S&P 500 Emini aug 27 daily chart

S&P 500 Emini futures support and resistance Aug. 26

We have a reversal bar on the daily.

Looks like we might retest to 74-5 then could head down to the low 60's. We break the 59 mark and could see 48-51.

upper trend line held supporting TL looks like tonight could be it.

Aug 25 S&P 500 Emini futures daily chart

Housing and the Economy

I have been asked how the market looks for housing.

Consider this, summer is seasonally the time when most home purchases occur. This uptick from month to month is not a relavent figure. Sales normally increase in July and August. There are too many problems even with prime borrowers. This latest uptick is the worst.

Now, even "prime" quality borrowers are falling behind on payments at a record pace. The delinquency rate on prime mortgages hit 3.71% in the first quarter of this year, according to the Mortgage Bankers Association. That's the highest since the MBA started splitting out subprime and prime borrowers back in 1998. The overall delinquency figures go much farther back — to 1979. They show the same thing: A record high delinquency rate of 6.35%.



Home prices are way down, but they show little signs of bottoming out just yet. How Many families can afford 48,000 a year to own a home in Orange County. Yes, intrest rates % are down but how much of a persons income will housing take, 50% or more, this is the fundamental problem. Figures from S&P/Case-Shiller reflect that home prices down 15.8% in May from the same month a year earlier. That's the largest drop on record. Prices fell in all 20 metropolitan areas the firm tracks. Las Vegas (-28.4%), Miami (-28.3%), Phoenix (-26.5%), and multiple markets in California (-24.6% in L.A., -23.2% in San Diego, and -22.9% in San Francisco) are leading the way.

Aug 22 S&P 500 Hourly chart with support and divergence

Have an open gap here from yesterday. Looks like sentiment will hold this market up a little bit.

LEH might be purchased by a Korean Development bank which will help the financials incredibly.

Sentiment is hopeful.

Don't fall in love with the upside on this market.

Economic News Bernanke, oil and treasury

Treasuries declined after Federal Reserve Chairman Ben S. Bernanke suggested that the central bank is relying on slowing growth and a strengthening dollar to contain inflation. The decline pushed yields on two-year notes up the most in a month. Government debt had slumped earlier after the Korea Development Bank said it's ``considering'' an investment in Lehman Brothers Holdings Inc., easing concern about the fallout from credit market losses.

Bernanke called dollar stability and price declines in oil and other commodities ``encouraging.'' Still, the inflation outlook remains ``highly uncertain'' and the Fed ``is committed to achieving medium-term price stability and will act as necessary to obtain that objective,'' he said at the Fed Bank of Kansas City's annual symposium in Jackson Hole, Wyoming.

Treasury notes also declined as gains in European and U.S. stocks tempered demand for the safest of assets. The Standard & Poor's 500 Index rose 0.9 percent, while the Dow Jones Stoxx 600 Index rose 1.6 percent. Futures contracts on the Chicago Board of Trade show odds of 56 percent the Fed will raise its 2 percent target for overnight bank lending in January. A month ago, traders predicted a rate increase in December. Banks and securities companies have reported more than $500 billion of writedowns and credit-related losses linked to the collapse of the subprime mortgage market since the start of 2007.

Aug 21 S&P 500 Emini futures Daily chart

Swing traders can grab the top of the channel on the daily for a bear flag that is forming, probably kick off this next week. There apperars to be room for another quick and volital bull rally, then the "oh no, what did I buy?" hedge funders and MM's will dump and short sell their own stock.

Looking for this especially in financials. They can confuse the hell out of the pundits for a big set up.

Expecting a move up from here bouncing off of support. Staying in this channel.

Aug 20 2008 Emini S&P 500 futures ES hourly close

Stayed in the range. Tomorrow could see it close the gap.

Fannie and Freddie moving market, bonds, oil

Fannie Mae and Freddie Mac tumbled in New York trading to the lowest valuations since at least 1990 as speculation increased that the U.S. Treasury will bail out the mortgage-finance companies, wiping out shareholders. Fannie, based in Washington, slumped as much as 20 percent and McLean, Virginia-based Freddie dropped as much as 32 percent, extending its losses to 90 percent for the year. Rising borrowing costs and evidence that demand for their debt was waning last month led Treasury Secretary Henry Paulson to seek the authority to pump unlimited amounts of capital in Fannie and Freddie in an emergency. Freddie paid its highest yields on record in a debt sale yesterday amid concern that credit losses are depleting the capital of the beleaguered mortgage-finance companies.

