and
r
esistance levels courtesy
of Arturo
Stern
, who authors the E-mini Daily Trading Advisory, which gives technical analysis of all 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.