Trade Guideline For Wednesday

Another sideways consolidation day on Tuesday. Traders are waiting to see if the FOMC will give any hint regarding QE3.

Key Level for Wednesday is 2640, with breakout level at 2650 and breakdown level at 2630.
-- Above breakout implies trending up, probably not until after the FOMC announcement at 2.15.
-- Below breakdown level (2630) implies down-trending move. Supports are 2620, 2595, 2570

Trade Guidelien For Tuesday

Monday was a sideways consolidation day, potential wave 4 retracement. If so, Tuesday should be a wave 5 rally targeting a break above Monday morning swing high. A continual decline or consolidation implies larger retracement targeting 2620, 2610 or 2595.

Key Level For Tuesday is 2635

-- Above 2635 implies the next up-leg, wave 5 is in progress, targeting a break above Monday's high.

-- Below 2635 implies continue consolidation/retracement

Upper VA = 2645.25
POC = 2637.25
Lower VA = 2632.125

European debt crisis Continues to Worsen

Trade Guideline For Monday

A trending up day on Friday with a close at the day high, shorts capitulated into the close. For Monday we could expect another uptrending day due to more short-covering if prices continues to push higher, or consolidation day with a sustained break below 2635.

Key Level for Monday is 2635.
Expecting bullish day above 2635, targeting 2680. Resistances levels are 2650, 2658, 2680, 2710
Consolidation day on a pullback below 2635. Supports are 2620, 2610, 2590-95

Eurozone Debt Crisis Continues

After Nov. 7, 2012, You’ll Want to Be Outside the USD

The currencies to own in particular are the Canadian, Singapore, Aussie or New Zealand dollars, and any of the Nordic trio – the Norwegian and Danish krone and the Swedish krone. The easiest way to accomplish this is through my buddies at Everbank. They offer certificates of deposit denominated in a variety of currencies, as well as CD baskets comprised of various currencies.

I would split my cash between a six-month Viking Basket (Norway, Denmark and Sweden) and a six-month Ultra Resource Basket CD (Aussie, New Zealand, Hong Kong, Singapore, Canada and Norway). You’re doubling up on your exposure to Norway, but given that is it the world’s strongest and best-managed currency, I don’t see the added exposure as a problem.

You’re going to pick up some yield on these CDs – 0.21% annualized on the Viking Basket and 0.64% on the Ultra Resource Basket. The bigger gains will come from the rising value of those currencies as the U.S. dollar struggles later this year.

USD Index From 1973 to date

Link to the article: http://sovereign-investor.com/2012/07/24/american-economy-headed-to-fiscal-cliff/

Trade Guideline For Friday

NQ opened gap-up and pushed upward into 2595 resistance, then decline down to 2560 support. It is now back inside prior trading range 2550 - 2595. Breaking out of the range implies trending move in the direction of the break.

Breaking above 2595 target 2630- 2660. Resistance levels are 2620, 2630, 2550, 2560

Breaking below 2650 target 2530 -  2500. Supports are 2540, 2520, 2500.

Upper VA = 2586

POC = 2578

LVA = 2570

Trade Guideline For Thursday

A sideways consolidation day on Wednesday, with the close in the middle of the day range (upper range 2560, lower range = 2528).

For Thursday, staying inside the range implies more consolidation. Breaking out of the range, then staying out of the range implies a trending move in the direction of the break.

Upper VA = 2555.75
POC = 2544.75
Lower VA = 2538.75

Trade Guideline For Wednesday

On Tuesday NQ opened near key resistance and then decline all day, down to key support. NQ has broken below key support after the close, subsequent to the release of Apple's earning reports. 

Key support for Wednesday is 2545.

• A sustained break below 2545 after the open on Wednesday can trigger a liquidation decline. Support levels below 2545 are 2537, 2517, 2505, 2465, 2440
• Above 2545 implies more consolidation with first resistance at 2585-290

Spain's bankruptcy is now a certainty, and imminent.

Trade Guideline For Tuesday

NQ opened gap-down below multiple support levels on Monday, then ran down for 20 minutes, down to 2545 Point-of-Control support before stalling and reversing back up to broken-support-turned resistance 2590 before it stalled.

For Tuesday we can expect consolidation with trading range between 2545 support and 2590 resistance, unless price can breakout and stay out above key resistance or break down and stay down below key support level.

