Market Comment 5/01/06

Dateline: 7:36 pm Eastern Time, 5/1/2006


The market opened higher on Monday, and ran up to 1322.25 on
the SP futures and 1719.75 on the Nasdaq futures in the
first 15 minutes of trading. A quick dip and retest failed,
and the downside took hold. The SP futures held at 1316.50
while the Nasdaq futures stopped at 1709.50, and then the
market went into churn mode. Shortly after 3 pm, the SP
futures popped over 1320.00 and then reversed hard. The
afternoon ranges broke, and the market hit an air pocket, as
the market was hit with waves of selling into the closing
bell.

We have yet another failure at the 1322-1324 area on the SP
futures. The bounces should be countertrend affairs for now.
The futures settled with very small premiums, so an early
selloff that reverses could set up a trade on the long side
early on Tuesday. Aside from that occurring, shorting the
bounces then as soon as the upside stalls should offer very
good shorting opportunities - especially at a good
resistance zone.

Good Trading,
Mike Reed