TradeStalker's
R.B.I. Trader's Update
7 / 24 / 2008
(Published Since 1996)
...............................................
Dateline: 7:31 pm eastern time, 7/24/2008
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After a flat open on Thursday, the market was hit with
selling. There was a very small bounce off of the 1277.50
level on the SP futures, but after getting to 1280.25
another wave of selling started. The drop took the SP
futures to just above the 1263.00-1262.25 key support zone,
and the SP futures made a little double bottom there.
However, the SP futures couldn't get over 1268 and hold, and
the selling continued in trend-down mode. The SP futures
dropped to 1257.75 and bounced, but the old 1263.50 support
turned into resistance on the bounce and the market sold off
into the close.
After getting turned down from just below the major 1292-
1293 resistance zone on Wednesday, there was bell-to bell
selling on Thursday with the highs made in the first 5
minutes and the lows made just before the close. The SP500
cash closed back under the 1260 level, which was pivotal
before the rally to 1291 this week.That same area looks to
be pivotal again on Friday.
IF the market is on the way to test the yearly lows, it will
likely set up a great buying opportunity. The internal
gauges will likely show bullish divergences, and that would
support a more sustainable rally back. That kind of set-up
could be what's needed to get a good bottom in place. On the
other side of the coin, the market could take off again from
down here and rally back to test the 1291-1292 area, or
possibly get to the low 1300's. IF that occurs, then we
could get the opposite type of set-up, and a string of -20
to -30 days on the SP500 could begin. We'll see how things
shape up as we near the end-of-month bias. For the time-
being, think "trading range" and look to get long on sharp
drops that stall/reverse (not the slow grinding action like
Thursday) and short on the quick run ups as soon as they
stall/reverse.
Look for early weakness to be bought on Friday. If that
plays out, then be ready to cover and short the first decent
bounce that fizzles. It will take a break, and hold, over
the initial resistance areas just to get into neutral
territory and begin a transition back to the upside. The
bounces will set up better odds shorting opportunities
unless/until those areas broken.
The initial resistance is at the 1263.25-1263.75 area on the
SP futures and 1841.75-1842.75 area on the Nasdaq futures.
If the market pops up there early on Friday and reverses,
then it's a good shorting opportunity. If those areas are
not a problem, then the 1268.50-1269.50 area on the SP
futures and 1848.25-1849.00 area on the Nasdaq futures would
be the next hurdles. If the market rallies back to those
areas and doesn't reverse, then the 1275.25-1276.25 area on
the SP futures and 1854.75-1856.00 area on the Nasdaq
futures would be the next resistance to get through. If the
market rallies back that far, and the move doesn't reverse,
then it would open the door for a rally towards the 1283.25-
1284.25 area on the SP futures.
The initial support is at the 1251.50-1251.00 area on the SP
futures and 1812.50-1811.50 area on the Nasdaq futures. If
those areas are not defended, then a move towards the
1246.00 level on the SP futures and 1804.00 level on the
Nasdaq futures is likely. A reversal could occur from near
those levels, but if that doesn't happen, then the 1242.00-
1241.00 area on the SP futures and 1798.50-1797.50 area on
the Nasdaq futures is the next key support. If the market
can not quickly turn around from a drop to those zones, then
it opens the door for a drop towards the 1235.50-1234.50
area on the SP futures and 1791.50-1790.50 area on the
Nasdaq futures. If the market drops to those areas, and
still can not turn, then the SP futures could drop another
10 points to the 1225.50-1224.50 zone.
September 2008 SP futures resistance
symbols: emini = esu8 / big contract =spu8
1263.25-1263.75
1268.50-1269.50
1275.25-1276.25
1283.25-1284.25
September 2008 SP futures support
symbols: emini = esu8 / big contract =spu8
1251.50-1251.00
1246.00
1242.00-1241.00
1235.50-1234.50
1225.50-1224.50
September 2008 Nasdaq futures resistance
symbols: emini = nqu8 / big contract = ndu8
1841.75-1842.75
1848.25-1849.00
1854.75-1856.00
September 2008 Nasdaq futures support
symbols: emini = nqu8 / big contract = ndu8
1812.50-1811.50
1804.00
1798.50-1797.50
1791.50-1790.50
September 2008 Dow futures resistance
symbols: emini = ymu8
11419-11422
11496-11501
11551-11556
September 2008 Dow futures support
symbols: emini = ymu8
11331-11326
11282
11245-11238
11194-11188
September 2008 Russell futures resistance
symbols: emini = er2u8 / big contract = er2u8
709.00-709.30
713.40-713.90
717.60-718.00
September 2008 Russell futures support
symbols: emini = er2u8 / big contract = er2u8
702.60-702.20
698.50
695.30-694.80
691.00-690.60
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---------------------------
Good Trading,
Mike Reed
Copyright (c) 2008 by TradeStalker.com, Ft Wayne, IN.
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Disclaimer
The financial markets are risky. Investing is risky.
Past performance does not guarantee future performance.
The foregoing has been prepared solely for informational
purposes and is not a solicitation, or an offer to buy
or sell any security. Opinions are based on historical
research and data believed reliable, but there is no
guarantee that future results will be profitable.
We are not advocating trading futures. The prices and
contracts in the TradeStalker Updates specify a manner
in which you could trade. We occasionally mention the
SP500 and Nasdaq futures markets because it is
extremely liquid and tends to lead the other markets.
This is not an endorsement or recommendation of the SP500
and Nasdaq futures markets. The risk of loss in futures
is substantial. You can lose more than your original
investment. We are not Registered Investment Advisors or
Commodity Trading Advisors.
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