Weekly Market Summary For Week Ending May 26, 2006
BY AL MARTIN
Weekly summary (May 22-26, 2006) of trade action:
We traded a total of 76 positions, comprising 117 lots, generating aggregate gross profit of $23,040.
Median margin commitment: $24,630
Capital gain/loss carryforward: +$1,325
SPX: With the next downside support at 1253/55 being tested and held in midweek trade, a typical reduced-volume short-covering-led rally ensued, bolstered by light-volume ‘spec buying’ on the floor and scattered rounds of technical & odd-lot retail-sucker buying, prompting a late-week rally back to the 1280 previous support, now resistance, level on Friday’s close, with ‘poor-fair’ market internals. With the 1284/86 & 1292/3 next upside, now resistance, levels blooming, expect any further advance to meet stiffer headwinds, as it were, with the most likely upside target being the 1292/3 area, a rally up to which would constitute a 50% retracement of the recent move. Watch the coming week’s ECR’s for trading points, with Wednesday’s FOMC minutes & Friday’s employment report being the 2 weightiest releases of the week.
USM: Continued good 2-way scalping action, buying on dips back to 106.24 or less, and shorting rallies above 107.04, as recent strength was hampered by Thursday’s poor 5-year T-note auction & stronger than expected housing data. However, the contract continues to remain well-bid on dips, and we continue to like scalping from the long side on dips to 106.28 or lower. As with the equities, watch the coming week’s ECR’s for trading points.
DXM: Lovely short-side scalping opportunities abounded, shorting rallies to 85.10 or better, and covering on dips back to 84.80 or less, as bid strength and volume consistently likened above 85.00, and we still like scalping the contract from the short side on rallies to 85.30 or better.
SIN: Continued good 2-way scalping action, shorting around 13.10, early-week, scaling down to the 12.75 level by week’s end, as the contract finally found support in the 12.50 area. We continue to like scalping the contract on rallies, with our next downside target being 12.00.
HGN: Continued wild action on both sides of the market, as the contract staged a 50-cent intra-day low/high rally on the week, and we continue to like shorting rallies to 3.80 or better. However, trading this contract is not for the faint of heart!
WN: Superb 2-way scalping action continued, shorting the contract at 4.18 or better, covering on 5-to-10-cent dips, and buying the contract under 4.10, for the reverse long-side scalp. Continue to trade this contract as referenced above.
CTN: Superb 2-way scalping action continued, buying on dips back to 50.10/30 & shorting rallies at 51.30 or better, as the contract held the psychologically important 50.00 level for the 2nd consecutive week. Look to scalp the contract from the short side on rallies to 51.15-35.
LBN: Superb shorting action, as the contract failed to reach the 318.30 previous support, now resistance, level, on counter-rally efforts, falling back to breach the 311.15 & 308.30 support levels, with next downside support seen in the 303.20-305.40 zone. Continue to short rallies, unless the 312 level is re-breached on a closing basis.
SBN: Superb shorting action, as the 16.50/55 previous support, now resistance, zone, failed to hold on counter-rally efforts, causing the contract to finally breach the important 16.20 support level & the psychologically important 16.00 level by week’s end. Look to short failed rallies back into the 16.20/30 zone.
KCN: As we had predicted in our previous weekly summary, the $1.00 support level finally gave way, in late-week trade, leading to a series of tasty 50-100 basis-point short scalps. Continue to scalp the contract on rallies, to 98.50 or better, unless or until such time as the 1.0240 level is re-breached on a closing basis, with next downside support seen in the 96.80-97.50 zone, followed by the 93.20-94.40 secondary support zone.
CCN: Tasty shorting opportunities abounded throughout the week, when, as we had suggested in our previous week’s summary, the contract fell below the 1498-1506 support zone, further penetrating the 1475 support level, setting up a test of the larger 1450-55 support zone. Continue to scalp rallies from the short side, unless or until such time as the 1483 level is re-breached on a closing basis.
OJN: Superb long-side scalping opportunities abounded, as the contract continues to hold the 1.50 area on dips, and, once again, continues to accelerate to the upside above 1.5340. The contract continues to remain well-bid on dips. Continue to scalp from the long side on pullbacks to 1.5590 or less.
CLN: The contract remains mostly range-bound between $70-72, showing consistent shorting opportunities on rallies to 71.30 or better, with long-side scalps on pullbacks to 70.50 or less. Continue to trade the range, as referenced above, unless or until such time as the range is broken on a closing basis.
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