S&P 500 Index Analysis

Wittgenstein,

Thank you for your suggested calendar. I have already bookmarked it.

Overseas economic statistics will have more bearing on the overnight session than on the pit session for the S&P 500 Futures contracts. Also, I hardly have any conviction on any of the foreign economic conditions to provide an analysis, and a writing along the line that "the German ZEW Economic Sentiment will have an effect on the market" will not be of value to anyone. Thanks.

Dr. Chen
 
Price is the master.............judge it by fundamental or technical ways.

Lots of money has been made by taking fundamental macro based bets on commodities, currencies, sectors etc. ex: jim rogers, soros and several others.

Have not heard (probably due to my limited exposure) that folks have made tons of greenbucks trading fundamental on intraday or short term basis.

Any names on traders using FA to give good returns?

I bet on ET, 90% of the traders are technical oriented. :D :cool:
 
toc,

Thank you for your question. Based on my limited knowledge I am not aware of such traders who use fundamental analysis to profit from short-term trading.

Dr. Chen
 
Sept. 13, 2010

Analysis:

Friday's Analysis predicted that "the market clearly has turned bullish," and the market did, closing 12.35 points higher on the backdrop of a robust growth in industrial production in China. Looking ahead to tomorrow, the market will continue its upward momentum to find and test a resistance in the absence of negative surprises in retail sales and business inventories.

Strategy:

Sell short at 1,124
 
Sept. 14, 2010

Analysis:

Yesterday's Analysis predicted that "the market will continue its upward momentum to find and test a resistance in the absence of negative surprises in retail sales and business inventories." Today there were no negative surprises in retail sales and business inventories, and the market spent most the day higher before closing a fraction of a point lower. Looking ahead to tomorrow, the Empire State Manufacturing Survey will come in line with consensus or be better, and the Industrial Production will surprise on the upside by a significant margin. The market will open higher to test the resistance but fail to take it out.

Strategy:

Sell short at 1,125
 
intl_spain_bullfight.gif
 
Sept. 15, 2010

Analysis:

Today both the Empire State Survey and the Industrial Production came in line with consensus, and the market rode on its momentum to close higher. Looking ahead to tomorrow, the Initial Jobless Claims will surprise on the higher side to above 460,000, as they make up for the missed claims last week. The Philadelphia Fed Survey will bring no positive surprise. This will give the market the reason to take profit and close lower.

Strategy:

Sell short at 1,123
 
Sept. 16, 2010

Analysis:

Yesterday's Analysis predicted that "the Philadelphia Fed Survey will bring no positive surprise. This will give the market the reason to take profit and close lower." Today the Survey came in negative, and the market spent most of the day in the negative territory and closed a fraction of a point lower. Looking ahead to tomorrow, the Consumer Sentiment is difficult to predict because the depressed home prices may continue to outweigh the improvement in employment outlook. The CPI excluding food and energy will be flat or negative, as retailers lured shoppers into spending with large discounts. The concern on the economy will give the market that fails to break resistance a reason to drop to as low as 1,110.

Strategy:

Sold short at 1,122
 
Sept. 17, 2010

Analysis:

On Sept. 11 I responded to Wittgenstein that "overseas economic statistics will have more bearing on the overnight session than on the pit session for the S&P 500 Futures contracts." The futures contract rose to as high as 1,132 overnight but did not trade even near this level during pit trading.

Yesterday's Analysis predicted that "the depressed home prices may continue to outweigh the improvement in employment outlook," and that "the CPI excluding food and energy will be flat or negative, as retailers lured shoppers into spending with large discounts." Today the Consumer Sentiment came in worse than the most pessimistic forecast, and the CPI excluding food and energy was flat in Aug.

Looking ahead to next week, the market will be fixated to the Fed's announcement on Tue., and the Fed will remind the market of the precarious economic condition with a language that is sterner than its Aug. announcement. But it is the Master itself that is also in a precarious situation because if it does not undertake QE2 (not your majesty's cruise ship) on Tue., it will be odd for it to act after the next meeting on the day after mid-term election. The PIGS saga will continue out of Europe and weigh on US financial stocks. Given the fact that the S&P 500 rally has been led by technology stocks, when the Nasdaq 100 takes a respite after rising for eight straight days, the S&P 500 may as well follow suit on Monday.

Strategy:

Hold short at 1,122
 
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