TraderMongers Day Trading Economic Analysis: July 28, 2010 Beige Book

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

A weak July consumer confidence fell to a 5-month low offset the latest round of strong corporate earnings. On Wednesday June durable goods orders as well as the weekly mortgage applications and petroleum reports. The Beige Book is expected today which report economic conditions used for the FOMC meetings in 2 weeks. Expect the market to move after the 2pm Eastern Standard Time announcement.

On the S&P 500 on the 60-day chart shows we have been rallying since the beginning of July especially after options expiration last Friday. Expect the market to hit the January 2010 resistance level as we approach the slowest month of the year – August. The volume will not be enough in August to break through the January resistance levels. The FOMC announcement is in two weeks so expect the markets to remain calm and volume stale for the rest of the summer.

On the daily chart of the S&P 500 we were trading between the cushion area of 144 and 200 day moving averages as traders and investors are cautious looking ahead especially with the upcoming mid-term elections, uncertainty with European debt, and the current Gulf Oil Spill. Now we have slowly broke out of this area after the European banks passed the stress tests. However expect the markets to remain trading below the January 2010 resistance levels.

The Market Volatility Index (VIX) has been active due to the seasonal selling trend of the ‘Sell in May’ philosophy however seems to stabilizing after the Fourth of July weekend and the anticipation of second quarter 2010 earnings season. Currently the VIX trading below the 144 and 200 day moving averages indicating more riskier approach towards investments and assets.

The Chicago Board Options Exchange (CBOE) Market Volatility Index measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar when the index is trading above 30.

Summary of Major S&P Pivot Levels

1219: S&P 500 52 Week High

Technical Levels Natural Support and Resistance

1125: January 2010 Resistance Level

1100: Natural Support Level

Technical Levels 5 Minute Chart

1111: 144 Day Fibonacci Moving Average on 5 Minute Chart

1108: 200 Day Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1101: 144 Day Fibonacci Moving Average on Daily Chart

1088: 200 Day Moving Average on Daily Chart

Daily Economic Calendar

Mortgage Applications / 7.00AM EST

Durable Goods Orders / 8.30AM EST

Petroleum Report / 10.30 AM EST

Beige Book / 2.00 PM EST

* Subscribe to our News Feed to get Updates, Trading Strategies Daily, and Sector Stock Lists.

- Technical and pivot levels for the S&P and other indices

- Alerts for 52 highs and lows as well as their respective sister stocks to watch

- Highlights on the economic calendar and trading strategies off those numbers

- Analysis of various sectors of the markets as well as sister stocks to watch

- Much more

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

All Right Reserved TraderMongers.com © 2010

TraderMongers: Day Trading Economic Analysis July 23, 2010

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

One week ago we suggested that the market will sell off on Friday due to traders and investors not holding their positions over the weekend. We are currently holding this belief going into this Friday – either the market sells off or trades flat. The rally of the markets today due to strong earnings pushed the dollar lower against the euro as traders took more risk.

During a testimony between Ben Bernanke and the House Financial Services Committee, the Fed Reserve Chairman spoke about further stimulus actions.

Looking at the Asia markets China is expected to slowdown and Japan was downgraded by Credit Suisse.

We only rallied to about the same level as one week ago on the 10 minute chart of the S&P 500 as traders relieved their positions last Friday and bought up their shorts this week. With no economic news on Friday except for earnings expect it to be a quiet day in the markets with a possibility of short sellers coming by the afternoon.

The S&P 500 shows that we are nearing the 144 day moving average on the daily chart. The 1100 area is a tough resistance level to break when the volume is not there during the slow summer trading months.

The Chicago Board Options Exchange (CBOE) Market Volatility Index (VIX) measures options activity within the market and is widely used tracking the S&P 500. The Market Volatility Index (VIX) has been active due to the seasonal selling trend of the ‘Sell in May’ philosophy. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash.

If the index is above 30 then traders and investors are switching from riskier assets to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

Lower than 30 especially breaking through the two major moving averages of 144 and 200 means that people are buying riskier assets and financial instruments. The Market Volatility Index seems to stabilizing after the Fourth of July weekend and along with the release of second quarter 2010 earnings season.

Currently the VIX is trading below 30 however it is resting and wrapping around the 144 and 200 day moving averages. This suggests that the volume and activity is not there to indicate a directional trend of either bullish or bearish. Direction would mostly come after the mid-term elections in November once fiscal and monetary policies are defined for the next two years.

