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.

"... although the resiliency of the stock market has been impressive, I think the upward trend that started in mid February is over." (Pivot for Profits 5/3/10)

Good Morning Traders

The quote above is from my post on May 3rd. Needless to say while all the smart guys on CNBC were telling you buy the dip and focus on the long term, I was telling you to cover your ass. Did you listen?

They being said, we're about to test the lows set a few weeks ago that the CNBC idiots are now calling the "flash crash". Why is it so hard to believe that someone wanted to get the hell out of the market? Seriously why hasn't anyone sued those people!

Anyway, a retest of recent lows will be an approximate 10% correction from the highs set in February, in many cases. Can we go lower? Yes. Will we go lower? I'm don't know but I do believe we won't go much lower than the lows set two weeks ago, at least not before Memorial Day Weekend. Remember, the recent bailout of Europe wasn't for Greece, it was to bailout the European Banks who owe US Banks. So really who cares if Greece or any other welfare state collapses? It certainly won't be the first time.

If you have questions or comments or care to work with me in real time, please feel free to contact me at 866.312.4965.

Trading Levels

"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. " (Pivot for Profits 05/18/10)

Good Morning Traders

Before I go breaking my arm patting myself on the back, I have to admit a big part of being right when trading is recognizing current market conditions. For those of you following along, you know that I recognized the change in the bullish uptrend on May 3rd, when I called the latest rally over.

Now we're in the middle of a correction in equities. Actually I'm not sure if it's the middle, beginning or what but I do know equity markets are correcting and there are no signs of that reversing.

That being said, there that doesn't mean you can't make money to the upside when index futures are trading lower like they are this morning. I'll be using a counter-trend trade strategy today.

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

Happy Trading - Rob

Recap and Today’s Trading Levels

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

Today’s and This Week’s Trading Levels

Good Morning

I hope you had a great weekend. I'm finally back up and running after suffer a crashed modem that kept me offline for most of last week.

On May 3rd, I stated " ... although the resiliency of the stock market has been impressive, I think the upward trend that started in mid February is over." At the time, ES M10 and TF M10 were trading 1189.00 and 720.00 respectively. Although we've bounced off the subsequent lows since my call, I still feel we're in a correction.

Equity index futures are at a point where if they were to fall today, I would expect a test of the lows set a couple of Thursday's ago that led all those in the "know" to proclaim that day's trading action a result of an error. An error that no one could identify for days. Folks, that doesn't happen in this business. If there is an error in this business of any magnitude, people know about it immediately. Of course we know now that it was a money manager who unloaded 75,000 e-mini contracts at market.

What's to learn from this ... we people start running for the exits, the bids won't be there. You've been warned.

I don't want to go off on a tangent because equities really are at a Pivot Point if you will. Despite strong corporate balance sheets, the real economic risks around the globe are threatening hopes of a true economic recovery here and abroad. I don't want to be gloom and doom because I believe in the long run, the United States economy will be fine. However this correction could get ugly before things get better. Between Bulls and Bears there is no clear winner as of yet.

As far as trading ideas, I'd be selling all rallies using my levels below.

Energies

Front month for Crude Oil now July. Nat Gas contract will roll to July by end of week.

For those of you looking to get long crude (QM N10) or natural gas (QG N10), I think you can start looking for your entry point now. QM N10 could trade down to about $72.00 for a good risk/reward trade. I'll be looking to play the breakout on QG N10 at 4.60.

Below you'll find my trading levels. 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! - Rob

Monday’s and This Week’s Trading Levels

Good morning,

Below you'll find this week's trading levels.

If you have any questions as to how to use the numbers below, please feel free to contact me via email at ruria@manducatrading.com or toll free at 866.312.4965.