Recap and Today’s Trading Levels

May 18th, 2010 Posted in Uncategorized

Good morning

So what to make of yesterday's reversal in the stock market?

Yesterday morning I stated that we're in a correction and that selling any rally would be a prudent trade idea. Equity markets opened higher (the rally) and then fell sharply after the Empire survey came out lower than expect at 19.11. ES M10 traded down as low as 1112.75 after making an intraday high of 1140.25. TF M10 traded down to 676.00 after posting an early morning high of 704.40.

However, intraday prices do not matter. Closing prices are what's important and following an early morning plunge, equity index futures staged an impressive rally into the close as the Euro and the DAX stabilized.

Based on yesterday's action, it's safe to assume we'll have an up morning. As I write this ES M10 and TF M10 are trading higher at and 1144.25 and 704.00 respectively, despite a terrible Housing Starts report. I think WMT is the main catalyst here, again despite terrible forecasts. But as I stated yesterday, we're still in a correction and I'll still be looking to sell rallies until the correction is over.

Energies

I think there are great risk/reward trades in QM N10 and QG N10. If you can't pick up QM N10 near $72.00, I think you can place a Buy Stop at 76.00 for an entry. For QG N10, you can place a Buy Stop at 4.60.

If you have questions or comments I ask that you contact me directly via email at ruria@manducatrading.com or toll free at 866.312.4965.

Happy Trading - Rob

Daily Pivots	5/18/10
EQUITIES	R2	R1	PIVOT	S1	S2
ES M10	1156.75	1145.75	1129.25	1118.25	1101.75
YM M10	10815.33	10711.67	10610.33	10506.67	10405.33
NQ M10	1949.92	1931.33	1900.92	1882.33	1851.92
TF M10	720.17	707.53	691.77	679.13	663.37
ENERGIES	R2	R1	PIVOT	S1	S2
QM N10	76.05	74.63	73.70	72.28	71.35
QG M10	4.49	4.44	4.36	4.31	4.23