Summary of Major S&P Pivot Levels

1219: S&P 500 52 Week High

Technical Levels Natural Support and Resistance

1125: January 2010 Resistance Level

1100: Natural Resistance Level

1075: Natural Support Level

Technical Levels 5 Minute Chart

1083: 144 Day Fibonacci Moving Average on 5 Minute Chart

1181: 200 Day Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1100: 144 Day Fibonacci Moving Average on Daily Chart

1087: 200 Day Moving Average on Daily Chart

Daily Economic Calendar

No Economic Numbers

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

All Right Reserved TraderMongers.com © 2010

TraderMongers: Day Trading Economic Analysis July 16, 2010

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

Deflation risk is influencing the markets as lower money supply and credit are affecting both the producer prices and manufacturing sectors. Lower food prices affected the producer price index which is a leading indicator affecting consumer prices. Overall this translates into low interest rates and could be good for profits if money supply and credit is available for growth.

However lower numbers in the manufacturing sector translated into a slowdown in growth. This has been indicated by the lower Empire State and Philly Fed numbers as well as the Industrial Production report. If these manufacturing reports announced higher numbers and PPI was low then we could have a positive and sustained growth. But lower numbers in manufacturing and a lower PPI makes a case for deflation risk.

The S&P 500 opened up lower breaking Wednesday’s previous low before rallying at the end of the day. Looking at the 5 minute chart we are in a trading range making three attempts flirting with the 1100 level on the S&P 500.

On the daily chart of the S&P 500 we are trading between the cushion area of 144 and 200 day moving averages as traders and investors are cautious looking ahead especially with the upcoming mid-term elections, uncertainty with European debt, and the current Gulf Oil Spill.

The Market Volatility Index (VIX) has been active due to the seasonal selling trend of the ‘Sell in May’ philosophy however seems to stabilizing after the Fourth of July weekend and the anticipation of second quarter 2010 earnings season. Currently the VIX is at the 144 and 200 day moving averages indicating a steady cautiousness between traders and investors.

The Chicago Board Options Exchange (CBOE) Market Volatility Index measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

Summary of Major S&P Pivot Levels

1219: S&P 500 52 Week High

Technical Levels Natural Support and Resistance 

1125: January 2010 Resistance Level

1100: Natural Support Level

1075: Natural Support Level

Technical Levels 5 Minute Chart

1089: 144 Day Fibonacci Moving Average on 5 Minute Chart

1188: 200 Day Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1102: 144 Day Fibonacci Moving Average on Daily Chart

1087: 200 Day Moving Average on Daily Chart

Daily Economic Calendar

Consumer Price Index / 8.30 AM EST

Consumer Sentiment / 9.55 AM EST                  

* Subscribe to our News Feed to get Updates, Trading Strategies Daily, and Sector Stock Lists. 

- Technical and pivot levels for the S&P and other indices

- Alerts for 52 highs and lows as well as their respective sister stocks to watch

- Highlights on the economic calendar and trading strategies off those numbers

- Analysis of various sectors of the markets as well as sister stocks to watch

- Much more

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

All Right Reserved TraderMongers.com © 2010

TraderMongers: Day Trading Economic Analysis July 14, 2010

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

Yesterday the US trade gap jumped 4.8% from $40.32 billion in April to $42.27 billion in May which is the highest level in 18 months. This increase will cut into second quarter GDP forecasts. However this did not stop traders and investors to switch to riskier assets as the market went higher on the sixth straight day. The dollar declined as investors stepped up and demonstrated willingness to take risk. The futures pushed the S&P 500 higher in the morning and maintained a positive direction towards the close yesterday on the five minute chart.

But a worsening trade gap is a drag on growth. Growth must be sustained for unemployment to decline and payroll numbers to advance. Especially when economic turmoil in Europe, financial oversight and healthcare reform are passed around as reasons that employers are unwilling to take new business risks. So why is the market rallying?

Second quarter earnings season is pushing the market higher. Nobody wants to be short during earning seasons and many traders and investors are covering their positions. The S&P 500 is nearing the 1100 natural resistance level and trading between the 144 and 200 day moving averages on the daily chart. Right now we are seeing a massive short covering during the month of July due to earnings season. Expect August to be a month where volume dries up and short sellers reenter the market.

