Weekly Market Summary For Week Ending 7-28-06
By Al Martin

On the week, Jul 24-28, 2006, we traded a total of 48 positions, comprising 147 lots, generating an aggregate gross profit of $17,187.50; median margin commitment: $27,630; aggregate gross loss/profit carryforward: -$1,905.

SPX: The index moved irregularly higher throughout the week, breaching, on a closing basis, the 1253/55, 1262.50/65 & 1272.50/75 resistance levels, with key long-side scalps coming in Monday’s breach of the 1253/55 resistance shelf and Friday’s mid-session breach of the 1272.50/75 resistance zone, being turned back pennies shy of the 1280 major resistance level, generating a sell-on close of weekly long positions, a signal reinforced by the week’s generally weaker ECR’s & poor performance in the 2-to-5-year Treasuries.

Watch the coming week’s heavy ECR schedule for trading points. Technicals suggesting a failure to breach the 1280 resistance level on a closing basis, by Tuesday’s trade, would generate a shorting signal, which would remain good up to the 1284/86 light resistance shelf, and conversely be reinforced on a close below 1272.50.

Active ‘spoon’ day-traders should e-mail, for our up-to-the-minute updates.

USU: The contract remained firm, consistently holding pullbacks to 107½ on a closing basis, with Wednesday’s 107.07 intra-day low largely relieving the near-term overbought technical condition, allowing the contract to move higher on the back of weaker ECR’s, wherein the contract became overbought above 108¼ in Friday’s trade, affording a series of low-risk short-scalps for day traders.

The contract is rich at current levels, and will need consistent ECR weakness to hold, with a failure to close above 108.17 representing a short-selling signal in early next-week trade.

DXU: Excellent short-scalping action in late-week trade, as the USU contract rallied. However, the contract, basis Friday’s 85.19 close, is now near-term oversold, and in need of a bounce back to 85.50/60 to relieve the oversold condition.

SIU: Good 2-way scalping action, as the contract, once again, attempted to rally in late-week trade, and, once again, was met by resistance above 11.40. Continue to short-scalp failed rallies in the 11.40/60 zone until the 11.62 level is breached on a closing basis.

WU: After trading tired above 4.00 in the prior week’s trade, the contract generated a fresh shorting signal in Tuesday’s trade, suggesting a test of the 3.82/84 support level, which was achieved in late-week trade, making the contract vulnerable for a test of 3.76, unless it can close above 3.9275/9375 in early coming week’s trade.

CTZ: The contract moved higher, trading above 56.00 in mid-to-late-week trade, for the first time in 13 weeks. However, contract fundamentals continued to deteriorate, and we will continue to scalp rallies from the short side, unless 56.50 holds on a closing basis.

LBU: Good 2-way scalping action in the 272-282 zone, with a rally failure to 282.20, yet with the 271.40 bottom holding, for the second week. Continue to trade the zone as above, until the 271.40 or 282.20 levels are taken out on a closing basis, with next support at 269.30 & 265.40 & resistance at 288.30.

SBV: Good shorting action, with a late-week breach of the 15.00 support level, leading to a test of next support at 1470/75, which, if broken, would signal a further decline to 14.48/53 or, if held, a likely rally back to 15.20.

KCU: The ‘trade shills’ mounted yet another rally effort, in late-week trade, failing just shy of the 1.00 level. We continue to like shorting this contract at current levels, or above, cognizant of the ever-increasing bearishness of its fundamentals.

CCU: Continued consolidation trade in the 1480-1510 zone, leading to consistent 2-way 10-point scalps, with volume vs. price action signaling a likely rally back to 1520/30.

OJU: The contract reached a new 1.7080 intra-day high in Friday’s trade, before falling back, once again, as the contract continues to fail at the 1.70 level on a closing basis. Continue to scalp the contract from the short side on rallies above 1.7020, until such time as a close above 1.70 is established.

CLU: The contract continued to move irregularly lower, after the counter-rally effort failed at 75.00, presenting a series of short-scalps down to the 73.50 support level, which was finally breached on a closing basis in end-of-week trade, suggesting a further decline to the 72.60 area, which, if breached on a closing basis, would signal yet a further test to the 71.30/50 zone.

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