TradeStalker's
R.B.I. Trader's Update
02 / 04 / 2007
(Published Since 1996)
...............................................Dateline: 5:59 pm Eastern time, 02/04/2007
The SP futures traded in the narrowest range since November21, 2006 on Friday. The volatility contraction tends to precede large range days, so we should begin the week with some bigger moves. The market is still overbought and sentiment is getting a bit too frothy. In addition, a narrow range day at fresh high ground has led to some hard sell-offs in the past. So, a bit of caution is warranted on the long side up here.
Since the post Fed rally started last Wednesday, the dips have been small and infrequent. The two biggest pullbacks on the SP futures were 5.25 points on Thursday and 4.25 points on Friday. If the Friday high at 1454.00 is not exceeded,then a drop of 5.25 points would make a retest of the Friday low. That test would need to hold, otherwise things could be changing short term.
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Good Trading,
Mike Reed
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