The Market Volatility Index has been active due to the seasonal selling trend of the ‘Sell in May’ philosophy. If the index is above 30 then traders and investors are switching from riskier assets to cash. Lower than 30 especially breaking through the two major moving averages of 144 and 200 means that people are buying riskier assets and financial instruments.  

The Market Volatility Index seems to stabilizing after the Fourth of July weekend and the anticipation of second quarter 2010 earnings season. The volatility index is pushing for riskier assets however with the upcoming mid-term elections, uncertainty with European debt, and the Gulf Oil Spill – traders and investors are cautious looking ahead.

The Chicago Board Options Exchange (CBOE) Market Volatility Index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

Summary of Major S&P Pivot Levels

1219: S&P 500 52 Week High

Technical Levels Natural Support and Resistance 

1125: January 2010 Resistance Level

1100: Natural Support Level

1075: Natural Support Level

Technical Levels 5 Minute Chart

1088: 144 Day Fibonacci Moving Average on 5 Minute Chart

1184: 200 Day Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1102: 144 Day Fibonacci Moving Average on Daily Chart

1086: 200 Day Moving Average on Daily Chart

Daily Economic Calendar

Mortgage Applications / 7.30 AM EST

Retail Sales / 8.30 AM EST

Business Inventories / 10.00 AM EST

Petroleum Report / 10.30 AM EST

FOMC Minutes / 2.00 PM EST                           

* Subscribe to our News Feed to get Updates, Trading Strategies Daily, and Sector Stock Lists. 

- Technical and pivot levels for the S&P and other indices

- Alerts for 52 highs and lows as well as their respective sister stocks to watch

- Highlights on the economic calendar and trading strategies off those numbers

- Analysis of various sectors of the markets as well as sister stocks to watch

- Much more

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

All Right Reserved TraderMongers.com © 2010

TraderMongers: Day Trading Economic Analysis July 13, 2010

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

The market struggled to find direction amidst uncertainty weighing on Europe and second quarter 2010 earnings season. Many traders and investors took profits in the morning before the S&P continued its trend just above Friday’s previous high. 

Before the second quarter earnings season started the S&P 500 rallied just below the 200 day moving average on the daily chart of 1086. The results of the second quarter earnings could push the market higher if the numbers are better than expected. However any market leader having a bad second quarter could push an industry sector lower while another sector leader rise higher.

For example Walmart could lead the retails sector higher if second quarter earnings are better than expected and the outlook remains positive. However technology giant Apple may suffer lower second quarter earnings and push the other tech stocks lower.

The Market Volatility Index has been active due to the seasonal selling trend of the ‘Sell in May’ philosophy. If the index is above 30 then traders and investors are switching from riskier assets to cash. Lower than 30 especially breaking through the two major moving averages of 144 and 200 means that people are buying riskier assets and financial instruments.  The Market Volatility Index seems to stabilizing after the fourth of July weekend and the anticipation of second quarter 2010 earnings season.

The Chicago Board Options Exchange (CBOE) Market Volatility Index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

Summary of Major S&P Pivot Levels

1219: S&P 500 52 Week High

Technical Levels Natural Support and Resistance 

1125: January 2010 Resistance Level

1100: Natural Support Level

1075: Natural Support Level

Technical Levels 5 Minute Chart

1073: 144 Day Fibonacci Moving Average on 5 Minute Chart

1171: 200 Day Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1102: 144 Day Fibonacci Moving Average on Daily Chart

1086: 200 Day Moving Average on Daily Chart

Daily Economic Calendar

International Trade / 8.30 AM EST

Treasury Budget / 2.00 PM EST

* Subscribe to our News Feed to get Updates, Trading Strategies Daily, and Sector Stock Lists. 

- Technical and pivot levels for the S&P and other indices

- Alerts for 52 highs and lows as well as their respective sister stocks to watch

- Highlights on the economic calendar and trading strategies off those numbers

- Analysis of various sectors of the markets as well as sister stocks to watch

- Much more

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

All Right Reserved TraderMongers.com © 2010

Day Trading Economic News Analysis: S&P 500 July 8, 2010 Consumer Credit

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

The market pushed higher with the anticipation of the upcoming earnings season pushing the Dow Industrials above 10,000. The Europeans released the results of their bank stress tests relieving some worries and pushing the euro into a 6-week high against the dollar. Yesterday Barrons mentioned the euro positively as they see a rally within the currency. The falling dollar pushed crude oil futures higher along with stocks as traders and investors switched from cash to equities.

