January 31st, 2010 Posted in Uncategorized
Welcome Back Traders
As I mentioned on my January 24th post, "When good news is bad news, it's time to examine portfolios. It is my opinion that equities have begun a correction." That opinion has turned to fact. Peak to trough, ES H10 and TF H10 have corrected 6.2% and 7.5% since making their respective highs in early January.
I don't recommend trying to be a hero and picking a bottom. Equities are still correcting and not showing any signs of reversing. The big positive for equities is that approximately 3/4 of the companies in the S&P 500 are reporting better than expected earnings, excluding beaten down financials.Top line numbers have been flat to modestly positive in most cases. This is only good news for when things turn around and the Big Players start putting all that "sideline" money to work. I'll do my best to recognize the reversal in equities when it happens and report it to you right here! In the meantime, the trend is down. Shorting weak morning rallies is the preferred trading strategy.
That being said, a look at the numbers below reveal a commonality. To simplify things, I'll focus on ES H10 and TF H10. The critical levels for ES H10 and TF H10 will be their respective S1's of 1076.45 and 603.83. Both levels also happen to represent Monday's approximate Pivot levels of 1076.17 and 604.17. As long as we trade under these levels, ES H1o and TF H10 will remain bearish.
Energies
As I write this, QM H10 is off slightly trading at 72.55. QG H10 is up trading at 5.265. Both markets have gotten beaten up from recent highs. QM H10 is off 14.2% and QG H10 is off 16.6%. Crude is off on dollar strength and concerns over the global recovery story. High inventories and warmer weather is contributing to the weakness in nat gas. Both markets are trading above their respective S2's.
Trade Idea
For those of you trading QG H10, this market may be trying to form a base and reverse its bearish trend. I'm not saying buy this market. But if it can hold the 5.10 level, it could begin forming a base between the 5.10 and 5.30 range. If it breaks down, it should find support within the 4.85 to 5.00 range.
Monday's and Weekly Trading Levels
If you have any questions or comments regarding my ideas or numbers, please feel free to contact me via email at ruria@manducatrading.com or toll free at 866.312.4965.
Happy Trading! - Rob
| Daily Pivots | 2/1/10 | ||||
| EQUITIES | R2 | R1 | PIVOT | S1 | S2 |
| ES H10 | 1102.92 | 1085.83 | 1076.17 | 1059.08 | 1049.42 |
| YM H10 | 10264.33 | 10138.67 | 10066.33 | 9940.67 | 9868.33 |
| NQ H10 | 1809.42 | 1774.08 | 1752.92 | 1717.58 | 1696.42 |
| TF H10 | 621.37 | 610.23 | 604.17 | 593.03 | 586.97 |
| ENERGIES | R2 | R1 | PIVOT | S1 | S2 |
| QM H10 | 75.54 | 74.21 | 73.32 | 71.98 | 71.09 |
| QG H10 | 5.35 | 5.25 | 5.17 | 5.07 | 4.99 |
| Weekly Pivots | |||||
| Starting | 2/1/10 | ||||
| S & P 500 | R2 | R1 | PIVOT | S1 | S2 |
| ES H10 | 1105.35 | 1094.90 | 1086.90 | 1076.45 | 1068.45 |
| SPX | 1108.19 | 1098.58 | 1090.96 | 1081.35 | 1073.73 |
| SPY | 111.01 | 109.99 | 109.19 | 108.17 | 107.37 |
| OEX | 510.40 | 505.95 | 502.45 | 498.00 | 494.50 |
| DOW JONES | R2 | R1 | PIVOT | S1 | S2 |
| YM H10 | 10280.27 | 10194.53 | 10125.67 | 10039.93 | 9971.07 |
| DJIA | 10328.21 | 10245.61 | 10176.15 | 10093.56 | 10024.09 |
| DIA | 103.20 | 102.38 | 101.74 | 100.92 | 100.28 |
| NASDAQ 100 | R2 | R1 | PIVOT | S1 | S2 |
| NQ H10 | 1825.97 | 1804.23 | 1788.22 | 1766.48 | 1750.47 |
| NDX | 1828.55 | 1808.03 | 1791.31 | 1770.78 | 1754.06 |
| QQQQ | 44.97 | 44.45 | 44.04 | 43.52 | 43.11 |
| RUSSELL 2K | R2 | R1 | PIVOT | S1 | S2 |
| TF H10 | 623.73 | 616.69 | 610.87 | 603.83 | 598.01 |
| RUT | 624.66 | 618.18 | 612.87 | 606.40 | 601.09 |
| IWM | 62.55 | 61.86 | 61.27 | 60.57 | 59.98 |
| CRUDE OIL | R2 | R1 | PIVOT | S1 | S2 |
| QM H10 | 75.76 | 74.89 | 74.04 | 73.17 | 72.31 |
| USO | 37.06 | 36.66 | 36.28 | 35.88 | 35.50 |
| NAT GAS | R2 | R1 | PIVOT | S1 | S2 |
| QG H10 | 5.52 | 5.42 | 5.34 | 5.24 | 5.17 |
| UNG | 9.96 | 9.81 | 9.69 | 9.53 | 9.41 |