TradeStalker's
R.B.I. Trader's Update
10 / 8 / 2008
(Published Since 1996)
...............................................
Dateline: 6:55 pm eastern time, 10/8/2008
The market gapped down on Wednesday and right in the 972-970
major support area on the SP futures cash and futures and
the market instantly turned back up. The SP futures rallied
from 971.00 to 1025.75 in about 30 minutes, and as soon as
the move stalled and reversed the selling came back in. We
were expecting the first decent rally to fail, and it led to
a drop to test the opening lows shortly after noon. The
SP500 cash made its low at 970.98 and the market turned back
up. The rally fizzled and reversed off of 1027.25 on the SP
futures, and then a pullback held above the updated support.
Another bounce to a slightly lower high was reversed,
setting up a 1-2-3 topping pattern. Once the 1006 level was
broken the selling snowballed as the SP futures dropped 46
points in the last 30 minutes of trading.
The market looked pretty good until the last 2 hours of
trading on Wednesday. The SP futures didn't have enough
strength to hold its gains, and when the selling started it
was relentless again. Now the market has a key resistance
that's well defined at the 1026-1027 area on the SP futures.
If the Wednesday lows are not broken, and the SP futures can
close over 1027 on Thursday, then a bottom has a chance of
being in place. That will take some work as the bounces
still are not able to stick.
The way the market acted by dropping 47 points on the SP
futures and 94.25 points on the Nasdaq futures to end the
day, the downside momentum is so strong that we may see a
few more days like this. The possibility of a low on Friday
or Monday could still be in the cards. On Thursday, if there
is early weakness, it must reverse in the first 15-20
minutes to get something going on the upside. If that
doesn't occur, then another sizable drop could be in the
cards before a turn around attempt occurs.
The initial resistance is at the 1007.00-1008.00 area on the
SP futures and the 1360.50-1361.75 area on the Nasdaq
futures. If the market gets up there and the move stalls
out, it sets up a great shorting opportunity. If the market
gets through those areas and the move doesn't quickly
reverse, then the key resistance is at the 1026.00-1027.25
area on the SP futures and the 1391.00-1393.25 area on the
Nasdaq futures. If the market puts together a good enough
rally to clear those areas and the move isn't reversed once
again, then we could continue to run up towards the 1037.50-
1038.50 area on the SP futures and the 1401.00-1402.75 area
on the Nasdaq futures.
The initial support is at the 972.00-970.00 area on the SP
futures and the 1308.50-1306.50 area on the Nasdaq futures.
If those areas are not defended, then we could easily drop
towards the 960.50-959.50 area on the SP futures and the
1284.00-1281.50 area on the Nasdaq futures. If those are
reached and the market cannot quickly reverse, then finding
good support becomes a bit difficult. The next logical area
would be at the 950.50-949.50 area on the SP futures and the
1272.50-1270.50 area on the Nasdaq futures. If those do not
hold, then it looks like the 939.00-938.00 area on the SP
futures and the 1260.00-1258.50 area on the Nasdaq futures
would be "must hold" areas. If those do not hold, then
another big down day is in the works. It's hard for a market
to crash out of the basement, but this market could do just
that if those support areas are not held.
December 2008 SP futures resistance
symbols: emini = esz8 / big contract =spz8
1007.00-1008.00
1026.00-1027.25
1037.50-1038.50
December 2008 SP futures support
symbols: emini = esz8 / big contract =spz8
972.00-970.00
960.50-959.50
950.50-949.50
939.00-938.00
December 2008 Nasdaq futures resistance
symbols: emini = nqz8 / big contract = ndz8
1360.50-1361.75
1391.00-1393.25
1401.00-1402.75
December 2008 Nasdaq futures support
symbols: emini = nqz8 / big contract = ndz8
1308.50-1306.50
1284.00-1281.50
1272.50-1270.50
1260.00-1258.50
December 2008 Dow futures resistance
symbols: emini = ymz8
9460-9468
9637-9645
9879-9885
December 2008 Dow futures support
symbols: emini = ymz8
9122-9114
9038-9031
8904-8897
8838-8831
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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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