DAILY TRADING ADVISORY 25-August-2009
Markets consolidated Friday’s rally and fluctuated posting new intraday highs.
ECONOMIC DATA
9:00 AM S&P CaseShiller Home Price Index
10:00 AM Consumer Confidence
YESTERDAY’S MARKET
Markets trade higher during the night giving way to a positive opening, the E-mini SP started the session at 1029.50 and after pulling back to 1027.50 pushed up reaching 1032.50. The index retreated to 1028.50 posting a higher low, longs joined the market and the SP made it all the way up to 1034.50, a feeble pullback get bought and the index reached 1035.00. The rally stalled, the Globex NQ’s high at 1648.25 remained intact and the SP pulled back to 1032.25, later, the SP finally broke below the 1028.00 area and pushed down to 1023.50, it bounced to 1027.50 just to fall to a new low at 1021.25. Markets held the profit taking attempt and the SP bounced back to 1026.00, pulled back to test the lows and pushed up into the close and settled almost unchanged for the day. For the session, the SP closed at 1024.50, the Nasdaq lost 1.50 points closing at 1634.50 and the Russell closed lower by .70 points at 579.80. The Dow closed almost unchanged at 9509.
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MARKET COMMENTARY AND OUTLOOK
Last Friday I wrote: “I think that Monday may be a consolidation day after the wide range up Friday and only a total reversal of Friday’s trend and a close below the 1000.00 area will indicate that this was a false break, I don’t’ think this is the case. So an inside range session is the most probable scenario for this Monday, that means that the index may trade between the 1025.00 to 1010.00 areas, volumes will continue to be light and selling near the resistance areas and buying close to support with tight stops is the best play, I will keep a slightly bullish bias, by that I mean that I will give preference to enter long on the pullbacks, the reason, last Friday move took many short traders by surprise, those will have to cover giving support to the markets.”
Markets traded higher reaching higher highs before pulling back into the close.
As we consider that this can be the last leg of the rally, the indexes has reached levels that may be the short term top or near the top, the SP almost reached my 1038.00 area which I have been mentioning for a long period, and the Nasdaq which lost its steam during the last month made a new high that needs another 1.5% push to reach my expected 1675.00 area.
But the last sell off attempt was limited in time and it recovered in a quick move, these indicates that a pullback will have to exceed the three to four time windows in order to call a top, so if my scenario is correct and the 1010.50 area manages to hold on a close for the next 72 hours, new highs may be posted, and once the last of the bears threw way the towel, then a wider correction may be seen.
For today’s trading session, surely the Consumer Confidence data will impact the trading session, but as long as the 1016.00 area holds, there is chance that yesterday’s consolidation will get resolved to the upside, however another session where the markets fluctuate could also be seen, in conclusion, I will try to be a buyer on the first decent pullback as long as the SP is trading above the 1016.00 area.
TODAY’S SESSION
There is resistance at 1026.50-1028.00 on the SP, 1637.50-1639.00 on the Nasdaq and 581.50-582.40, those acted as pivot points on yesterday’s trading session, so an early bounce that fails near that levels may give way to a good pullback, but if those areas get exceeded look for the indexes to trade higher reaching 1031.00-1032.50 on the SP, 1637.50-1639.00 on the Nasdaq and 585.00-585.80 on the Russell. If the rally does not stall there the markets may reach 1034.50-1035.00 on the SP, 1649.50-1651.00 on the Nasdaq and 588.80-590.50 on the Russell. I assume that the first time the SP gets there it will try to post a double top.
There is support at 1023.00-1022.00 on the SP, 1630.50-1628.00on the Nasdaq and 578.10-577.20 on the Nasdaq. If those do not hold, look for the pullback to reach 1018.50-1017.00 on the SP, 1625.00-1623.00 on the Nasdaq and 575.60-574.30 on the Russell. Nothing bad happens if those hold, but if they fail, look for the profit taking to continue pushing the indexes down to 1015.50-1013.00 on the SP, 1618.50-1616.75 on the Nasdaq and 571.70-570.50 on the Russell. GOOD LUCK.
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TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS |
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S&P |
NASDAQ |
RUSSELL |
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Resistance 4 |
1040.50-1042.00 |
1656.50-1658.00 |
593.70-594.40 |
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Resistance 3 |
1034.50-1035.00 |
1649.50-1651.00 |
588.80-590.50 |
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Resistance 2 |
1031.00-1032.50 |
1644.50-1645.00 |
585.00-585.80 |
|
Resistance 1 |
1026.50-1028.00 |
1637.50-1639.00 |
581.50-582.40 |
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PIVOT |
1027.00 |
1637.00 |
581.10 |
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Support 1 |
1023.00-1022.00 |
1630.50-1628.00 |
578.10-577.20 |
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Support 2 |
1018.50-1017.00 |
1625.00-1623.00 |
575.60-574.30 |
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Support 3 |
1015.50-1013.00 |
1618.50-1616.75 |
571.70-570.50 |
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Support 4 |
1011.00-1010.50 |
1611.00-1609.00 |
566.30-565.80 |
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S&P |
NASDAQ |
RUSSELL |
|
FIBONACCI |
FIBONACCI |
FIBONACCI |
|
1093.44 |
1731.13 |
626.4 |
|
1071.00 |
1699.30 |
611.0 |
|
1057.25 |
1679.80 |
601.6 |
|
1048.75 |
1667.75 |
595.8 |
|
1043.50 |
1660.30 |
592.2 |
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1035.00 |
1648.25 |
586.4 |
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1029.75 |
1640.80 |
582.8 |
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1028.13 |
1638.50 |
581.7 |
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1026.50 |
1636.20 |
580.6 |
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1021.25 |
1628.75 |
577.0 |
|
1012.75 |
1616.70 |
571.2 |
|
1007.50 |
1609.25 |
567.6 |
|
999.00 |
1597.20 |
561.8 |
|
985.25 |
1577.70 |
552.4 |
|
962.81 |
1545.88 |
537.1 |
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DAILY PROJECTIONS |
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S&P |
NASDAQ |
RUSSELL |
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AS DAILY HIGH |
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1029.75 |
1641.00 |
587.80 |
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AS DAILY LOW |
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1016.00 |
1621.50 |
578.40 |
