With the strong move into the close I really thought we could continue to drift higher in the overnight session. After a move towards our second target we got a reversal and stopped out. A small winner to start our second month.
Out @ 10121
P&L Trade Totals
Ex-1 = $139.00
Ex-2 = $59.00
Monday, February 1, 2010
YM Target #1 Hit
Bit of a struggle but they buy it into the cash close.
Out @ 10137
2nd Target @ 10159
Move stop to breakeven @ 10121
***AND CANCEL THE NQ IF YOU STILL HAVE IT WORKING***
Out @ 10137
2nd Target @ 10159
Move stop to breakeven @ 10121
***AND CANCEL THE NQ IF YOU STILL HAVE IT WORKING***
YM Long Entry
Symbol: YM
Chart: 5m
Entry: Buy Limit @ 10121
Stop: 10101
Target 1: 10137
Target 2: 10159
Target 3: 10194
Chart: 5m
Entry: Buy Limit @ 10121
Stop: 10101
Target 1: 10137
Target 2: 10159
Target 3: 10194
NQ Short Entry
Well the market bounced up so where we finish today is anyone's guess. Internals are positive but volume has been light. If we do roll over I like NQ to lead to the downside. And if we continue higher we won't get filled.
Symbol: NQ
Chart: 30m
Entry: Sell Stop @ 1741.50
Stop: 1755.25
Target 1: 1738.00
Target 2: 1727.75
Target 3: 1711.00
Symbol: NQ
Chart: 30m
Entry: Sell Stop @ 1741.50
Stop: 1755.25
Target 1: 1738.00
Target 2: 1727.75
Target 3: 1711.00
Watching NQ
The market's morning push to the upside looks to be running out of steam. The Nasdaq has not confirmed this push up so if we roll over it should lead to the downside. I'm looking for a short entry on the 30min chart. Keep this on your screen.
Today’s Market Guidance
Financial Overview:
The stock market remains in a liquidation watch this morning despite the initial gains on the charts. While the US stock market might be slightly undermined by the talk of US deficits, in the wake of the Obama deficit news, the real impetus of the market could still be derived from the scheduled US data flows. With the Personal Income and Spending readings due out early today and those readings only expected to show minimal gains, it would not seem like the Bull camp will have the information today to totally shift the trend back up. In fact, unless the flow of scheduled data from the US is definitively better than expectations, it could be difficult to throw off the down trend that has developed since the middle of January. While it is possible that the promise of a focus on jobs will drag the stock market out of its bearish track, the market didn't seem to be inclined to embrace that angle in the aftermath of the State of the Union address. Therefore, to shift away from the bearish tilt, probably requires a 'noted' improved in a series of US data points.
Dow:
The March Mini Dow looks to start the session out today with some measure of chart support seen at the even number of 10,000. However, with a pattern of lower highs seen in the March Mini Dow recently, we suspect that the ultimate low for the current move has yet to be seen. While the January 26th Commitment of Traders with Options report for the Dow Jones $5 Index showed a net spec long of roughly 20,000 contracts, that positioning is probably a little overstated because of the slide in prices that was seen after the report was compiled. Therefore, one probably can't rule out addition long liquidation pressure in the face of any fresh selling action early this week.
Momentum studies are declining, but have fallen to oversold levels. The close below the 9-day moving average is a negative short-term indicator for trend. It is a slightly negative indicator that the close was under the swing pivot. The next downside target is now at 9869. Some caution in pressing the downside is warranted with the RSI under 30. The next area of resistance is around 10139 and 10264, while 1st support hits today at 9941 and below there at 9869.
S&P:
While the S&P has managed to avoid a fresh new low for the move overnight, a pattern of lower highs has remained in place and that would seem to leave little in the way of support until the 1050 level. While the January 26th Commitment of Traders with Options report for S&P 500 Stock Index showed the Non-commercial position to be net short 19,745 contracts, with the Non-reportable position net long 48,350 contracts, and that made the 'combined' spec and fund position net long 28,605 contracts as of early last week but that positioning is probably understated due to the losses seen in the market since that report was compiled. The 100 day moving average in the S&P is seen up at 1084.90 today and it might take a close above that level to throw off the bearish tilt in the marketplace.
Momentum studies are declining, but have fallen to oversold levels. The market's short-term trend is negative as the close remains below the 9-day moving average. The market tilt is slightly negative with the close under the pivot. The next downside target is now at 1047.82. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance is around 1082.62 and 1101.31, while 1st support hits today at 1055.88 and below there at 1047.82.
