E-mini S&P daily chart

Markets continued to rally last night, trading to a high of 1011.25 and taking out our 1011 stop before closing off the highs at 1002.25. It has been tough luck this round selling into the rally, yet levels seem a little overstretched to be buying at this stage.  With the market closing below 1010 last night, looks like the level still continues to hold as a resistance.  Suggest to sell again here at current 1005/1005,25, with a stop at 1012.

E-mini S&P chart

Since trading to a low of 865.25 on 8th July, the market has seen an amazing run-up to 1016 on 7th August. The recent corporate earnings and economic data might point to a recovery, but a 50% rally from the March lows seems a little over-optimistic given that  we are technically still in a reccession. One reason why the outlook might be looking better is due to the low expectations we have in the aftermath of the 2008 crisis. We are ‘less bad’ now than previous, but that does not equate to ‘good’ yet.

With the market finally seeing some correction, the ES formed a top at 1010 level. Looks like we might see further profit taking from here as markets take a breather. Suggest to sell at current 993/993.25 level with a stop at 1011.

E-mini S&P daily chart

For those of you keeping a tab on the MidnightStar, you would have noticed that I have not been giving my views on the E-mini S&P for the past week. Since the breakout from the previous resistance at 950, market has rallied another 20pts to the current 972/972.25 level. Yet, the outlook remains cloudy. Bulls are finding it increasingly difficult to buy into new highs, and bears, who are having a hard time in this rally are afraid to sell further.

Personally, I find the rally a little overstretched and we should see some correction soon. However, the previous session saw markets trading to a low of 966 only to recover to close at 976. We saw selling once again this morning, to a low of 964 and again market recovered. Suggest to be patient for now than to risk a wrong trade in unsure market conditions.

E-mini S&P daily chart

Fortunately, we had a stop loss at 942, which saved us some money on our shorts at 935.50 as the market traded to a high to 949.25. With the recent massive gains, it sure looks like market is getting rather optimistic about the future economic growth prospects. But are investors taking a half-empty glass as half-full? Market rallied last night on bondholders extending a lifeline to help CIT avert bankruptcy, but overlooked the fact that CIT was on the verge of bankruptcy.

We are testing the 950 resistance level once again. It is hard to determine now if the buying is from real bullish sentiments or from herd instincts afraid to miss out the big bull run if it happens. I would rather stay safe and await clearer signals before taking action.

Stocks jumped, with the S&P closing at its highest level since Nov 2008 after a bid to rescue CIT from bankruptcy. CIT, a major lender to small & mid-sized companies was said to have reached a deal with bondholders for a emergency $3 billion financing.

DJIA +104.21pts (1.19%) at 8848.15

S&P +10.75pts (1.14%) at 951.13

Nasdaq +22.68pts (1.20%) at 1909.29

E-mini S&P daily chart

ES gained a massive 62pts last week! But looking at the charts, we see the gains getting smaller as the weekend approached. This reflects a sign of exhaustion in the market, therefore we are likely to see retractment from here. Suggest to sell at current 935.50/935.75 level with a stop at 942.00.

Our stop at 905 was taken out last night as stock markets extended their gains from the previous session. Feeling a tinge of regret for not cutting losses at once when the market fail to break below the 878 neckline… The recent swings in the markets has made it difficult for traders to ride on a trend. For now, we sit back a little and await better trading opportunities.

E-mini S&P daily chart

As mentioned in yesterday’s post, the ES was hovering around the critical 878 level. It broke through and traded to a low of 865.50 intraday but managed to gather strength and rallied sharply to close at 895.50. Failure to close below 878 might see the level become a support, which is a cause of concern for our shorts. However, as we are still trading below 900, I would suggest to maintain shorts and watch if the rally can sustain.

E-mini S&P daily chart

Since the long red candle last tuesday, market has been hovering around the support / resistance 878 level. Technically it looks weak due to the formation of the head and shoulders, therefore we are comfortable to hold on to our 878 shorts from last week, with stop at 905. Lots of earnings from major companies this week, so watch out for the swings!

E-mini S&P daily chart

We traded to a low of 865.25 last night but recovered to close at 873.75. Despite the pullback, we have broken and closed below the neckline of 878 and we see further downside to come. Continue to hold on to shorts from previous session.

E-mini S&P daily chart

Last night, the ES made a feeble attempt to rally and traded to a high of 898.25 before giving way. With the formation of the long down candle last thursday, and another one last night, is the market too low to sell and have we missed the selling action? I think not.

Markets seem to have finally realised that the recent rally has been over-extended without significant fundamentals to support. Technically, we have formed a head and shoulders pattern which opens us to further downside. Suggest a sell at current level 877.75/878 with a stop at 905.

E-mini S&P daily chart

ES flirted with the 878 support level as it traded to a low of 882 last night but rebounded to close at 895.50. The rebound hinted of some upside potential, however, with the market having formed tops at 950, 923 and 905, any rally is likely to see resistance, especially after last week’s weaker than expected job data which has renewed doubts about the economic recovery. Watch for tonight’s action, we might test 900 once again, and sell on signs of weakness.

Stocks were down most of the session but rebound in late trading as players bought into defensive stocks. Healthcare stocks like Merck & Co +3.3% and consumer staples Karft +1.9%. Energy stocks fell as crude oil tumbled 4% to $64.05 in its 4th straight session of losses.

DJIA +44.13pts (0.53%) at 8324.87

S&P +2.30pts (0.26%) at 898.72

Nasdaq -9.12pts (0.51%) at 1787.40

E-mini S&P daily chart

Market remains stuck in a range in a holiday shortened trading week coupled with non-farm payrolls data tonight. Despite a break of 925 to a high of 928.25, we did not see follow through buying and closed below resistance again. Market looks like its losing strength, but would prefer to be cautious and stay out for now.

E-mini S&P daily chart

Shorts were disappointed yesterday as market once again gained strength. Our shorts were stopped out at 906 and market rallied to 917.75 to close near day highs. Despite the rally, I do not think that we will be continuing the uptrend. Would suggest to watch for sign of weakness to sell again.

E-mini S&P daily chart

ES rallied to a high of 906.50, taking out our stop at 906 before closing lower. It seems to be getting difficult to ride on a trend these days due to the swings in the market. However, with the market closing at 898, it reflects the underlying market reluctance to bring itself higher. I would think we will continue lower from here to test 878 support, with further downside potential upon breaking. Suggest to sell again at current 898.00/898.25 level with stop at 907.

E-mini S&P daily chart

We ended flat yesterday which is a sign that market might recover some ground before comtinuing lower. As we have a stop at 906 level, would suggest to leave it in place and watch today’s action. Current support seen at 878.

E-mini S&P daily chart

ES made a final attempt to rally yesterday and traded to 919.25 before losing steam to close near day lows at 888.50. With a close below 900, looks the recent rally has formed a peak and we’re likely to see further downside from here. Continue to hold on to our shorts at 918.50 from a week ago and move stop from 925 to 906.

E-mini S&P daily chart

ES made an attempt to extend its gains on friday but failed and ended flat at 915.75. With the high at 923 (which missed our stop at 925), hopefully this resistance will form the second top before market continues lower. Maintain short positions.