DAILY TRADING ADVISORY 28-July-2009
New Home sales jumps 11%, the highest in nearly nine years. Markets consolidate but closed on the green.
ECONOMIC DATA
9:00 AM Consumer Confidence
9:00 AM S&P CaseShiller Home Price Index
YESTERDAY’S MARKET
After reaching 984.00 during the Globex session, the E-mini SP started the day at 974.00 and after pushing up to 976.25 it pulled back to the 973.00 level. After holding just at my support area, the index bounced back up to 976.50, unable to break higher, the index pulled back once more, this time to 973.50 and once the economic data get released it pushed up to 979.50 where sellers stepped in and sold the markets off. The SP pushed down to 972.00, bounced back to 973.50 and pushed to a new low at 969.00, just at my support areas. The index then started to rebound reaching 972.50 and then 975.75. With the volumes running light, the index traded quietly on a sideways pattern. After testing the 970.75 level, the index bounced back to 978.25 and traded quietly with low volumes. After another pullback to 974.00, markets pushed higher closing near the highs, for the day, the SP added 2.25 points and settled at 980.00, the Nasdaq closed higher by 2.25 points at 1599.50 and the Russell gained 1.70 finishing the session at 549.50. The Dow closed higher by 15 points at 9108.
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MARKET COMMENTARY AND OUTLOOK
Yesterday I wrote: “We have not seen any signs that the rally has ended, markets tend to exaggerate their moves, and this one, could get extended. At this point is highly risky to take short, unless you want to catch a high by posting a stop loss order just above the late high. I personally prefer to stay with this strong trend until I see some signs of a correction. For today’s trading session, beware of a wide up opening gap, wait to see if the index retreats and then on signs of support get long. If the opening does not show any strong move, wait for the first pullback in order to try to enter long, short trades, lets be careful and wait and see how the session take place. The recent pattern may continue to play.”
Markets consolidated during the session, volumes were light, typical for a Monday and the same pattern of trading where the sell off attempts turned into buying opportunities continued to be in play.
Yesterday’s session was the first one in which all the markets were under pressure, the back and forth action finally turned markets higher posting their closes near the daily highs, the intraday highs, because the Globex highs remained intact during all the day.
As we look for signs of a correction I have mentioned that every time that the indexes close at their highs, some exhaustion seem to be present, but yesterday’s action seems to signal some accumulation that will get resolved pushing the markets higher, the SP may be able to trade above the 1000.00 level, another wide range positive session may be seen. Obviously, in this business everything is a possibility, not a “must”, so my work at this moment is to look for signs of weakness, of a turnaround in the trend, and those signs are not present.
So I will continue to play the game in the same way, try to stay on the long side getting long on the pullbacks as long as the recent pattern remains intact, a lower opening, around 974.50 may be a good buying opportunity.
TODAY’S SESSION
There is resistance below yesterday’s Globex highs at 981.50-982.50 on the SP, 1602.50-1605.00 on the Nasdaq and 550.40-552.10 on the Russell, a double top at those areas, in particular on the early part of the session may give way to another consolidating session or a close on the red, but if those get exceeded, the markets, may be able to reach 984.50-986.00 on the SP, 1609.00-1612.00 on the Nasdaq and 554.00-554.80 on the Russell. If those do not get reversed, then the remaining shorts may look for the exit pushing the indexes up to 989.00-989.50 on the SP, 1616.00-1618.00 on the Nasdaq and 557.70-558.90 on the Russell.
There is support at 978.50-977.25 on the SP, 1596.00-1594.00 on the on the Nasdaq and 548.60-546.90 on the Russell. If the markets open above them, look for initial strength, but if those get violated before or during the session, then the indexes may go for a test of 975.00-974.50 on the SP, 1591.00-1589.00 on the NQ and 544.20-544.00. Holding above them will certainly give way to anew high, but if they fail, then look for support at 971.75-971.00 on the SP, 1583.00-1582.00 on the Nasdaq and 541.80-540.50 on the Russell. GOOD LUCK.
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TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS |
|||
|
S&P |
NASDAQ |
RUSSELL |
|
|
Resistance 4 |
992.50-993.00 |
1624.00-1626.50 |
563.20-564.50 |
|
Resistance 3 |
989.00-989.50 |
1616.00-1618.00 |
557.70-558.90 |
|
Resistance 2 |
984.50-986.00 |
1609.00-1612.00 |
554.00-554.80 |
|
Resistance 1 |
981.50-982.50 |
1602.50-1605.00 |
550.40-552.10 |
|
PIVOT |
977.50 |
1595.50 |
548.10 |
|
Support 1 |
978.50-977.25 |
1596.00-1594.00 |
548.60-546.90 |
|
Support 2 |
975.00-974.50 |
1591.00-1589.00 |
544.20-544.00 |
|
Support 3 |
971.75-971.00 |
1583.00-1582.00 |
541.80-540.50 |
|
Support 4 |
966.00-965.00 |
1575.00-1573.50 |
538.50-537.60 |
|
S&P |
NASDAQ |
RUSSELL |
|
FIBONACCI |
FIBONACCI |
FIBONACCI |
|
1047.75 |
1738.63 |
593.0 |
|
1023.27 |
1688.85 |
577.3 |
|
1008.27 |
1658.35 |
567.7 |
|
999.00 |
1639.50 |
561.8 |
|
993.27 |
1627.85 |
558.1 |
|
984.00 |
1609.00 |
552.2 |
|
978.27 |
1597.35 |
548.5 |
|
976.50 |
1593.75 |
547.4 |
|
974.73 |
1590.15 |
546.3 |
|
969.00 |
1578.50 |
542.6 |
|
959.73 |
1559.65 |
536.7 |
|
954.00 |
1548.00 |
533.0 |
|
944.73 |
1529.15 |
527.1 |
|
929.73 |
1498.65 |
517.5 |
|
905.25 |
1448.88 |
501.8 |
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DAILY PROJECTIONS |
S&P |
NASDAQ |
RUSSELL |
|
AS DAILY HIGH |
989.50 |
1619.50 |
555.70 |
|
AS DAILY LOW |
974.50 |
1589.00 |
546.10 |
