Trading Levels for the Week Starting June 21st

Good Morning

Welcome to the first day of Summer! So far financial markets are off to a great start as overnight China decided to allow the Yuan to trade more "flexibly" against other major currencies, particularly the Dollar. If this happens, and it's still a big "IF", then this would certainly help American companies, producer and exporters, who have been lobbying for this for a long time.

Equities

On Friday June 11th, I posted an early warning to short sellers "to be careful and to be ready to cover". That warning was confirmed with the following Monday and Tuesday trade.

However if you didn't heed my warning and listened to all those newsletters and the smart guys on CNBC, who all last week told you the up move wasn't valid b/c of "light volume", then you're probably scrambling for answers with this overnight surprise.

Trade Idea

As I write this, all index futures are trading well above my levels posted below. Using those for a road map may be difficult if we continue to rally and we'll have to take our lead from the Daily Trading Levels.

ES U10 is trading well past weekly and daily R2 levels. TF U10 is trading near its R2 of 673.57 (daily) and 673.47 (weekly).  For both I have a 3rd Resistance level that aggressive traders can look to sell. For ES U10 the level is 1124.50 and 679.00 for TF U10. *** If you choose to use these Extreme Level Trades, I urge you to use tight stops. This move is real and should continue by day's end. *** However I remind you of the Tuesday Tank. If you don't know or remember what that is, I'll discuss it tomorrow.

If you have any questions or comments please contact me via email at ruria@manducatrading.com or toll free at 866.312.4965.

Happy Trading - Rob

Trading Levels

This Morning’s Trade Idea Recap

This morning I stated that I'd be using the "same counter-trend trading method that I've been employing ... and for TF U10 and ES U10, I'll be looking to sell the weekly R1 levels for these indexes, approximately  1091.25 and 651.00 respectively."

Fortunately, the aforementioned levels missed triggering this morning by 0.25 of a point at the opening before rallying intraday. However if you're following my numbers and this blog you should have been looking to short the next Resistance level. For ES U10 and TF U10 those levels were 1098.17 and 658.03 (see this morning's daily pivots). These levels were reached and surpassed however they were also great levels to sell on the way down as ES U10 and TF M10 considering they closed 1086.00 and 650.00 respectively.

Anyway, hope you caught a nice trade.

If you have questions regarding my numbers or commentary, please feel free to contact me via email at ruria@manducatrading.com or toll free at 866.312.4965.

I'll be back with another idea in the morning. Tuesday's levels are listed below.

Tuesday's Trading Levels

Weekly Trading Levels and Commentary

Good Morning and Happy Flag Day!

Special note ... we'll be moving from the June to September contract for all equity index futures. September will be front month this week and probably the more actively traded starting today or tomorrow. Quadruple Witching is this Friday. Also, starting today, Crude Oil futures will go from July to August.

On Friday I wrote, "Despite this morning's weakness in index futures, I'd like to give an early warning to short sellers - be careful and be ready to cover. We've seen strength in equities the last couple of days. I expect this to continue in to next week's Quadruple Witching and through the end of the quarter, 6/30/2010."

As I write this, equity index futures are trading higher and following through on Friday's gains. ES U10 and TF U10 are trading 1094.25, +9.25 and 653.00, +8.20 respectively. The positive tone of many markets this morning can be attributed to weakness in the Dollar vs other currencies. As concerns over Europe ease, I feel we'll see equity and commodity markets posting gains in the coming months. But let's take it one day at a time.

Trade Ideas

Using the same counter-trend trading method that I've been employing, I see an opportunity to sell the open. There is definite strength in equity index futures this morning however I have to remind you that equities are still in a correction and it's still safe to sell short rallies. For TF U10 and ES U10, I'll be looking to sell the weekly R1 levels for these indexes, approximately  1091.25 and 651.00 respectively. (see levels below)

If you have questions or comments, feel free to contact me via email at ruria@manducatrading.com or call toll free at 866.312.4965.