Key Resistance = 2590. Resistance levels above 2590 are 2610, 2620, 2630

Price breaking above key resistance has the potential to trigger a short-covering rally, targeting 2610 - 2620. 

Key Support = 2545. 

Breaking below 2545 support can cause another round of liquidation decline. Support levels below 2545 are 2537, 2517, 2505.

NQ daily chart

Trade Guideline For Monday

A gap-down and trend down day on Friday, with a close at the low of the day.

Key Level on NQ for Monday is 2625.

-- Downtrend should continue below 2625, target down is 2585, and lower if market internals is extreme. Supports on the way down are 2610, 2600, 2590, 2585, 2575.

-- Consolidation above 2625, target is 2645-2650

European Debt Crisis Continues to Get Worse

Trade Guideline For Friday

A large gap-up opening on Thursday trapped the shorts, triggered short-covering rally to resistance zone 2655-2660, double-top level with July 5th swing high. Whether or not it is going to breakout above the double top, will depends on where it opens and trade on Friday.

Key breakout level on Friday is 2655.

- Above 2655 implies it is going for another trending up day as shorts may be forced to cover, triggering another short-covering rally. Resistances are at 2685, 2710

- Below 2655 implies NQ is in a pullback/consolidation mode with support zone at 2625, 2610

Spanish bond yield at record high, breaking above critical level implies imminent bankruptcy (short-term chart July 2012) Charts from Zero Hedge)

Medium-term chart (march 2010 to July 2012)

Long-term chart (1993 - 2012)

Trade Guideline For Thursday

A typical breakout and trend-up day on Wednesday with a close near the day high. The trend-up should continue to the next resistance level, 2655 -  2660 area as long as it can stay above 2625. Below 2625 implies it it is going into consolidation with support at 2600, 2590, 2585.

IMF warned the eurozone is in critical danger, urging the European Central bank to turn on the printing press. QE is bullish for the equity market.

Trade Guideline For Wednesday

NQ opened gap-up above 2585 resistance but failed to ignite any short-covering, and quickly reversed down, breaking through the value area and dropped all the way down to 2550 support before stalling and reversing back up, breaking above the morning high before pulling back down on end of day profit-taking.

For Wednesday, Key Level is still 2575.
- Resistance Levels =  2600, 2625
- Support Levels =  2560, 2550.

-- Bullish above 2575, but may need to clearly break above 2600 resistance to ignite a sustained short-covering rally targeting 2625 resistance.
-- Bearish below 2575, decline targets are 2560 and 2550

Value Area High (NQ) = 2592.50

Point-Of-Control = 2584.50

Value Area Low = 2569.50

On Tuesday Moody's downgraded 13 Italian Banks.

Trade Guideline For Tuesday

Market traded sideways on  Thursday trading in a narrow-range inside the value area, between the upper and lower value area.

For Tuesday a breakout above 2585 resistance, if it can stay above, could trigger a short-covering rally, targeting 2625. On a really strong short-covering rally, next resistance above 2625 is 2655.

Key Level For Tuesday is 2575, Bullish above, Bearish below.
Resistance are 2585, 2590, 2600, 2625, 2655
Supports are 2570, 2560, 2550

Value Area High = 2580.25
Point-of-Control = 2571.25
Value Area Low = 2569.25

Trade Guideline For Monday

Nasdaq gap-up and trend up all day on Friday, fueled by short-covering, was able to break through through 2560 and 2570 resistance before stalling at 2585 resistance..

For Monday, Key S/R level is 2575, 

- Bullish above 2575, with resistance at 2585, 2590, 2595 and 2600

- Bearish and in a pullback mode below 2575, with supports at 2570, 2560 and 2550.

NQ Upper Value Area  = 2584
NQ Point-of-Control = 2574
NQ Lower Value Area = 2563

Trade Guideline for Friday

On Thursday, NQ opened gap-down and trend down in the morning, down to POC (support) from June 28, and then reversed all the way back up to resistance zone. For Friday, expecting consolidation as long as it can stay above key level.

Key Level for Friday is 2525.

--> Above 2525 implies consolidation with resistance at 2550, 2560, 2570

--> Below 2525 is bearish, downside target is a re-test of Thursday swing low. Double -bottom support is 2500.

Upper VA = 2548.50

POC         = 2541.50

Lower VA = 2530.50

Trade Guideline For Thursday

NQ continued to trend down most of the day on Wednesday and finally reversed late in the afternoon. For Thursday, as long as it can stay above key level 2555, it is in consolidation mode, with 2570 are resistance. 