Fannie and Freddie have $223 billion of bonds due by the end of the quarter and their success in rolling over that debt may determine whether they can avoid a federal bailout. Fannie has about $120 billion of debt maturing through Sept. 30, while Freddie has $103 billion.
Treasuries rose after a report that Freddie Mac will meet with government officials, fueling concern a takeover of the mortgage-finance provider is imminent and leading investors to the safety of government debt.

Oil prices began creeping upward this morning, but a government report that reflected a surprising increase in crude supply stalled the oil rally and allowed The Dow to climb as much as 80 points before falling back. Treasuries are steady with the 10 Year yielding 3.80%.

Aug 20 2008 Emini S&P 500 futures ES hourly

Open gap at 1282 area.

Bouncing off of support.

Aug 19 2008 Emini S&P 500 futures ES hourly

Trend line busted fell through support, if we break support here we are headed for the open gap at 49.75.

Expecting some big support here.

Lets see where it goes.

Focus on Growth not on inflation

Two-year Treasury notes rose on concern that financial firms face widening losses from credit markets and the U.S. housing slump. Yields on the securities touched a five-week low as investors sought the relative safety of government debt. Lehman Brothers Holdings Inc. may post $4 billion in writedowns when it reports fiscal third-quarter earnings, JPMorgan Chase & Co. analysts said. Builders in the U.S. broke ground on the fewest houses in 17 years in July, signaling the drop in residential construction will continue to hurt economic growth.
U.S. stocks fell for a second day, boosting the appeal of government debt's fixed returns. The Standard & Poor's 500 Index lost 0.7 percent, with the S&P 500 Financials Index dropping the most among 10 industry groups.

It's not surprising that high oil and other commodity costs have had a huge impact on prices for everything, at every level. At $147 per barrel, oil impacts everything that gets produced, transported and ultimately purchased by consumers. Even when you exclude "food and energy costs", you still have lingering adds due to the price of fuel... and they'll be with us for a while. But, oil is now trading at $112 per barrel, down $35 from its July peak. It will take some time for these lagging indicators to reflect the relief that is already coming from that. What we're seeing now is the worst reflection of inflation because oil was at its highest in July. It would serve us all better if the focus would be on growth instead of inflation.

Aug 18 2008 Emini S&P 500 futures ES hourly

Still have three open gaps. Supporting green lines, showing a little strength, we could see it bounce up take out the target and then make a run for new lows.

The 200 ema could add a bit of support to price.

Watch out for low volume pushes that move rapidly. Not many big players putting on positoins. Nothing over a thousand today.

Little bit of news tomorrow. No big suprises except for a banking news.

Aug 18 S&P 500 Emini futures Daily chart

Treasury 10-year note yields touched the lowest in more than a month on speculation a slowdown in global economic growth and lessening inflation will keep U.S. policy makers from raising interest rates this year.

Traders' expectations for inflation approached the lowest level in five years, yields on Treasury Inflation Protected Securities indicated, following oil's 22 percent decline since reaching a record $147.27 a barrel on July 11. Shorter-maturity debt rose as stocks fell on speculation the government will bail out mortgage-finance companies Fannie Mae and Freddie Mac and leave the shares worthless. The perception is that the worst of the inflation news is behind us and it will be treated almost like an old number. The whole story about the inflation picture improving into year-end has really allowed the bond market to rally.

Traders added to bets the Fed will leave its target rate for overnight lending between banks unchanged through December, futures contracts on the Chicago Board of Trade showed. The likelihood was 77 percent, compared with 53 percent a week ago. The rest of the bets are for an increase in the rate of at least a quarter-percentage point.

