DX U10 is down 0.246 to $83.085. Yesterday's rally started around 10 CST when DX U10 came off resistance area near $83.50. This market would have to trade below $82.50 for it to break its current uptrend. When that happens, you can expect a sustained rally in equities.

Given the aforementioned scenario of the Dollar Index and the fact that equity index futures are still trading short term bearish, I'll be looking for an entry point to sell ES U10 and TF U10.

I expect to see ES U10 rally up to 1063/64. Ideally this market trades up to 1066/67. If this happens I'll be looking to place a SELL STOP .

For TF U10, I expect it to rally to about 609/611 range. Ideally this market rallies to the 612/613 range.

If you have questions or care to discuss today's strategy in great detail, please contact me via email at ruria@manduatrading.com or toll free at 866.312.4965 - Rob.

Trading Levels

Durable Goods came in at a disappointing +0.3%. Ex Transports it declined 3.8%. June was revised to -0.1% from -1.0%. Not good.

Really all the news we're getting is bad. But I can't say that's a surprise. What's funny is that a year ago, things were just as bad but the numbers sounded great due to government stimulus. So what's the difference now? Reality setting in?

There has to be a time where people start to realize this negativity is killing any chance of recovery. Pessimism and depression is contagious. I suspect the negative sentiment will end after the election. Why? Because these jerk politicians will stop using fear and negativity via all media outlets to get elected ... at least until 2012.

So folks, let's try to be more positive. Collectively we will get through this mess quicker.

If you have questions or comments and would like to discuss today's strategy in more detail, please contact me via email at ruria@manducatrading.com or toll  free at 866.312.4965 - Rob.

Trading Levels

It seems that the Fed is admitting it has no clue as to how to get us out of the mess they put us into with their monetary policies over the last 15 years. Shocker! They had the chance to avoid this mess in 2004 before the presidential elections by raising rates to quell the growing real estate bubble.

Despite urging from the same Fed governors opposing Helicopter Ben now, the Fed, with the encouragement of up-for-re-election politicians, did not raise rates. The result - more fraudulent loans, artificially inflated home prices due to housing speculation and plenty of people holding the proverbial real estate bag.

If you bought a home in late 2004 to 2008, I'm sorry. Odds are you're underwater and possibly in trouble. The Fed and your elected officials let you down. And now the same folks have no clue as to how to fix the unfix-able.

The Good News ...

Pivot for Profits takes things one day at time. Trading the bigger picture, one day at a time. Unfortunately these markets aren't for the "buy and hold" investor. But for short term traders, these markets provide ample opportunity.

Aside from the nervousness being reported about the operations of the Federal Reserve, concerns over Europe are arising again which is wreaking havoc in the currency markets. What's the Dollar Index doing?

Good question. DX U10 is up $0.212 to 83.445. Due to its inverse relationship, equities and dollar based commodities are getting hit this morning.

Today's Trading Strategy

It's my opinion, this morning's sell off is a joke. Stocks are cheap however as I said it before they can get cheaper. However, I expect a modest rebound given where ES U10 and TF U10 are trading now - 1053.25 and 592.10 respectively.

Market condition is short term negative. However I think ES U10 can trade up to 1059/1060 range to set up a short at those levels. TF U10 can trade up to 595/596 range to set up a sell in that market.

If you have questions or care to discuss this strategy in complete detail, please contact me via email at ruria@manducatrading.com or toll free at 866.312.4965. - Rob

Today's Trading Levels

Trading Levels

This morning we got the government's report on PPI. It rose 0.2% as expected. Core PPI was up 0.3% from last month also as expected.

POT is getting a hostile bid from BHP. This could be lending a bid to equities this morning.

Also lending a bid to equities as well as energies is a lower Dollar Index. As I write this, DX U10 is trading $82.270, -$0.370. This is a modest pullback but helping things out nonetheless.

Today's Strategy

Regarding ES U10 - There is heavy resistance for this market at 1088.00. Using the same counter trend trading strategy that we've been using, I'll be looking to place a Sell Stop around 1083.00 (today's R1) or 1084.25 (weekly S2). Buy Stop will be at 1088.00. Remember this is a intraday trade so be nibble in case equities run higher.

Today's Trading Levels

Trading Levels

Equity index futures are getting hit this morning. ES U10 is down 17.00 to 1102.50. TF U10 is down 13.00 to 632.30. CNBC is saying this has to do with Europe's and Asia's reaction to the Fed statement that our economy continues to be weak. That may be so but why did equities rally following yesterday's FOMC announcement if the announcement was so bad?

It's my contention that they're wrong, as usual. Yesterday, DX U10 was up most of the morning and into the Fed announcement. Equity index futures for the most part were trading lower into the announcement. Once the report was made, DX U10 erased all its gains and stocks rallied.

This morning, DX U10 is up 0.85 to $81.785. That's a big move that threatens to break the current downtrend in this market. In my opinion, this market becomes a buy at $82.01. However, the fact that it's trading higher this morning is putting a damper on equities and most commodities not that the CNBC rabble.

About a month ago, I felt that equities would start to fall once the Dollar found a base and began to trade higher. Unfortunately it looks like this is starting to happen. Tomorrow's action in DX U10 will confirm this theory.