NASDAQ:
With a pattern of lower highs on the charts, the path of least resistance in the Nasdaq looks to remain down at the start of the new trading week. In fact, with the January 26th Commitment of Traders with Options report for Nasdaq Mini showing the Non-commercial position to be net long 30,939 contracts, with the Non-reportable position net long 8,599 contracts, that made the 'combined' spec and fund position net long 39,538 contracts as of early last week. Therefore, the Nasdaq probably remains vulnerable to additional long liquidation pressure. With a number of favorable tech sector earnings reports failing to shift sentiment back in favor of the bull camp, it could take moderately lower price action or a string of improved US data points to alter the bear trend.
US Dollar:
With the Dollar managing another new high for the move early today it would seem like the upward bias in the Dollar remained in place over the weekend. However, with the Non-reportable Net Long position in US Dollar hitting a new record level at 4,369 contracts in the January 26th Commitment of Traders with Options report, and the 'combined' spec and fund position net long 41,795 contracts as of early last week, one could suggest that the Dollar is becoming overbought technically. Apparently talk of a $1.56 trillion US deficit for 2010 wasn't a negative for the US Dollar this morning and that would seem to suggest that the Dollar trade is focused on other issues. Perhaps the trade continues to focus on the prospects of flight to quality flow toward the Dollar, as the trade saw comments from the ECB overnight that Greece would not be given any special treatment with respect to their budget constraints. It also seems as if the currency trade continues to give the Dollar the benefit of the doubt on its ability to drag its economy out of the doldrums, but that view could be challenged later in the week if the US payroll report shows anything disappointing. At least in the near term, the bull camp looks to retain a slight edge, with the March Dollar Index seemingly on a track to reach 80.00.
Gold:
Despite some positive annual price projections from a key brokerage firm, April gold has started the new week out on a slightly soft footing. With mostly favorable economic news overnight and initially favorable US equity price action, one might have expected gold to show some gains, but apparently the gold trade remains concerned about residual Dollar strength. Perhaps the gold market remains limited from last week's flow of gold production news from China, or perhaps the gold trade remains concerned about the lack of forward progress in the global recovery effort. The bear camp will probably point out, that April gold comes into the early action today, sitting just above last week's low of $1,074.40 and also below the 100 day moving average, which sits up at $1,088.70. The bull camp on the other hand, might attempt to play up the fact that April gold has managed to build a bit of consolidation pattern above last week's lows. The January 26th Commitment of Traders with Options report for Gold showed the Non-commercial position to be net long 222,930 contracts, with the Non-reportable position net long 38,825 contracts, and that made the 'combined' spec and fund position net long 261,755 contracts as of early last week.
Silver:
Like the gold market, the silver market continues to rehash last week's news of an 11% increase in November Mexican silver output. However, the silver trade hasn't been that interested in physical supply side developments lately, with the ebb and flow of the Dollar and investment demand seemingly the dominating market forces. Therefore, the silver bulls probably can't expect to get much in the way of support from a recent minor pattern of declines in daily silver exchange warehouse stocks. It is possible that favorable US equity market action and initial strength in platinum and copper prices this morning are capable of lending some spillover support to silver prices in the early action today. In fact, silver has recently paid more attention to physical or industrial market factors, than it has to financial or flight to quality issues. The January 26th Commitment of Traders with Options report for Silver showed the Non-commercial position to be net long 36,897 contracts, with the Non-reportable position also net long 19,450 contracts, and that made the 'combined' spec and fund position net long 56,347 contracts as of early last week. Some traders might suggest that the silver positioning figures this morning, overstate the magnitude of the net long positioning, as May silver prices into the opening this morning, were roughly 63 cents an ounce below the level where the COT report was measured last week.