Aug 15 Daily SP 500 Emini Futures

Aug 15 Daily Chart SP500 Emini

Aug 14 S&P 500 and economy

The Labor Department said that Jobless Claims fell by 10,000 last week to 450k, but remained at levels that show strained labor markets. This is above the 432k that had been forecast although it was the first time that weekly claims fell since early July. The four-week moving average of new jobless claims climbed to 440,500 last week from 421,000 the week before - the highest reading in more than six years.

We also had July's Consumer Price Index, rising at twice the rate expected and showing the fastest rate of year-over-year growth in 17-1/2 years! The CPI was +.8% in July after being +1.1% in June. Prices were up 5.6 percent from a year ago, the sharpest year-over-year rise since 5.7 percent in January 1991. That was also well above the 5.1 percent increase that economists had forecast. The core CPI (ex-food & energy) still was +0.3% in July, above forecasts. Energy prices are coming down, and there is no meaningful probability of Fed rate hikes until things stabilize. After this news, the 10-yr continues to hover around 3.90% and mortgages are unchanged so far.

Aug 12 Daily chart SP 500 emini futures

S&P 500 has followed the support trend line in this move up towards the 1322.5 open gap and the 50% retracement.

Today's close will be the key for this continuation of the midterm retracement. Below 1280 and we will probably be heading back to the lows.

Master something, knowing is not doing.

Herbert Simon, Nobel laureate: "A wealth of information creates a poverty of attention." Fr. Rohit Bhargava's book.

Just used this quote with a group of technical traders that make no money. After an hour of debating and listening to their positions I noticed that they all shared one thing in common. Alot of information, no ability. They were lacking the ability to execute a profitable trade and manage the money once in the trade.

Simple is better. Learning to consistently manage your trade once you are in to get the maxim benefit is the key. Mastery is not how much you know, it is how well you use what you know. So check your self. Quantify your trades, sometimes what you think and the reality of what you do is different.

Master, Master, Master.....

August 11 S&P 500 emini chart

I am still looking for the close of the 1322.50 target.

Oil is making it easy for this market to move. I am expecting to see $107 a barrel. Lets see how long it will consolidate down here.

Euro is also loosing strength, expecting to see it head to 143 over the following months.

Gold will also see $810 area. Dependant on news and Israel and Iran's ability to get along.

Expecting to see a quite period for the next 10 days and then some break out movements in the market.

Don't fall in love with the upside.

Economy Fannie Mae and Euro took a dive

Ten-year notes and 30-year bonds were little changed on the week after the government sold a combined $27 billion of the securities in quarterly auctions. U.S. mortgage lenders Fannie Mae and Freddie Mac posted bigger-than-expected losses this week, adding to speculation that the Treasury will have to sell more debt if it decides to provide the companies with capital. Traders now see a 33 percent chance that U.S. policy makers will raise interest rates by year-end, compared with a 65 percent likelihood a week ago. Oil touched a three-month low of $117 today, easing concern that inflation will accelerate.

In Europe, speculation also eased that the European Central Bank, whose sole mandate is to control inflation, will raise interest rates as the economy slows. The ECB held its benchmark rate at 4.25 percent yesterday. Its president, Jean-Claude Trichet, said expansion will be ``particularly weak'' in the second and third quarters. U.S. stocks rose, helping the Standard & Poor's 500 Index post the first back-to-back weekly gain since May, as retailers and airlines rallied on speculation lower commodity prices will boost earnings.

Home Depot Inc., Macy's Inc. and Gap Inc. climbed as the dollar's biggest advance against the euro in four years pushed crude oil to a three-month low. General Motors Corp. rallied, while United Airlines parent UAL Corp. jumped almost 10 percent. Fannie Mae dropped after joining Freddie Mac in posting a bigger- than-estimated loss and slashing its dividend.

Aug 7 hourly with levels and targets S&P 500

Looks like the market is following the trend, 92 will be the key.

Levels are posted. Could we be getting the spring to take out the previosly posted open gap at 1335. We shall see.

For all the news that hit the market today the reaction was quite mild.

Aug 6 S&P 500 showing gaps and S&R futures emini

This is a longer term chart showing a 50 % retracement target to 1335, this is exactly where we have an open gap that has not been filled.

We also have some downside open gaps that have not been filled.

1340 is the 200 MA on the monthly chart also.

we have opportunities in both direction.

