Archive for the ‘Emini Trading’ Category

The NASDAQ didn’t exactly explode higher Thursday but they did show enough follow thru to prove that they hadn’t become exhausted on Wednesday.  That doesn’t mean they can’t turn down from here though.  As with all the financial markets the big key for Friday will be the monthly employment report.  Most expect the report to be positive, but the ADP report from Wednesday might have built expectations so high that it could be positive and still disappointing.  It creates a very dicey situation where having any expectation is probably unwise.  Resistance should begin right around 2280 while support is best near 2260, but no real damage would be done unless they break below 2245.  All of those things are possible Friday, and it is also possible for the employment report to be a complete non-event.  I think that is unlikely, though.

The NASDAQ got above 2260 and closed up there Wednesday, so there isn’t much to argue with there.  The only caution is that closing so close to the high like they did can often indicate at least momentary exhaustion so it may be difficult for them to even reach resistance near 2283 Thursday.  If they do reach 2283 and especially if they exceed it they could be in the early stages of a spectacular blow off.  They could possibly hold support as high as 2266 but really still look fairly bullish unless they break below 2250.  It seems fairly likely that they would just consolidate Thursday so they can be prepared to be surprised when Friday’s employment report also shows the shocking fact that more people got hired over the holidays.  Ooohhhh … but what if it doesn’t?

The NASDAQ had an inside day Tuesday, but moving from 2262 to 2236 hardly qualifies as a small range day.  Going above 2260 again would probably be a positive sign but I don’t think we can really treat it as a pure breakout.  Taking out 2236 on the downside provides a similar situation …. It is probably negative but not necessarily a true breakdown.  It is true that Tuesday’s low essentially was a test of the highs from 2010, so if we have any bias at all I think it has to be bullish.  I’m still concerned that we could see some fairly major top this week, though.  Going higher next week would actually be more bullish than going higher Wednesday.  I think the resistance is more clearly defined in the S&P, which makes that market more interesting to me than this one.

The NASDAQ also opened at new highs Monday and used the 2010 high as support to leap higher.  The rally from 2238 to 2267 was impressive, but it was also over before noon and they spent the rest of the day slowly but steadily working back down to close near 2250.  You can’t argue with a market closing at new highs and that is exactly what they did, but closing below the midpoint of the range doesn’t suggest a market that is really anxious to blow out further to the upside.  Support could possibly work down as low as 2232 Tuesday but anything lower than that would start to look pretty ugly.  They could hold as high as 2243 for support .  Initial resistance should set up around 2265, but the potential is still there for them to explode higher if they take out 2267.  I think what they do this week should be an important indication for the next few weeks if not the entire year.

The NASDAQ had an actual day session range of only 8 points Wednesday, and while they did continue up and closed higher on the day, I think the 8 points is a pretty good indication that they aren’t worth worrying about.  I suspect the grind higher will continue but trading is so thin that they could suddenly move in either direction without any real reason.  Support and resistance run from 2230 to 2240, and I think it is pretty foolish to trade when only anticipating 10 points from one end of the day to the other.  I probably will not be commenting much for the next few days, possibly for the rest of the year.

The NASDAQ is sharing the S&P illusion of acting like they are trading in heavy mud.  They got up above 2232 and even closed up there Tuesday, but they only had a 12 point range during the day and may have lulled the vast majority of traders to sleep in the process.  This is not exactly the tone we normally see around significant breakouts.  They could possibly get going harder Wednesday due to GDP or existing home sales.  They should hold above 2230 if they intend to go higher and the next upside target is near 2242.  A break of 2222 would be an indication of much more weakness than we would expect to see after a good upside breakout and would suggest a much more serious retracement might be getting started.  At this point we have a confirmed breakout … We are just waiting for them to actually get going.  The time of year could mean we just remain sluggish.

The NASDAQ needed to go above 2230 or below 2190 to do anything significant Monday.  They tested 2225 early and then dumped all the way down to test 2205 in the first hour.  They turned and rallied back up to new highs in the middle of the day, but the high? … 2230 exactly.  No breakout here.  Rats!  They drifted back down to close near 2220 and left traders (or at least me) with a rather empty feeling.  That was a fair amount of price action to accomplish virtually nothing.  I guess we could just move the breakout point up to 2232 in an attempt avoid a marginal new high and leave the downside level at 2190, but I’m sure disappointed that they could entice more buyers when they were up at 2230 Monday.  They might hold support around 2216 Tuesday, but I really don’t think I care unless they have a serious breakout.  Pretty low volume on this holiday week.

The NASDAQ didn’t move above 2230 or below 2190 Friday.  In fact, they did virtually nothing and created the smallest range we have seen in 9 days.  This is not exactly what you would expect from a triple-witching Friday.  We really have the same situation here that exists in the S&P.  The week before Christmas is traditionally NOT a great week for a major move to take place, but the price pattern suggests that they are primed for an explosive breakout.  Being primed for it doesn’t mean it will occur, but going above 2230 could really send them on a rocket higher and taking out 2190 could really cause the bottom to fall out.  This is really the same situation they were in Friday expect that they now appear even more tightly bound up.  False breakouts are still very possible but the potential in either direction is great enough that it is probably worth going with them if they move out Monday.

The NASDAQ took another quick trip below 2200 early Thursday but rocketed up out of there pretty good.  They almost got to 2225 before the day was over … but is that bullish because they rallied so far or bearish because they couldn’t go to new highs?  My guess is that it is bullish because the retracement to the uptrend has been amazingly small, but you could also conclude that there really has been no retracement and the market has been nothing but sideways since last Friday.  If that is the case then a move above 2230 or below 2190 could generate a ton of follow thru.  The high in 2007 wasn’t terribly far above 2250, so since that is so close I think particularly a move higher could be a real rocket.  I would sure want to be short if they break 2190 though.

The NASDAQ stayed below 2225 Wednesday and then broke down below 2200 but bounced from there instead of continuing.  They did wind up with an outside day and a down close, which is often a pattern than snaps back up the next day.  When they don’t snap back however they can lead considerably lower.  We still have support near 2190 that could hold them Thursday with the next level just below 2170.  I think seeing the larger break would be more interesting, but “more interesting” doesn’t necessarily translate into “more likely”.  They probably shouldn’t get far above 2210 if they are continuing lower Thursday and if they even test Wednesday’s high they will probably continue to 2230.  They have survived a slew of economic reports this week but Thursday will still have weekly employment claims as well as housing starts and building permits.