Crude Oil:
March crude oil has bounced a bit in the early overnight trade with price support coming from outside market influences, technical signals and perhaps expectations that today's economic reports may improve the outlook for fuel demand. March crude oil has certainly become oversold following a $12 break from the January high and with daily indicators falling to an oversold extreme, the market looks to have some technical short covering capacity. Price support for crude oil overnight looks to be tied to gains in the US equity market on expectations that today's report will show an expansion in manufacturing and oil may gain some upside traction if the economic news can improve sentiment toward oil demand. Construction spending and personal income will provide further economic insight. But given crude oil's bearish reaction to last week's GDP report, price gains in oil off the economic news may end up being short lived unless gains in equities can over ride the potential for the Dollar to rally off stronger economic news. A fire at a Kuwait storage tank and reports of a militant attack that shut three oil flow stations in Nigeria may also be underpinning oil in the early going. March crude oil acts as if it found some temporary chart support near the December low around $72.45. But while the market is becoming overdue for a recovery bounce there still seems to be a variety of fundamental concerns that could keep the $75.00 price level as a stiff overhead ceiling. A strong reading for China's PMI showing expansion in the manufacturing sector could easily escalate concerns that the government will need to take more aggressive monetary tightening steps that could dampen China's oil demand this year. We also suspect a rally attempt in the oil market will end up being short lived since oil demand outside of China clearly remains weak with last week's US inventory report showing product demand down 2%, Japan's oil imports in December down 2.6% and South Korea's oil purchases last month falling 20% due to low refinery operations. On the supply side, a report showing OPEC compliance to quotas fell to 55% last month with production at a 13 month high leaves the fundamental setup for oil clearly favoring the bear camp. The harsh US political regulatory climate has also reduced investor's risk appetite clearly being reflected in the January 26th COT report with options for crude oil which showed the combined fund and spec net long position being reduced by 32,433 contracts as of early last week. However, since the combined spec position in crude oil was still 194,146 contracts net long as of early last week, we suspect rally attempts in crude oil will attract additional speculative selling given the variety of negative factors favoring the bear case right now. Therefore, we see limited upside potential for March crude oil since it's clear gains in the broader economy have yet to impact oil demand. We still favor the short side, but on a purely technical basis some limited short covering in March crude oil may be seen early this week. Overhead resistance comes in at $73.78, the 200 day moving average and then near $74.82, last Friday's high.
Natural Gas:
March natural gas has bounced in the overnight trade with price support coming from a cooler temperature outlook for the next two weeks that could raise heating demand. Natural gas has recovered a bit from last week's sell off tied to a smaller than expected decline in storage. The market remains worried that without winter heating demand, natural gas supplies could quickly rebuild again since industrial fuel demand still appears to be weak and since the number of working gas rigs in operation continues to climb, up 28 last week to 861. But price support for March natural gas in the $5.11 to $5.00 price range may hold for now since some private weather forecasters are predicting cooler temperatures in the US heating region from last week's reading and expectations for higher heating demand should provide a price cushion. Also, expectations for the ISM Index today to show US manufacturing expanded last month may also provide some additional price support to natural gas if it can improve sentiment regarding a recovery in industrial fuel demand. Last week, a report showed 4th quarter US GDP grew at the fastest pace in more than six years and if more positive news on the economy can be seen this week, we suspect a rally in March natural gas back towards $5.50 may be possible, especially if the cooler temperature outlook holds. The January 26th COT report with options for natural gas showed funds reducing their net short position by nearly 5,000 contracts suggesting the selling bias from this group of traders may be ebbing a bit and that could also give natural gas some capacity to trade higher. Close in support for March natural gas comes in at $5.175 then near $5.114 with resistance near $5.327 then near $5.46.
The stock market remains in a liquidation watch this morning despite the initial gains on the charts. While the US stock market might be slightly undermined by the talk of US deficits, in the wake of the Obama deficit news, the real impetus of the market could still be derived from the scheduled US data flows. With the Personal Income and Spending readings due out early today and those readings only expected to show minimal gains, it would not seem like the Bull camp will have the information today to totally shift the trend back up. In fact, unless the flow of scheduled data from the US is definitively better than expectations, it could be difficult to throw off the down trend that has developed since the middle of January. While it is possible that the promise of a focus on jobs will drag the stock market out of its bearish track, the market didn't seem to be inclined to embrace that angle in the aftermath of the State of the Union address. Therefore, to shift away from the bearish tilt, probably requires a 'noted' improved in a series of US data points.
Dow:
The March Mini Dow looks to start the session out today with some measure of chart support seen at the even number of 10,000. However, with a pattern of lower highs seen in the March Mini Dow recently, we suspect that the ultimate low for the current move has yet to be seen. While the January 26th Commitment of Traders with Options report for the Dow Jones $5 Index showed a net spec long of roughly 20,000 contracts, that positioning is probably a little overstated because of the slide in prices that was seen after the report was compiled. Therefore, one probably can't rule out addition long liquidation pressure in the face of any fresh selling action early this week.