This chart is showing a few open Gaps. The one that is changing my perspecitve is at 1335 area.[9:35:53 AM] Brightstone (Joel) says: This looks to me as a set up for an investor trap. Considering this is pre election, and with the movements in currency dollar strength, Oil price decreases and the smoothing over of the subprime crisis and bank failures, this new target seems completely reasonable to me. This is sort of a bull trap. I noticed that my short bias has influenced my trading and was searching for a way to leverage sentiment and this was staring me in the face. The 50% retracement is also at the 1335 area. The pattern is an ascending triangle with accumulation. The aggressive buyers outnumbering sellers since the temporary bottom has been put in.

If it completed to 35, we would have an ascending wedge.....I will be watching volume too. I can't imagine a 3 million volume upmove day like 7 - 16 to push us through.

Aug 6 economy today

Freddie Mac, the U.S. mortgage-finance company hobbled by record foreclosures, slashed its dividend at least 80 percent after posting a quarterly loss that was three times wider than analysts' estimates. Freddie dropped as much as 17 percent in New York trading and the larger Fannie Mae declined 14 percent on mounting concern that the government-chartered companies will sacrifice shareholders to bolster capital and avoid a bailout by the Treasury. Freddie doubled its reserves for future home-loan losses to $2.8 billion. Freddie has 22,000 properties in foreclosure, the most since the company was created in 1970 during the Vietnam War, and now anticipates losing 26 percent on each loan, up from 22 percent. McLean, Virginia-based Freddie has plunged 76 percent this year on concern the company may not have enough capital to overcome delinquencies on the $2.2 trillion of mortgages it owns and guarantees.

Crude oil futures have tumbled more than 20 percent since touching a record $147.27 a barrel in New York on July 11, a threshold often seen as the start of a bear market. Oil fell as low as $117.50 a barrel, amid signs of a global economic slowdown likely to curtail already weakening demand. The dollar today touched its highest in more than seven weeks against the euro, lessening the appeal of commodities as an inflation hedge. The decline follows a one-year doubling of prices as the dollar weakened, demand in Asia grew and Iran's nuclear program spurred concern that the country, the Middle-East's second- biggest oil producer, might face a military attack from Israel.

Aug 5 ES charts for Aug 6

We have an open gap sitting at 1320. It has not been filled yet, we could be heading up there. This pattern is an ascending triangle on the hourly. We have two open gaps below too.

Support and resistance are up, trade what you see.

Aug 5 hourly pre fed targets

Make on Snapvine Copy This

Aug 5 hourly pre fed

this is pre fed charts this AM.

Watch for them to bring it up. We are getting alot of commodities rolling over, could be a good kick off for a further retracement.

Gold also looks like it is about to roll over.

Aug 4 S&P 500 5 min chart

Quite a choppy day we had on the S&P 500, a few breakouts.

FOMC meeting tomorrow so could be a slow morning as the traders wait for no announcement.

Alot is going on in Europe, they are showing signs of inflation and their un official unemployment is running in to the 10's+.

Aug 4 S&P 500 Daily

Oil, FOMC and Fannie

The Commerce Department reported this morning that Personal Income and Personal Spending both increased more than anticipated in June, providing evidence that inflation may have prevented those stimulus checks from the having the impact that was hoped.

Bonds and mortgage were off significantly in early trading on the news, but have recovered nicely. Currently, the Fannie Mae 6.00% coupon is off by 16 basis points, but it was down by 35bp earlier. The yield on the 10 Year Treasury Note is 3.94%. Stocks are trading lower by 85 points.

The Fed's FOMC (Federal Open Market Committee) is meeting today and tomorrow to discuss interest rate policy. No rate changes are expected at this meeting, but based on recent comments from a few FOMC Members, there appears to be disagreement amongst the committee. As with the past two meetings, the language in their Policy Statement will be reviewed carefully by analysts to interpret the likelihood of rate increases before the end of the year.

Oil prices have come down more than $20 per barrel in the past few weeks to $125. While that's been helpful to gasoline prices, some perspective might be in order. According to the Department of Energy, as recently as February 2002 the price of oil was just $20 per barrel.