DAILY TRADING ADVISORY 10-June-2009
Texas Instruments positive outlook and JP Morgan, one of the 10 banks that U.S. will let pay the TARP funds in show of confidence gave way to another consolidating session with mixed closes.
ECONOMIC DATA
10:00 AM Trade Balance
10:35 AM Crude Inventories
2:00 PM Treasury Budget
2:00 PM Fed’s Beige Book
YESTERDAY’S MARKET
Markets opened on the green, the E-mini SP started the session at 942.00 and after pulling back to 940.50 it bounced to 943.50. During the first minutes of the session the SP traded in the opening range and pushed higher to a new intraday high at 945.25. With traders concentrating on the spread between the June and September contracts markets backed off to new lows at 939.00. After bouncing back to 942.00, posting a low at 938.00 and printing a lower high, the SP backed off to 935.50 from where it traded in a narrow range above the lows. The SP broke above the trading range and reached 939.00 and after sitting there for a few minutes, it pushed higher to 942.00 where the bounce stalled. After a pullback to 939.50, the index bounced and tested the 943.00 area, pulled back to 939.00 and bounced once more forming a triangle pattern that finally get broke to the upside pushing the markets to new highs, the SP reached 944.50, pulled back a bit and pushed to a new high reaching 947.00. Later the index traded lower, tested 941.50, bounced to 945.00, and pulled back into the end of the session. For the day, the SP closed almost unchanged at 939.50; the Nasdaq added 10.25 points ending the session at 1500.75 and the Russell added .90 points ending at 526.10. The Dow lost 1.00 and finished at 8763.
.
.
MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote: “Last Friday’s high and its reversal appeared to have all the symptoms of a false break, a higher opening, early highs during the first minutes of the session, and the consequent sell off; today, the continuing pattern and weakness, seemed to give the keys to the bears, however the late bounce keep showing strong support on the pullbacks and biding at lower prices. On yesterday’s newsletter I mentioned the possibility of a three day pullback but also the chance for a neutral close around the 940.00 area which could give way for a test of the 958.50 area that was printed on the last Friday Globex’s session. That scenario is still possible but faces strong resistance around the 949.00 previous high areas; a lower high could give way to a more sizeable pullback. So the story has not been written yet and the next move is still unsure, but even if the markets are overbought and showing some vulnerability at these levels, they certainly look strong. For today’s trading session, the economic reports will continue to be very light and the markets may continue to fluctuate, so selling near resistance areas and buying above support may be a good idea, IF the 928.00 area holds.”
Markets continued to consolidate keeping a strong position and upward bias. The recent action and the size of the attempted pullbacks makes me think that the markets may be able to push higher and post new highs in the next coming sessions. However, multiple closes around the same level also shows a lack of buying, there is not selling, but there is not new buying coming into the markets.
So, uncertainty and more of the same may be seen, but the pattern may get resolved today after the Fed’s Beige Book gets released. Also, the rollover from the June to the September contract which kept traders concentrated on it and probably will keep them busy during today’s session, may made difficult for the markets to post the next important move.
The SP has been able to hold the sell off attempts and it has managed to maintain the 918.00 level, but if that index won’t get its foot going, then a wide range negative session could be seen. But for now and until the pattern of trading gets resolved, trading both sides of the range sounds good, obviously, the upside bias could get strong momentum once the SP closes above the 950.00 level.
The Nasdaq looks more bullish but the most recent highs still continue to be an obstacle, if that index can maintain its leading position, it should help the other markets to move up.
For today’s trading session, a lower opening could give way to a more intensive selling activity,, so be careful on the long side if the markets area trading in the red, but if the SP breaks above 946.50 that may be all for the shorts.
TODAY’S SESSION
There is resistance at 941.50-942.50 on the SP, 1502.50-1504.50 on the Nasdaq and 527.70-528.90. If the markets trade above them, look for levels near yesterday’s highs at 944.50-946.50 on the SP, 1510.00-1512.00 on the Nasdaq and 529.90-531.00 on the Russell. Nothing good happens all the time that the markets do not break above them, if the breakout finally happens look for the indexes to trade at their next resistance areas at 950.50-953.00 on the SP, 1520.00-1522.00 on the Nasdaq and 534.30-535.30 on the Russell.
There is good support at 936.00-934.00 on the SP, 1495.00-1494.00 on the Nasdaq and 524.00-523.10 on the Russell. Trading below them may give shorts the needed momentum to start and press down pushing the indexes to 930.00-928.50 on the SP, 1490.00- 1488.00 on the NQ and 521.10-519.60, if those can not hold, we may be in front of a strong sell off once the next support areas at 926.00-925.00 on the SP, 1482.00-1480.50 on the Nasdaq and 517.70-516.20 on the Russell fail to hold. GOOD LUCK.
|
TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS |
|||
|
S&P |
NASDAQ |
RUSSELL |
|
|
Resistance 4 |
958.50-959.75 |
1531.00-1534.50 |
540.20-541.80 |
|
Resistance 3 |
950.50-953.00 |
1520.00-1522.00 |
534.30-535.30 |
|
Resistance 2 |
944.50-946.50 |
1510.00-1512.00 |
529.90-531.00 |
|
Resistance 1 |
941.50-942.50 |
1502.50-1504.50 |
527.70-528.90 |
|
PIVOT |
940.25 |
1499.00 |
526.70 |
|
Support 1 |
936.00-934.00 |
1495.00-1494.00 |
524.00-523.10 |
|
Support 2 |
930.00-928.50 |
1490.00-1488.00 |
521.10-519.60 |
|
Support 3 |
926.00-925.00 |
1482.00-1480.50 |
517.70-516.20 |
|
Support 4 |
921.00-919.50 |
1476.50-1474.00 |
513.60-511.90 |
|
S&P |
NASDAQ |
RUSSELL |
|
FIBONACCI |
FIBONACCI |
FIBONACCI |
|
1077.94 |
1704.31 |
619.8 |
|
1027.75 |
1619.04 |
582.5 |
|
997.00 |
1566.79 |
559.6 |
|
978.00 |
1534.50 |
545.4 |
|
966.25 |
1514.54 |
536.7 |
|
947.25 |
1482.25 |
522.5 |
|
935.50 |
1462.29 |
513.8 |
|
931.88 |
1456.13 |
511.1 |
|
928.25 |
1449.96 |
508.3 |
|
916.50 |
1430.00 |
499.6 |
|
897.50 |
1397.71 |
485.4 |
|
885.75 |
1377.75 |
476.7 |
|
866.75 |
1345.46 |
462.5 |
|
836.00 |
1293.21 |
439.6 |
|
785.81 |
1207.94 |
402.3 |
|
DAILY PROJECTIONS |
S&P |
NASDAQ |
RUSSELL |
|
AS DAILY HIGH |
958.50 |
1502.00 |
531.50 |
|
AS DAILY LOW |
927.75 |
1450.00 |
508.60 |