Momentum studies are declining, but have fallen to oversold levels. The close below the 9-day moving average is a negative short-term indicator for trend. It is a slightly negative indicator that the close was under the swing pivot. The next downside target is now at 9869. Some caution in pressing the downside is warranted with the RSI under 30. The next area of resistance is around 10139 and 10264, while 1st support hits today at 9941 and below there at 9869.
S&P:
While the S&P has managed to avoid a fresh new low for the move overnight, a pattern of lower highs has remained in place and that would seem to leave little in the way of support until the 1050 level. While the January 26th Commitment of Traders with Options report for S&P 500 Stock Index showed the Non-commercial position to be net short 19,745 contracts, with the Non-reportable position net long 48,350 contracts, and that made the 'combined' spec and fund position net long 28,605 contracts as of early last week but that positioning is probably understated due to the losses seen in the market since that report was compiled. The 100 day moving average in the S&P is seen up at 1084.90 today and it might take a close above that level to throw off the bearish tilt in the marketplace.
Momentum studies are declining, but have fallen to oversold levels. The market's short-term trend is negative as the close remains below the 9-day moving average. The market tilt is slightly negative with the close under the pivot. The next downside target is now at 1047.82. With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance is around 1082.62 and 1101.31, while 1st support hits today at 1055.88 and below there at 1047.82.
NASDAQ:
With a pattern of lower highs on the charts, the path of least resistance in the Nasdaq looks to remain down at the start of the new trading week. In fact, with the January 26th Commitment of Traders with Options report for Nasdaq Mini showing the Non-commercial position to be net long 30,939 contracts, with the Non-reportable position net long 8,599 contracts, that made the 'combined' spec and fund position net long 39,538 contracts as of early last week. Therefore, the Nasdaq probably remains vulnerable to additional long liquidation pressure. With a number of favorable tech sector earnings reports failing to shift sentiment back in favor of the bull camp, it could take moderately lower price action or a string of improved US data points to alter the bear trend.
US Dollar:
With the Dollar managing another new high for the move early today it would seem like the upward bias in the Dollar remained in place over the weekend. However, with the Non-reportable Net Long position in US Dollar hitting a new record level at 4,369 contracts in the January 26th Commitment of Traders with Options report, and the 'combined' spec and fund position net long 41,795 contracts as of early last week, one could suggest that the Dollar is becoming overbought technically. Apparently talk of a $1.56 trillion US deficit for 2010 wasn't a negative for the US Dollar this morning and that would seem to suggest that the Dollar trade is focused on other issues. Perhaps the trade continues to focus on the prospects of flight to quality flow toward the Dollar, as the trade saw comments from the ECB overnight that Greece would not be given any special treatment with respect to their budget constraints. It also seems as if the currency trade continues to give the Dollar the benefit of the doubt on its ability to drag its economy out of the doldrums, but that view could be challenged later in the week if the US payroll report shows anything disappointing. At least in the near term, the bull camp looks to retain a slight edge, with the March Dollar Index seemingly on a track to reach 80.00.
Gold:
Despite some positive annual price projections from a key brokerage firm, April gold has started the new week out on a slightly soft footing. With mostly favorable economic news overnight and initially favorable US equity price action, one might have expected gold to show some gains, but apparently the gold trade remains concerned about residual Dollar strength. Perhaps the gold market remains limited from last week's flow of gold production news from China, or perhaps the gold trade remains concerned about the lack of forward progress in the global recovery effort. The bear camp will probably point out, that April gold comes into the early action today, sitting just above last week's low of $1,074.40 and also below the 100 day moving average, which sits up at $1,088.70. The bull camp on the other hand, might attempt to play up the fact that April gold has managed to build a bit of consolidation pattern above last week's lows. The January 26th Commitment of Traders with Options report for Gold showed the Non-commercial position to be net long 222,930 contracts, with the Non-reportable position net long 38,825 contracts, and that made the 'combined' spec and fund position net long 261,755 contracts as of early last week.
