TraderMongers Day Trading Economic Analysis: August 16, 2010 Empire State Manufacturing Survey

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

After the Federal Reserve stated it will be purchasing Treasurys to keep the economy recovery on track, worried investors sold off accordingly to the FOMC announcement. The added news of China not helping the global economy during the recovery multipled the existing fear. The Dow Industrials moved above their June high however the S&P 500 did not confirm the move by moving higher. These are indications of negative trends and bearish markets ahead until the November mid-term elections are over.

As the August volume gets thinner analysts need to look at the charts with a long-term view of the markets. Two weeks ago the markets were trying to break through the January 2010 resistance level beginning around 1125 on the S&P 500. The market made several attempts however fell short and it is currently trading below the 1100 area.

On the daily chart of the S&P 500, the market is currently trading below the 144 and 200 day moving averages after its failed attempt trying to break through the January 2010 resistance level. We expected August to trade below this level due to lack of volume and uncertainty within the markets including the China slowdown, upcoming elections, and weak labor market.

The Market Volatility Index or VIX track prices that investors are willing to pay for options on the S&P 500, usually to protect themselves against declines in stocks. Currently the VIX trading at the 144 and 200 day moving averages indicating more risky approach towards investments and assets. The thin trading volume in August magnifies moves on the VIX so markets could be less liquid markets than fear-driven.

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 15 Minute Chart

1096: 144 Day Fibonacci Moving Average on 5 Minute Chart

1099: 200 Day Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1102: 144 Day Fibonacci Moving Average on Daily Chart

1091: 200 Day Moving Average on Daily Chart

Daily Economic Calendar

Empire State Manufacturing / 8.30 EST

Housing Market Index / 10.00 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: August 12, 2010 Jobless Claims

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

Slowing growth in China and flagging US recovery as well as the Federal Reserve pledging to buy more Treasurys to keep the economy recovery on track brought the markets down the day after the FOMC Announcement.

Historically August is the weakest month of all seasons as many institutions, investors, and traders are away during the month of August on vacations before their children go back to school in September. We have stated to beware of rallies as the middle of August seems to be stronger than the beginning and the end according to the Stock Trader’s Almanac.

Traders seem to sell before the weekend and follow the direction of the foreign markets after they trade on Monday. However if the markets are lower during the week then traders may buy back their shorts before the weekend so we could expect a rally on Thursday or Friday. Currently we are trading below the 1100 level on the S&P. Last week we had a hard trouble breaking through the January 2010 resistance levels due to thin August volumes.

On the daily chart the S&P is behaving exactly as predicted. It rallied to the 1125 level which begins the January 2010 resistance then due to thin volume fell threw between the 144 and 200 day moving averages. We expected August to trade below this level due to lack of volume and uncertainty within the markets including the China slowdown, upcoming elections, and weak labor market.

The Market Volatility Index or VIX track prices that investors are willing to pay for options on the S&P 500, usually to protect themselves against declines in stocks.

Currently the VIX trading at the 144 and 200 day moving averages indicating more risky approach towards investments and assets. The thin trading volume in August magnifies moves on the VIX so markets could be less liquid markets than fear-driven.

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 15 Minute Chart

1120: 144 Day Fibonacci Moving Average on 5 Minute Chart

1118: 200 Day Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1102: 144 Day Fibonacci Moving Average on Daily Chart

1091: 200 Day Moving Average on Daily Chart

Daily Economic Calendar

Jobless Claims / 8.30 EST

Natural Gas / 10.30 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: August 10, 2010 FOMC Announcement II

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

Today is the 7^th trading day of August and the market has held up well however today is the FOMC Announcement so anything can go. After the Nonfarm payrolls fell by 131k last month, traders and investors are looking for the Fed will need to ease policy to stimulate the economy. Some of these measures include the Fed buying Treasuries and postponing any sales of its balance sheet assets. However the concern over deflationary pressures is a concern for the Fed.

According to the Stock Trader’s Almanac, the S&P was up only twice in the last 13 years and the first nine trading days are the weakest of the month. Historically it is the weakest month of all seasons as many institutions, investors, and traders are away during the month of August on vacations before their children go back to school in September.

Beware of rallies as the middle of August seems to be stronger than the beginning and the end according to the Stock Trader’s Almanac. Traders seem to sell before the weekend and follow the direction of the foreign markets after they trade on Monday. China brought the Asia markets lower pushing the dollar higher against all major currencies.

Yesterday the market broke through into the January 2010 resistance level. Last week the markets had a hard time breaking through the 1125 resistance level which begins the January 2010 resistance levels. Whether the markets can hold on to this level is another story only to be determined after the FOMC announcement. Not enough volume is expected during the summer months to push the markets above this level especially during the month of August. However with global economy expecting slowdown foreign economies see safety within the US markets.

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 as we have stated before the markets will remain trading below the January 2010 resistance levels which begin at 1125.

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 risky 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 15 Minute Chart

1120: 144 Day Fibonacci Moving Average on 5 Minute Chart

1118: 200 Day Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1102: 144 Day Fibonacci Moving Average on Daily Chart

1091: 200 Day Moving Average on Daily Chart

Daily Economic Calendar

FOMC Announcement / 14.15 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: August 9, 2010 FOMC Announcement

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

According to the Stock Trader’s Almanac, the S&P was up only twice in the last 13 years and the first nine trading days are the weakest of the month. Historically it is the weakest month of all seasons as many institutions, investors, and traders are away during the month of August on vacations before their children go back to school in September.

Beware of August rallies as the middle of August seems to be stronger than the beginning and the end. Traders seem to sell before the weekend and follow the direction of the foreign markets after they trade on Monday.

Last week the markets had a hard time breaking through the 1125 resistance level which begins the January 2010 resistance levels. Not enough volume is there during the summer months to push the markets above this level especially during the month of August.

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 as we have stated before the markets will remain trading below the January 2010 resistance levels which begin at 1125.

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

1117: 144 Day Fibonacci Moving Average on 5 Minute Chart

1115: 200 Day Moving Average on 5 Minute Chart

Technical Levels Daily Minute Chart

1102: 144 Day Fibonacci Moving Average on Daily Chart

1090: 200 Day Moving Average on Daily Chart

Daily Economic Calendar

Tuesday FOMC Announcement / 14.15 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