A sustained break above 2570 can trigger a short-covering rally, with resistance at 2585, 2590, 2600.

Below 2555 implies a re-test of Wednesday low, target a higher low or a slight lower low. However, a sustained break below Wednesday low can trigger liquidation drop with downside target at 2500.

Upper VA = 2575.50

POC = 2563.50

Lower VA = 2556.50

Trade Guideline For Wednesday

Nasdaq gap-up and ran-up into 1625 resistance on Tuesday, then quickly reversed, trending down all day long, closing near the day low. For Wednesday, I will be looking for NQ to continue to trend down, unless it can trade above key level.

Key Level For NQ on Wednesday is 2585.
-> Below 2585 implies the fast downtrend is still in progress, with support at 2570 then 2560. Supports below 2560 are 2520 and 2500.
-> Above 2585 implies it is in consolidation mode, targeting 2600 (resistance)

POC = 2595.50, VAH = 2598.50, VAL = 2569.50


S&P 500 Current Snapshot

Trade Guideline For Tuesday

Market consolidated inside a narrow trading range all day on Monday. It could continue to consolidate on Tuesday unless it can break below key support, 2595 for NQ.

ES VAH = 1346.50 NQ VAH = 2604

ES POC = 1344.50 NQ POC = 2601

ESA VAL = 1342 NQ VAL = 2594

Key Level For NQ on Tuesday is 2595.

• Above 2595 implies it is still in consolidation mode with resistance at 2610 and 2625.
• Below 2595 implies a potential fast trend down to support zone 2560-2570. However, on a strong momentum move, it could go lower breaking support.

Trade Guideline For Monday

Friday was a large gap-down and trend-down day with some profit-taking rally to end the day. Monday is likely a consolidation day trading between 2625 resistance and 2595 support (2595 - 2625 trading range). However, a sustained break out of the range could trigger a fast trending move in the direction of the break.

ES POC = 1344.75, Upper VA = 1349.75, Lower VA = 1344.25
NQ POC = 2598.00, Upper VA = 2611, Lower VA = 2593

Key Level For NQ is 2600.

--->> Bullish above 2600, the first upside target is 2625.

--->> Bearish below 2600, downside target is 2590, but a sustained break below 2590 could cause a liquidation drop to 2560.

There was not much buying in the market in response to the ECB and China's interest rate cut. It probably need a massive quantitative easing to produce a major rally. Quantitative easing or not, the crisis  in Europe and the US should continue to get worse and there is absolutely nothing the Fed or the ECB can do at this stage of the game to avert the catastrophe. 

For Friday, key level for NQ is 2650

• Above 2550 implies NQ is on it next upleg, targeting a break above Thursday's swing high.
• Below 2550 implies it is going into a consolidation/pullback mode, first target down is 2635, then 2620.

Interest rate cut

Trade Guideline For Thursday

Market rallied right from the open on shortened trading day on Tuesday. 

Key Level for Thursday is 2635 on NQ and 1367 on ES.

• Above 2635 NQ implies uptrend is still in progress, next upside target is 2675, and much more if market internals is extreme.
• Below 2635 implies NQ is in a pullback mode, first target down is 2620 prior breakout level now support. Next support below is 2610.
• Below 2610 implies NQ is in trend reversal mode, targeting a break below 2600.

Barclay Bank Libor manipulation probe should continue to dominate the financial news.

Trade Guideline For Tuesday

Tuesday is most likely a slow choppy day ahead of July the 4th holiday in the US as most traders would be on holiday or in holiday mood. Once in a while we would get exaggerated trending move up or down due to low volume.

Key levl For NQ on Tuesday is 2610

• Bullish above
• Bearish below

Trade Guideline For Monday

Central Banks buying binge (by the ECB, the Fed and the bank of England) ahead of more quantitative easing, triggered short-covering rally that helped pushed stock markets up.

Whether Friday's massive rally could continue this coming week, only time will tell, as the US market will be close on Wednesday for the July 4th holiday, and many traders will be out of their office. If so, we may see some false breakout.

For Monday, Key level for NQ is 2600.

• Bullish above 2600, could lead to breakout above key resistance 2628. A sustained break above 2628 could trigger fast short-covering rally.
• Below 2600 implies NQ is going into consolidation, declining 2570support zone.

ES breakout level is 1357. A sustained break could trigger as fast short-covering rally.

European Debt Crisis