Trading Levels

Monday I pointed out that ES U10 had breached its Weekly Pivot of 1118.97 yet closed above it. Yesterday it happened again however this time closing at 1119.50. To me it's obvious that ES U10 is weak. TF U10 lagging behind has been the key indicator and confirmation of this fact.

That being said, this morning weakness presents an opportunity. The pressure to the downside seems too great to fight. What I'll be looking for is a rally in ES U10 to the 1108/1107.50 levels. If this happens, ES U10 can be sold at 1107.00 on a Stop. TF U10 will be attractive to sell anywhere above 634.00.

QM U10 has breached its Daily S1 of $79.38. This market will continue to fall into the $77.50 range as long as the strength in DX U10 continues.

QG U10 is trading bearish but oversold in my opinion. Today's Pivot is 4.32. QG U10 is trading $4.29. I would not try buying this market just yet however a close over 4.32 will help this market find a near term base.

Today's Trading Levels

Yesterday I was looking for ES U10 and TF U10 to trade to their Weekly R1's (1126.13 and 661.59) before selling both markets. Well both were unable to reach those levels before falling down and through their respective Weekly Pivots of 1118.97 and 655.91. For those following along, that was the first time since this rally began that we've done that.

Although ES U10 and TF U10 rallied off their Pivots to close higher, the fact that it tested and breached their Pivots was significant as evident by this morning's early sell off.

As I write this, equity index futures are trading lower. ES U10 is down 10.75 to 1115.00 while TF U10 is down 7.60 to 651.00. These are significant levels. Weekly Support 1(WS1) for ES U10 is 1114.43 while WS1 for TF U10 is 650.69.

Remember, Weekly S1 level is very important. If a market breaks its WS1, that market will break support and continue going lower. A close below these levels will confirm the H&S formation see on both these indexes.

However, using the same counter trend strategy that we employ at P4P, this morning's weakness and early settlement near Weekly Supports gives us an intraday buying opportunity at these same levels.

Keep in mind, that later today at approximately 1:15 CST, the FED will make its announcement on interest rates and the state of the economy. Maybe the news has been leaked but I believe this morning's weakness is more a result of a strong dollar.

DX U10 is up 0.600 to $81.39. This is causing a sell off not only in equities but in most commodities. QM U10 is down nearly $2.00 to $79.75. It looks like the strength in Crude has come to a short term end. QG U10 is also down. Currently trading at 4.35, +$0.04. $4.36 is today's Pivot for Nat Gas. This is already trading bearish however may find some support at these levels because it looks to be oversold in my opinion.

Again if you have questions please contact me.

Today's Trading Levels

The Dog Days of summer are upon us and the next few days will be no exception as we await the Fed's announcement on the economy and interest rates tomorrow at 1:15 CST following. Expect trading volume to be even more muted until then.

Trading Levels

We'll also get a peak at inflation with Tuesday's report on Productivity and Cost (due 7:30 CST) and Friday's CPI (due 7:30 CST).

ES U10 and TF U10 are trading at critical levels in my opinion. It's my contention that TF U10 leads the stock market because it represents growth. When indexes like this one and the S&P Small Cap are trading in a bullish trend, it usually means that the economy is healthy. However, TF U10 is lagging ES U10.

The fact that this lag is occurring at critical resistance levels, 1130.00 for ES U10 and 665/670 for TF U10, concerns me. The question here is: What catalyst will cause ES U10 to trade and close over 1130.00? The positives, good earnings and low rates, are evident. But so are the negatives.

That being said, ES U10 is set to open the week below its R1 of 1126.13 and TF U10 should open below its Weekly Pivot 655.91. The lag relationship is still in tact. I expect both indexes to trade above these respective trading levels. If this happens, I'll use this opportunity to Sell.

Again if you have questions please contact me.

Daily and Weekly Trading Levels

Wow has this week/month flown by! It's hard to believe that today is already the last day of July. But truth be told, it was a great month for equity index futures. ES U10 and TF U10 are up approximately 5% for the month, assuming we don't have a major sell off today.

That being said, earlier this week I mentioned that I felt a modest sell-off in equities was going to start, specifically I said it would start on Tuesday. It did and we're still seeing modest selling pressure this morning. However, I don't think this is the start for a move to test recent lows for either of these markets. Many factors can debunk this claim however all in all, I think this modest sell off is nothing more than profit taking and technical selling.

As I write this, TF U10 and ES U10 are trading slightly above or at their respective S1's - 637.50 and 1086.00. What's interesting is that both are also trading at or slightly above/below their Weekly R1's of 633.11 and 1088.60 respectively. Equity index futures are looking for direction following this morning's fairly disappointing GDP number that came in at 2.4% vs 2.6%.

Using the same counter-trend trading method that we use here at P4P, my bias is to the upside this morning. Buy points at 1088.75 on ES U10 and 641.00 for TF U10.

If you have questions or would care to discuss trading strategy, feel free to contact me via email at ruria@manducatrading.com or toll free at 866.312.4965 - Rob.

Happy Trading and Have a Great Weekend!

Today's Trading Levels