Market Comment 02/05/07

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TradeStalker's
R.B.I. Trader's Update
02 / 05 / 2007
(Published Since 1996)
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Dateline: 5:54 pm Eastern time, 02/05/2007

The market opened lower on Monday, then popped back to the 1452.50 level on the SP futures and 1814.50 on the Nasdaq futures. That strength was sold and there was a washout to 1448.00 on the SP futures and 1798.25 on the Nasdaq futures. The market held and reversed fairly quickly and rallied back to test the highs before going into a little trading range. The 1810.50 level on the Nasdaq futures was the key end of day. At 2 pm, the SP futures quietly tested last Friday's high, while the Nasdaq futures reached 1810.75 and quickly reversed. That set the stage for some selling, on the Nasdaq anyhow, as the SP futures late move almost made a new high.

With this split market, the trading won't be so "easy". The Nasdaq needs to get through and hold over on a pullback that 1810.50 level to get in sync with any upside. That makes the Nasdaq futures a "short on the pops" unless /until that level is exceeded and held. The SP futures look much better,rallying to the 1454.00 high right before settlement. Trade only the best of setups on Tuesday until the market averages get in sync. Beware that, if the Monday afternoon lows are broken and the market doesn't snap right back, then a harder shakeout is likely.

Good Trading,
Mike Reed

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