Sunday, January 4, 2009

This Week's Trade 1/5

This week I am looking to see any signs of continuation of the low volume rally last week. Pivot point for Monday is at 918.75 on the ES futures. If we gap up above that in the morning then I would look to buy a retest and then look for pullbacks into the main trend of the day. It does feel like we wanna rally higher this week. We shall see what happens but I am gonna start the week with a slightly bullish bias. That pivot point is also the same level of which the month long consolidation broke out of on Friday so a retest of that now support is a good buy signal.

Of course we have ran up quickly and a pullback would not be surprising. However if we do get one I think it is still a good buy in the intermediate term. The move from last weeks low of 853 to the high of 932.75 has a 50% level of 893. If we do get down to that level I think its a buy. Below the 884 area and we will have to look at more short side trades.

Monday- Construction Spending, Auto and Truck Sales

Tuesday- Factory Orders, ISM Services

Thursday- Jobless Claims, Consumer Credit

Friday- Nonfarm Payrolls, Unemployment, Wholesale Inventories

Of course everyone will be waiting for the crucial jobs report Friday but bad news is already expected. Let's see how the price action reacts early this week to more volume back in the market and a fresh new year on the books. I think the path of least resistance is higher in the intermediate but don't be alarmed to see a pullback Monday and if it happens, look for buy signals on those retraces.

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