DAILY TRADING ADVISORY 08-September-2009
Unemployment rate at 26 year high, 9.7%, Nonfarm payrolls minus 216K; markets rallied in front of the Labor Day extended holiday weekend.
ROLLOVER DAY IS ON THURSDAY 10 SEPTEMBER 2009
WEEKLY PIVOTS FOR WEEK ENDING 08-September-2009
R3 1073.00
R2 1052.00
R1 1033.00
PP 1012.00
S1 1003.00
S2 992.00
S3 972.00
ECONOMIC DATA
2:00 PM Consumer Credit
WEEKLY RECAP
With Chinese stocks trading sharply lower, the U.S. markets started the week under pressure. Regardless of a better than expected Chicago PMI report which came out at 50.0, the indexes closed lower for the session, 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. Markets sold off during Tuesday’s trading session, heavy losses despite the better than expected ISM Manufacturing Index report which gave way to an early rally that failed and get furiously reversed pushing the indexes down on bank concerns, the SP lost 23.00 points and settled at 996.75, the Nasdaq closed lower at 1596.00 with a 29.00 points loss and the Russell finished the session at 557.30, minus 14.40 points. The Dow lost 185 points closing the day at 9310. Wednesday’s session markets consolidated the previous day wide range trading session, volumes continue to be light in front of the Friday’s unemployment data in this pre holiday week. On the economic news, ADP Employment data was higher than expected, Productivity up 6.6% and U.S. factory orders up 1.3%. The FOMC minutes indicated that the recession ended in August, and markets reacted with apathy to the news, 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. Thursday’s session was more of the same, ultra light volumes and markets posting a narrow range session. The weekly Initial Claims data came out at 570K and Continuing Claims at 6.23 million, ISM Services Index was up but below the 50 mark. Friday’s started the day on the green and the pre opening announcement of the monthly job numbers gave way to a spike, before the opening markets gave back most of the gains, opened with a back and forth move that finally resulted in a good rally. The Unemployment rate reached 9.7%, a 26 year high but less jobs were lost during the month. For the day, the SP added 12.25 points closing at 1014.00, the Nasdaq which leaded the upside gained 31.75 points and settled at 1635.75 and the Russell closed higher by 7.20 points at 567.80.The Dow added 96 points closing the week at 9441. for the week all the markets closed with losses.
FRIDAY’S MARKET
Markets fluctuated during the nigh, before the opening, once the Unemployment numbers get released, the E-mini SP made a spike that reached 1009.75. With the normal volatility that carried the news, the index pushed down to 1000.50 and started the session at 1003.75. After backing off a couple of points, the SP bounced to 1006.50 where a double top gave way to a pullback that tested the after announcement low. The markets held and the SP rallied to 1008.25, it pulled back to 1004.00, it held and rallied once more. Once the Globex high get exceeded, the index made it to 1013.75. After a few minutes in which the markets traded in a sideways pattern, the SP pushed higher reaching 1015.75 where the rally stalled. Once more, the SP pulled back to the 1012.00 level and with lighter volumes it traded in a narrow range. After trading at 1011.50, the E-mini SP bounced near the daily highs. Unable to break higher, the index pulled back to 1012.50, posted a new marginal high at 1016.25 and pulled back into the close. For the day, the SP added 12.25 points closing at 1014.00, the Nasdaq which leaded the upside gained 31.75 points and settled at 1635.75 and the Russell closed higher by 7.20 points at 567.80.The Dow added 96 points closing the week at 9441.
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MARKET COMMENTARY AND OUTLOOK
Markets rallied on the news trading solidly during all the session in a pre holiday Friday and closing near to best intraday levels, no profit taking was seen in front of the extended weekend. Last week trading activity, saw the SP failing to hold above the previous support levels as the Tuesday sell off pushed all the markets sharply lower. However, there was not follow through to the downside and after two days of narrow ranges and consolidation markets bounced once more during last Friday closing near resistance areas.
When a market is trading in this way, after a new high, and fails to trade higher and gets reversed, a short term top could be printed in the charts, but for that to happen, the initial correction has to last for more than three consecutive sessions or despite a wide range session in the opposite direction of the primary trend, like the one that happened last Tuesday, it is only a countertrend move that keeps the main trend intact.
