TradeStalker's
R.B.I. Trader's Update
10 / 12 / 2008
(Published Since 1996)
...............................................
Dateline: 6:01 pm eastern time, 10/12/2008
Friday was a wild end to a wild week. The week started with
a gap down open, and the downside snowballed into Friday
morning. The market gapped down 41.50 points on the SP
futures and they reversed and sprinted to 922.00 in the
first 40 minutes of trading. The move fizzled and it was
basically a trend down move until testing the opening lows.
The Nasdaq futures made a slightly lower low while the SP
and Dow futures made higher highs and the market turned up.
It struggled to get going until 2pm, and then market headed
higher. The buying fed on itself and a 100 point rally on
the SP futures barely poked over the initial resistance
before reversing. The last move was a pullback of 55 points
as the futures sold off to settle well below fair value.
Last Sunday night I stated that a drop into the October 10-
11 timeframe that turned up could mark a good low for some
time. The market had 2 chances to make a good bottom on
Friday, and both of the moves failed. Given the huge
downside momentum of late, it will take a bit of work to
turn things around. The action on Friday was a start. Now
the bulls need to defend the Friday lows, and then close
over the 930 level on the SP500 cash. It will likely take
some work.
Things should tame down a bit on Monday. I doubt we will see
the huge ranges that were made on Friday. The ES had a
106.00 point range, while the NQ had a 126.75 point range
and the YM had a 1030 point range. That was on the heels of
a 104.25 point range for the ES on Thursday. And that's just
the last 2 days.
A 7-10% move in a month is normally considered a huge move.
Not this year. It was just a few years ago when we felt the
market would never have big moves again. From August 23,
2006 to February 26, 2007, the 10 day average range stayed
between 7 and 9 points except for one small increase to a 12
point average. The average intraday range during that
timeframe was less than 1%. The average range (intraday high
to intraday low) over the past 3 days for the SP futures has
been 9.8%, and over the last 10 days the average range is
7.5%. On Friday, the rally from the 839.80 low to the 936.36
high was an 11.5% move. My have things changed.
On Monday look for early strength to set up a shorting
opportunity as soon as the move stalls/reverses. If that
plays out, the first decent pullback should set up a buying
opportunity if the 884.00-883.00 area on the SP futures can
hold. If it doesn't, then a test of the Friday lows could be
in the cards.
The initial resistance is at the 942.00-943.00 area on the
SP futures and 1322.50-1325.00 area on the Nasdaq futures.
If those are exceeded and not quickly reversed, then there
should be resistance near the 954.00-955.00 area on the SP
futures and 1338.50-1340.00 area on the Nasdaq futures. If
the market has a good rally then the 961.00-963.50 area on
the SP futures and 1346.50-1348.00 area on the Nasdaq
futures would be next. If the market gets up there, and
doesn't reverse, then it wouldn't be impossible to get to
the 988.50-991.00 area on the SP futures and 1362.50-1365.00
area on the Nasdaq futures. If that happens, and the move
doesn't reverse up near those areas, then the major
resistance is at the 1010.50-1012.50 area on the SP futures
and 1373.00-1375.00 area on the Nasdaq futures.
The initial support is at the 884.00-883.00 area on the SP
futures and 1251.00-1249.50 area on the Nasdaq futures. If
those are not held then the door is opened for a drop
towards the 875.50-874.50 area on the SP futures and
1240.00-1238.50 area on the Nasdaq futures. If those are
broken, and the market doesn't quickly reverse, then only
the 844.00 level on the SP futures and 1204.00 level on the
Nasdaq futures can keep the market from testing the Friday
lows at the 840.00-838.50 area on the SP futures and
1199.00-1198.25 area on the Nasdaq futures. If those do not
hold, or quickly reverse if they are broken, then a test of
the 772-768 area on the SP500 cash could be seen before
another reversal similar to Friday's reversal.
December 2008 SP futures resistance
symbols: emini = esz8 / big contract =spz8
942.00-943.00
954.00-955.00
961.00-963.50
988.50-991.00
1009.50-1010.50
December 2008 SP futures support
symbols: emini = esz8 / big contract =spz8
884.00-883.00
875.50-874.50
844.00
840.00-838.50
December 2008 Nasdaq futures resistance
symbols: emini = nqz8 / big contract = ndz8
1322.50-1325.00
1338.50-1340.00
1346.50-1348.00
1362.50-1365.00
1373.00-1375.00
December 2008 Nasdaq futures support
symbols: emini = nqz8 / big contract = ndz8
1251.00-1249.50
1240.00-1238.50
1204
1199.00-1198.25
December 2008 Dow futures resistance
symbols: emini = ymz8
8900-8908
8967-8973
9090-9103
9263-9275
9468-9476
December 2008 Dow futures support
symbols: emini = ymz8
8390-8384
8360-8354
7976
7892-7878
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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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