Have a great day - Rob

Morning All

Congratulations Chicago Blackhawks, your 2010 Stanley Cup Champs!

Despite this morning's weakness in index futures, I'd like to give an early warning to short sellers - be careful and be ready to cover. We've seen strength in equities the last couple of days. I expect this to continue in to next week's Quadruple Witching and through the end of the quarter, 6/30/2010.

Below you'll find my trading levels for the day. If you have questions as to how I use them or today's Trade Strategy, feel free to contact me via email at ruria@manducatrading.com or toll free at 866.312.4965.

Trading Levels

Good Morning

Equity index futures are trading higher this morning despite continued worries abroad. The fear isn't new to us in that we've gone through this already. But the idea of a financial system collapse as a result of bad loans is weighting heavily on Europe and in turn weighting heavily on us.

However there are some positive signs of sustained employment and government efforts to trim government "fat" for Europe. This seems to be easing fears.

Domestically, for the second week in a row, same store sales rose 0.8% w/w and 0.3% y/y. Sounds great but still tame.

Trading Levels

As I write this, ES M10 is trading 1052.75 and TF M10 is trading 621.20. Both are up modestly relative to the swings we've been having. Today will be interesting day in that my signals have equities trading in severely oversold conditions, yet the trend and condition of equity markets is bearish.

On 5/25/10, ES M10 and TF M10 made intraday lows of 1036.75 and 615.60 respectively. Yesterday both these indexes closed above the 5/25 intraday low however they closed on their lows, typically a good sign selling will continue. If we trade down to and close under the aforementioned intraday lows, equity markets can get much uglier than they have been.

The positive is that ES M10 and TF M 10 are trading just under their respective daily Pivot listed below - 1055.08 and 624.43. Why positive? Well as I mentioned, we're oversold and much of the trading activity has been driven by technical analysis. If those same TA traders recognized my Pivots and we trade above 1056 and 625, we should close positive today. But again, take what the market gives you.

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

Happy Trading - Rob

Monday’s and Weekly Trading Levels for Week Starting June 7th

Welcome Back!

I hope you had a good weekend and didn't let the current market's volatility stress you out much.

Last I posted, I felt that we had made a short term bottom. More importantly I felt that we wouldn't test the "Flash Crash" lows until at least September. Unfortunately, Friday's action is going to test that claim.

We are still in a correction however I felt that we were turning the corner. I'm not so sure now and fear that equities may be in for a pounding. Fundamentally speaking, stocks are cheap. Technically, they can get cheaper as concerns over a global double dip recession continue.

Unless something positive starts on Monday and builds throughout the week, that claim may not only be tested but proven to be wrong. Trouble with trying to predict markets is that markets are unpredictable. They have no problem reminding you either.

That being said, when I try to forecast a market, I'll also be the first to admit when that forecast is wrong. Although we may rally Monday and the rest of the week to help my claim, I'm not going to challenge markets but rather will adapt to them as necessary.

Below you'll find my trading levels for Monday as well as those for the rest of the week starting June 7th. If you have questions regarding my commentary or the posted trading levels, please feel free to contact me via email at ruria@manducatrading.com or toll free at 866.312.4965.

I'll be back in the morning with a trade idea for Monday.

Have a Great Week - Rob

Friday’s Trading Levels and Commentary

"It is my belief that (Tuesday's) initial drop had more to do with the unwinding of margin positions related to options expiration more than it had to do with what was going on in Europe. If I'm right, we should continue moving higher the rest of the week and perhaps into next week before concern over a global financial meltdown rears its ugly head again." (Pivot for Profits 5/26/10)

So far so good. I don't think we've broken this down trend yet however I do feel we've made a short term bottom in equities that probably won't be revisited until September.

That being said, thanks to yesterday's closing action, many indicators that I use have turned and are now giving an initial buy signal for all stock index futures. The signal takes time to develop but is very reliable when read correctly. But nothing is a guarantee so use proper risk management.

