Weekly Market Summary For Week Ending 11-18-05
BY AL MARTIN
Trading results for week ending Friday, November 18th
In Monday’s trade, we went L-4 CCZ 1327 S 1332, SS-5 OJF 121.50 C 121.00, SS-2 HGZ 191.50 C 190, SS-2 USZ 112.02 C 111.30, L CLZ 57.50 S 58.00, SS USZ 112.00 C 111.28, SS USZ 111.28 C 111.24, L CLZ 57.50 S 57.75, SS-2 HGZ 192.00 C 191.50, L KCZ 100.20 S 100.90, SS-2 HGZ 191.00 C 190.50.
In Tuesday’s trade, we went L-2 KCZ 100.20 S 100.55, SS-2 LBF 339.10 C 336.60, L-2 USZ 111.04 S 111.12, SS CLZ 58.25 C 58.00, L KCZ 95.80 S 96.80, SS-2 HGZ 193.00 C 192.50, SS-2 HGZ 194.00 C 193.50.
In Wednesday’s trade, we went L DXZ 92.07 S 92.27, SS-2 SIZ 8.02 C 7.97, SS-2 LBF 345 C 343.50, SS CLZ 58.25 C 58.00, SS-2 USZ 112.23 C 112.19, SS-2 HGZ 193.00 C 192.50, SS-2 LBF 345 C 343. 50, SS-5 OJF 122.50 C 122.00.
In Thursday’s trade, we went SS-2 USZ 112.18 C 112.14, SS-2 USZ 112.26 C 112.22, SS SIZ 8.12 C 8.07, SS SIZ 8.09 C 8.05.
In Friday’s trade, we went SS-2 LBF 355 C 353.70, L-2 USZ 112.16 S 112.20, SS-4 CTH 1430 C 1415, L-2 DLX 91.73 S 91.93, SS-2 DXZ 92.40 C 92.20, SS SIZ 8.15 C 8.10.
Total number of positions traded: 40
Total number of lots traded: 56
Aggregate gross profit (realized): $8,700.
Unrealized aggregate loss carryforward: $1,350.
LAST WEEKsaw the SPX trade in a 23-point regular session range, settling out the week at 1240, in a week dominated by a continuingly mixed economic calendar releases (ECR’s), marked by better than expected inflation, retail sales & business inventory data, yet weaker than expected housing, industrial & manufacturing output data, with market internals deteriorating slightly, week over week, despite late-week strength.
Market technicals continued to improve as the week progressed, with the SPX taking out, on a closing basis, with the 1247/49 light resistance shelf being tested in Friday’s trade, bringing the SPX current P/E to within 10% of the level wherein the SPX would be trading at twice its 50-year historical average.
This in an environment of falling Q4 GDP, rising interest rates, and a contraction in SPX earnings momentum, all occurring at a time when the markets are exiting a period of historical seasonal strength and entering an historically weak seasonal period, lasting to an average date of December 13th, caused us to post a second, yellow caution flag, as of the close Friday, thus changing our near term SPX technical outlook from ‘near term overbought-3’ to now ‘near term overbought-2,’ prompting us to short the SPZ at 1251, on Friday’s close.
For the coming week’s trade, all previous SPX resistance levels/zones up to 1245 now become support (as specified in the previous week’s Market Summary), with next upside resistance at 1250 (moderate), 1253/55 (light) and 1260 (heavy).
In last week’s Treasury trade, the USZ contract continued to rally, becoming near term overbought on Thursday’s regular session close above 113, prompting a profit-taking-led sell-off in Friday’s session, as the contract attempted to consolidate around the 112 ½ level. And we continue to like scalping the USZ contract from the long side on dips, and shorting on rallies at 113½.
In other market trading:
Friday’s surge in the CCZ & CCH contracts provided a shorting opportunity and, indeed, we continue to scalp the contract from the short side. With the OJF contract now falling back to the reality of its underlying supply/demand equation, we now like shorting rallies to 120, or better. We continue to trade the SBH from the short side on rallies to 12.12, or better, and we continue to short the LBF on rallies above 350. Also, we continue to scalp the DLZ contract from the long side on dips to 91.75, or lower, and from the short side on rallies to 92.35, or higher.
As always, subscribers are welcome to e-mail us at customercare@insiderintelligence.com for our trading outlook on all contracts, as we trade across the boards daily, and in all sessions.