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ADP Employment falls 473K in June; ISM Index rose to 44.8, the highest since last August; Pending Home sales rose for the fourth consecutive month
ECONOMIC DATA 8:30 AM Initial Claims 8:30 AM Average Workweek 8:30 AM Hourly Earnings 8:30 AM Nonfarm Payrolls 8:30 AM Unemployment Rate 10:00 AM Factory Orders MARKET COMMENTARY AND OUTLOOK Last Friday I wrote: “Yesterday’s early marginal new highs, just above the 924.00-926.00, obvious resistance areas, from where the markets made a U turn, has probably placed a temporary top after four days where the indexes bounced from their most recent lows. Those levels and the 918.50 and 908.50 areas will continue to play an important role during the next sessions and weeks. The end of quarter is over and despite the sell off from the early highs, the 908.50 level was well defended and the markets bounced lately in the session, so if they will continue to try and push lower resuming the downtrend, another down session may be seen today; in that case we could call a short term top. There is not confirmation yet that this is the case, and the rest of the week could show more sideways action between the 908.50 and 925.00 areas. There are a bunch of economic reports to get released during the sessions, and volumes are very light in front of the holiday, so be careful as the markets may show some erratic moves. For today’s trading session, if yesterday’s sell off was only a one day event, markets MUST rally today, but a second negative session will probably see more downside follow through during the rest of the week. Try to maintain a long position above 918.50 but be careful if the SP starts to trade below it.” The early pullback to 919.00, just above the 918.50 area gave way to a low volume short covering rally, the markets fail to hold near the highs and they pulled back on the afternoon. There is no too much to add to the recent analysis, the markets continue to trade in a sideways pattern, and as is many occasions, the weekly range will be a narrow one. This may give way to another test of the highs, then a failure at those areas, some kind of pullback and a long sideways pattern that probably will get resolved to the upside later in the year. However a wide range downside session could give way to some selling, and this can happen during today, once the unemployment numbers get released. I wrote on one of my previous week reports, that the job market numbers are a lagging indicator, and that even if the data is bad and the initial reaction is negative, markets may be able to rebound; I don’t see those changing unless a wide range negative session shows some follow through. Today, most of the economic numbers will get released before the opening, then later the Factory Orders numbers will be out, so the early action is what traders will be expecting and then they will leave for the long weekend; if you don’t catch the early move, just relax and start your vacation. Markets will be closed tomorrow. TODAY’S SESSION For today’s trading roadmap and intraday updates, please read the authors bio.
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The Mini Trade
Support, Pivot and Resistance levels courtesy of Arturo Stern. He authors the E-mini Daily trading advisory which gives technical analysis on all the major stock index futures contract. For the full report go to www.theminitrade.com Arturo can be reached at arthur@theminitrade.com.
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