Trading Levels

These big swings and trading ranges have been wrecking havoc on my calculations. You'll notice that the spread between the various levels have widened dramatically making it a little more difficult to maneuver intraday.

However, that's why I produce two set of numbers - daily and weekly. Together they help clear up some of the uncertainty.

Ideally, I'd like to see a modest retreat in equities within the first hour of trading. For ES M10 I'll be hoping to see 1089/1088 level and for TF M10 I'll be looking for 664/663 range.

As I write this, both ES M10 and TF M10 are trading at their weekly Pivots - 1103.00 (P - 1103.67) and 669.00 (P - 669.01). Assuming we get the scenario I detailed above, a move back to current levels should generate enough optimism to push these markets through their Weekly Pivots to a higher close. But again, play what the market's give you, not what you want them to give you.

If you have questions or comments, feel free to contact me via email at ruria@manducatrading.com or toll free at 866.312.4965.

Happy Trading and Have a Great Memorial Day Weekend!

Thanks to all the veterans and Go Hawks!

"I don't publish my 3rd range of Support and Resistance. However for those interested in speculating on picking a bottom today, S3 for ES M10 is 1045.33. S3 for TF M10 is 620.73." (Pivot for Profits 5/25/10).

Aggressive traders who took shot and speculated to the long side using my Support 3 level should have had a monster day yesterday as equities erased virtually all of the early morning weakness.

As I mentioned, yesterday was a big day in that it would determine whether this severity of the current correction in equities. We held key support levels. This doesn't mean that the correction is over, however it is apparent that money managers are bottom feeding.

It is my belief that yesterday's initial drop had more to do with the unwinding of margin positions related to options expiration more than it had to do with what was going on in Europe. If I'm right, we should continue moving higher the rest of the week and perhaps into next week before concerns over a global financial meltdown rears its ugly head again.

If you have questions or comments regarding my numbers below, feel free to contact me via email at ruria@manducatrading.com or toll free at 866.312.4965.

Morning Commentary and Tuesday’s Trading Levels

Good Morning

Last I updated this post, I was a little upset because I found it incredible that CNBC and its personalities can say whatever they want and basically advise the investing public with zero liability. This morning's terrible reaction to problems in Europe is a perfect example why.

Basically when the world markets and economies are falling apart, they're on their televised soapbox encouraging you step in front of a "falling knife". They speculate and pass those speculations to investors who have become reliant on their advice. Why? Not for your investing success but rather their ratings.

I wish they would have the young female analysts they had on last week telling you to buy last week's dip again to defend her recommendation. Or Abby Joseph Cohen who was doing the same for that matter. It always cracks me up when I open my financial paper and see Cohen and Joe Battipaglia as featured speakers at investment seminars. I don't think they're been right about anything in the last decade.

Equities

There is no doubt we're still in a correction. However this will be a telling day. Although today's action won't change the immediate trend, it will determine whether this correction moves from a 10-15% correction to a 15-20% correction.

Based on fundamentals and revised earnings forecasts, it is my opinion that US stock markets are cheap. In fact I think they are very cheap however it doesn't mean that they can't get cheaper. Equities markets are efficient and will find a level where technicals match re-evaluated fundamentals. When I see that point I'll let you know.

Trading Levels

The pressure being put on equities and commodities this morning has taken many of my levels out of the picture today. We are trade well below S2 levels.

I don't publish my 3rd range of Support and Resistance. However for those interested in speculating on picking a bottom today, S3 for ES M10 is 1045.33. S3 for TF M10 is 620.73.

If you have any questions or would like more of the levels that I don't publish please feel free to contact me via email at ruria@manducatrading.com or toll free at 866.312.4965.

Good luck!

Weekly Trading Levels

Below you'll find this week's Weekly Pivots and Trading Levels. If you have any questions as to how I use these number to trade, feel free to contact me via email at ruria@manducatrading.com or toll free at 866.312.4965.