The US futures opened above Fibonacci moving averages (8 21 55 144) in the morning and stayed above them as it broke through yesterday’s previous high and the 1050 resistance level. Breaking through two pivot levels gave a confirmation that we were in a rally.

The S&P is currently above the pivot level of 1050 however still below the 200 day moving average of 1086 on the daily chart. The NYSE Euronext indicated 6.9% decline in trading volumes compared to last year. Especially due to the low volume summer months we do not believe we will break through the January 2010 which starts around 1025 until after the November mid-term elections.

The Chicago Board Options Exchange (CBOE) Market Volatility Index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar.

The Market Volatility Index is currently between 25 and 30, which usually means that traders and investors are holding their positions whether it is equities or cash especially with the uncertainty within the global economy.

The markets do not have enough volume to push and stabilize the markets during the summer months and most likely stay between this range for some time. As you can see from the Volatility chart that beginning in May, traders, investors, and institutions started increasing their cash positions and stuck to the “Sell in May” philosophy.

Tomorrow the Forex markets may watch the Bank of England and the European Central Bank interest rates announcements. On the US economic front watch out for weekly jobless claims and natural gas report as well as the consumer credit numbers in the afternoon.

* Subscribe to our news feed to get updates, strategies, and equity trading lists available only on TraderMongers.com

- Technical and pivot levels for the S&P and other indices

- Alerts for 52 highs and lows as well as their respective sister stocks to watch

- Highlights on the economic calendar and trading strategies off those numbers

- Analysis of various sectors of the markets as well as sister stocks to watch

- Much more

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.

Day Trading Economic News Analysis: S&P 500 July 7, 2010 Retail Sales

Understanding the direction of the market as well as the economic activity will lead to profitable trades. Keep up with our live news feed with TraderMongers.com!

S&P 500

The US markets rallied in the morning following positive trading activity within the foreign markets. However selling started once reality set into the minds of traders and investors that nothing fundamentally has changed within the markets. The debt crisis in Europe, BP oil spill, and the China slowdown. The futures started higher in the morning however it fell short of the 1050 resistance level on the S&P 500. Reality set in once ISM Non-Manufacturing numbers were released after 10am and it was lower than the consensus. Selling took place soon afterwards and the S&P 500 rested just above the 1025 natural support level.

Currently the S&P 500 is trading below the 144 and 200 day moving averages on the daily chart. In late June the market rallied just above the 1025 level however it could not break the January 2010 resistance level and it fell back. Due to the low volume summer months we do not believe we will break through the January 2010 until after the November mid-term elections.

The Chicago Board Options Exchange (CBOE) Market Volatility Index (VIX) measures options activity within the market and is widely used tracking the S&P 500. A common trading strategy for traders and investors includes a VIX level of 30 or above means an immediate switch from equities to cash. Traders and investors are retreating from the markets and finding safety and protection within the Treasuries, gold, and the dollar. 

The Market Volatility Index is currently between 25 and 30, which usually means that traders and investors are holding their positions whether it is equities or cash especially with the uncertainty within the global economy.

The markets do not have enough volume to push and stabilize the markets during the summer months and most likely stay between this range for some time. As you can see from the Volatility chart that beginning in May, traders, investors, and institutions started increasing their cash positions and stuck to the “Sell in May” philosophy.

* Subscribe to our news feed to get updates, strategies, and equity trading lists available only on TraderMongers.com 

- Technical and pivot levels for the S&P and other indices

- Alerts for 52 highs and lows as well as their respective sister stocks to watch

- Highlights on the economic calendar and trading strategies off those numbers

- Analysis of various sectors of the markets as well as sister stocks to watch

- Much more

Disclaimer

The content in this website is provided for educational and informational purposes only. We offer no investment advice and nothing in this material should be construed as such. There is risk of loss when you invest; past performance is never a guarantee of future performance. Trading is the sole responsibility of the individual. No reader should act on the basis of any matter contained herein without getting appropriate professional advice. Every investor or trader should consider all offerings of products and services on their own merits and for suitability to the individual’s personal needs and circumstances.