TradeStalker's
R.B.I. Trader's Update
10 / 7 / 2008
(Published Since 1996)
...............................................
Dateline: 7:12 pm eastern time, 10/7/2008
In last night's update I stated:
"If the market opens higher, look to get short as
soon as the upside fizzles and begins to roll
over."
The market popped up on the open and reversed about 15
minutes into the trading day. Off of the 1078.00 high the SP
futures fell to 1049.25 by late morning. After a bounce to
1063.25 the market pulled back. The 1051-1050 area broke and
it then turned into resistance as the market began to tank
again. The 1040.00-1039.50 area was broken, and as stated
last night:
"...if that area isn't defended, then a move
towards the Monday lows, or lower, could be in the
cards."
A bounce back to the down-sloping 60 period ema at 1042.25
on the SP futures was rejected and the market dropped to new
multi-year lows at the close. The SP futures dipped under
1000 to 999.50 and then bounced 7 points to settle well
above fair value.
The free-fall continues, but a decent snap-back could occur
at any time now. The closing Trin was above 3.00, usually a
sign of exhaustion on the downside. In addition to that, my
3 day thrust oscillator closed below -.85 for the last 2
days and that's very compressed. Speaking of compressed, the
4 day volume ratio is down at a miniscule .13, which is as
low as it has been in 2 decades. The trends and momentum are
strong to the downside, but the market rallied almost 20
points on the SP futures before falling apart at the end of
the day on Monday. Also, the SP futures rallied over 50
points in just over an hour late Monday and a swing similar
to one of those could occur before the market decides to
turn back.
On Wednesday look for a buying opportunity if the SP futures
go under 1000.00 and then turn back up through that level in
the first 15 minutes of trading. If that is triggered, keep
any long position on a tight leash. If that plays out,
beware that the first decent bounce will likely set up a
shorting opportunity.
The initial resistance is at the 1020.50-1022.00 area on the
SP futures and the 1365.00-1366.50 area on the Nasdaq
futures. If those are reached and the market does not
reverse, then the downside momentum will have been dented.
The next, and likely a key hurdle is at the 1041.50-1042.00
area on the SP futures and the 1388.50-1390.25 area on the
Nasdaq futures. If the market gets back up there and the
move doesn't reverse, then the 1048.50-1049.50 area on the
SP futures and the 1398.75-1401.50 area on the Nasdaq
futures would be next. If those are broken and not quickly
reversed, then major resistance on Wednesday is at the
1062.00-1063.00 area on the SP futures and the 1414.00-
1415.00 area on the Nasdaq futures. Something extraordinary
would need to occur to see those areas.
The initial support is at the 1000.50-999.50 area on the SP
futures and the 1332.25-1330.50 area on the Nasdaq futures.
A move that reverses through those areas in the early going
would set up a good buying opportunity. If the market cannot
reverse, then the move could extend towards the 992.00-
991.50 area on the SP futures and the 1324.00-1322.50 area
on the Nasdaq futures. If those are broken, then the next
key support is around the 972.00-970.00 area on the SP500
cash. If the market gets hit hard again and that zone
doesn't hold, then the door is opened for a spill towards
the 950.50-949.50 area on the SP500 cash.
December 2008 SP futures resistance
symbols: emini = esz8 / big contract =spz8
1020.50-1022.00
1041.50-1042.00
1048.50-1049.50
1062.00-1063.00
December 2008 SP futures support
symbols: emini = esz8 / big contract =spz8
1000.50-999.50
992.00-991.50
972.00-970.00 {SP500 cash}
950.50-949.50 {SP500 cash}
December 2008 Nasdaq futures resistance
symbols: emini = nqz8 / big contract = ndz8
1365.00-1366.50
1388.50-1390.25
1398.75-1401.50
1414.00-1415.00
December 2008 Nasdaq futures support
symbols: emini = nqz8 / big contract = ndz8
1332.25-1330.50
1324.00-1322.50
December 2008 Dow futures resistance
symbols: emini = ymz8
9665-9675
9818-9822
9878-9884
9981-9988
December 2008 Dow futures support
symbols: emini = ymz8
9463-9457
9378-9373
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REMINDER:
Real Time subscribers can view these updates on
the web at this site:
http://www.tradestalker.com/members
---------------------------
Good Trading,
Mike Reed
Copyright (c) 2008 by TradeStalker.com, Ft Wayne, IN.
TradeStalker Updates may not be redistributed without
permission.
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PO Box 9783, Ft Wayne, IN, 46899
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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