Silver:
Like the gold market, the silver market continues to rehash last week's news of an 11% increase in November Mexican silver output. However, the silver trade hasn't been that interested in physical supply side developments lately, with the ebb and flow of the Dollar and investment demand seemingly the dominating market forces. Therefore, the silver bulls probably can't expect to get much in the way of support from a recent minor pattern of declines in daily silver exchange warehouse stocks. It is possible that favorable US equity market action and initial strength in platinum and copper prices this morning are capable of lending some spillover support to silver prices in the early action today. In fact, silver has recently paid more attention to physical or industrial market factors, than it has to financial or flight to quality issues. The January 26th Commitment of Traders with Options report for Silver showed the Non-commercial position to be net long 36,897 contracts, with the Non-reportable position also net long 19,450 contracts, and that made the 'combined' spec and fund position net long 56,347 contracts as of early last week. Some traders might suggest that the silver positioning figures this morning, overstate the magnitude of the net long positioning, as May silver prices into the opening this morning, were roughly 63 cents an ounce below the level where the COT report was measured last week.
Crude Oil:
March crude oil has bounced a bit in the early overnight trade with price support coming from outside market influences, technical signals and perhaps expectations that today's economic reports may improve the outlook for fuel demand. March crude oil has certainly become oversold following a $12 break from the January high and with daily indicators falling to an oversold extreme, the market looks to have some technical short covering capacity. Price support for crude oil overnight looks to be tied to gains in the US equity market on expectations that today's report will show an expansion in manufacturing and oil may gain some upside traction if the economic news can improve sentiment toward oil demand. Construction spending and personal income will provide further economic insight. But given crude oil's bearish reaction to last week's GDP report, price gains in oil off the economic news may end up being short lived unless gains in equities can over ride the potential for the Dollar to rally off stronger economic news. A fire at a Kuwait storage tank and reports of a militant attack that shut three oil flow stations in Nigeria may also be underpinning oil in the early going. March crude oil acts as if it found some temporary chart support near the December low around $72.45. But while the market is becoming overdue for a recovery bounce there still seems to be a variety of fundamental concerns that could keep the $75.00 price level as a stiff overhead ceiling. A strong reading for China's PMI showing expansion in the manufacturing sector could easily escalate concerns that the government will need to take more aggressive monetary tightening steps that could dampen China's oil demand this year. We also suspect a rally attempt in the oil market will end up being short lived since oil demand outside of China clearly remains weak with last week's US inventory report showing product demand down 2%, Japan's oil imports in December down 2.6% and South Korea's oil purchases last month falling 20% due to low refinery operations. On the supply side, a report showing OPEC compliance to quotas fell to 55% last month with production at a 13 month high leaves the fundamental setup for oil clearly favoring the bear camp. The harsh US political regulatory climate has also reduced investor's risk appetite clearly being reflected in the January 26th COT report with options for crude oil which showed the combined fund and spec net long position being reduced by 32,433 contracts as of early last week. However, since the combined spec position in crude oil was still 194,146 contracts net long as of early last week, we suspect rally attempts in crude oil will attract additional speculative selling given the variety of negative factors favoring the bear case right now. Therefore, we see limited upside potential for March crude oil since it's clear gains in the broader economy have yet to impact oil demand. We still favor the short side, but on a purely technical basis some limited short covering in March crude oil may be seen early this week. Overhead resistance comes in at $73.78, the 200 day moving average and then near $74.82, last Friday's high.
Natural Gas:
March natural gas has bounced in the overnight trade with price support coming from a cooler temperature outlook for the next two weeks that could raise heating demand. Natural gas has recovered a bit from last week's sell off tied to a smaller than expected decline in storage. The market remains worried that without winter heating demand, natural gas supplies could quickly rebuild again since industrial fuel demand still appears to be weak and since the number of working gas rigs in operation continues to climb, up 28 last week to 861. But price support for March natural gas in the $5.11 to $5.00 price range may hold for now since some private weather forecasters are predicting cooler temperatures in the US heating region from last week's reading and expectations for higher heating demand should provide a price cushion. Also, expectations for the ISM Index today to show US manufacturing expanded last month may also provide some additional price support to natural gas if it can improve sentiment regarding a recovery in industrial fuel demand. Last week, a report showed 4th quarter US GDP grew at the fastest pace in more than six years and if more positive news on the economy can be seen this week, we suspect a rally in March natural gas back towards $5.50 may be possible, especially if the cooler temperature outlook holds. The January 26th COT report with options for natural gas showed funds reducing their net short position by nearly 5,000 contracts suggesting the selling bias from this group of traders may be ebbing a bit and that could also give natural gas some capacity to trade higher. Close in support for March natural gas comes in at $5.175 then near $5.114 with resistance near $5.327 then near $5.46.
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