Last week correction was not able to push lower, the 978.00 area from where the SP rallied to the last highs was not tested, the index posted a higher low. This does not give evidence that the index is ready to push to a new high, but that is the most probable scenario, but also a lower high could be seen.
So, if Friday’s move is the first step for another test of the highs or a new high, near the 1060.00 area that I have been calling during the past weeks, Tuesday has to be a positive session, I am not expecting a strong upside move, but I do expect the indexes to continue to push higher, last Tuesday’s highs around the 1028.50 area may be a good objective for the first trading day after the holiday. Watch closely the Nasdaq, 1650.00 will have to get exceeded in order to place that index in a strong position.
TODAY’S SESSION
There is resistance around Friday’s highs at 1015.50-1017.00 on the SP, 1640.00-1642.00 on the Nasdaq and 569.00-570.10 on the Russell. If the day will be slow and markets will consolidate, those could hold, but if the bias is to the upside, the markets may reach 1019.00-1020.50 on the SP, 1648.50-1650.00 on the Nasdaq and 572.80-573.50 on the Russell. Those levels on the Nasdaq have acted as good resistance, so if a run to them gets reversed, be careful with any long trade, but if those get exceeded, look for the rally to continue as the indexes reach 1023.00-1023.50 on the SP, 1657.75-1658.50 on the Nasdaq and 575.30-577.00 on the Russell.
There may be good support at 1012.00-1011.00 on the SP, 1632.00-1630.00 on the Nasdaq and 565.50-564.30 on the Russell. Those levels are very important, on the SP, just above the 1010.00 level and at its weekly pivot, on the Nasdaq at the previous KEY resistance, the 1632.00 level. If those hold, we could see a strong session, but if they fail, look for weakness to reappear as the markets push down to 1007.00-1005.50 on the SP, 1625.75-1623.00 on the Nasdaq and 560.80-560.10 on the Russell. Failing to hold down there will probably result in a move to last Friday’s early lows at 1002.00-1000.50 on the SP, 1618.00-1618.00 on the Nasdaq and 556.80-555.20 on the Russell. GOOD LUCK.
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TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS |
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|
S&P |
NASDAQ |
RUSSELL |
|
Resistance 4 |
1026.00-1028.00 |
1665.00-1666.00 |
579.80-580.50 |
|
Resistance 3 |
1023.00-1023.50 |
1657.75-1658.50 |
575.30-577.00 |
|
Resistance 2 |
1019.00-1020.50 |
1648.50.1650.00 |
572.80-573.50 |
|
Resistance 1 |
1015.50-1017.00 |
1640.00-1642.00 |
569.00-570.10 |
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PIVOT |
1010.00 |
1625.50 |
565.10 |
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Support 1 |
1012.00-1011.00 |
1632.00-1630.00 |
565.50-564.30 |
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Support 2 |
1007.00-1005.50 |
1625.75-1623.00 |
560.80-560.10 |
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Support 3 |
1002.00-1000.50 |
1618.00-1616.00 |
556.80-555.20 |
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Support 4 |
994.00-993.00 |
1612.50-1610.50 |
552.40-551.10 |
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S&P |
NASDAQ |
RUSSELL |
|
FIBONACCI |
FIBONACCI |
FIBONACCI |
|
1085.31 |
1810.50 |
624.1 |
|
1058.79 |
1745.22 |
603.3 |
|
1042.54 |
1705.22 |
590.6 |
|
1032.50 |
1680.50 |
582.8 |
|
1026.29 |
1665.22 |
577.9 |
|
1016.25 |
1640.50 |
570.1 |
|
1010.04 |
1625.22 |
565.2 |
|
1008.13 |
1620.50 |
563.8 |
|
1006.21 |
1615.78 |
562.3 |
|
1000.00 |
1600.50 |
557.4 |
|
989.96 |
1575.78 |
549.6 |
|
983.75 |
1560.50 |
544.7 |
|
973.71 |
1535.78 |
536.9 |
|
957.46 |
1495.78 |
524.2 |
|
930.94 |
1430.50 |
503.4 |
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DAILY PROJECTIONS |
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S&P |
NASDAQ |
RUSSELL |
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AS DAILY HIGH |
|
1023.25 |
1658.00 |
575.20 |
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AS DAILY LOW |
|
1007.00 |
1618.00 |
562.60 |
