TradeStalker's
R.B.I. Trader's Update
10 / 19 / 2008
(Published Since 1996)
...............................................
Dateline: 5:49 pm eastern time, 10/19/2008
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Friday started with another big down open and that quickly
reversed to the upside. The SP futures got legs and rallied
all the way to 987.75 by early afternoon. The market pulled
back and then the SP futures bounced from 974.75 to 983.25
and the bounce fizzled. Turning down from the lower high set
up a 1-2-3 top and the market started its selloff. There was
a bounce from just under the 955-954 support, but it failed
and the market trended lower, reaching 932.25 just before
the close.
It looks like the market is going range-bound for a bit. The
indicators are mostly neutral, but the VIX says to expect
more volatility. So, if we are going to get good swings in
both directions, then look for trades on both sides. If the
market runs up to test the Friday highs, the move would set
up a good shorting opportunity as soon as the market shows
signs of a turn around. On the downside, a sharp drop that
can hold and turn up from around the 892.75-891.25 area on
the SP futures should set up a good buying opportunity. For
now the short side on bounces looks like the better odds
setup.
Last week was full of big moves coming before stocks open.
Last week the SP futures had opens of +52.00 points on
Monday, +34.30 on points Tuesday, -23.80 points on
Wednesday, +12.20 points on Thursday and -19.50 points on
Friday. In any case, if the volatility keeps up, another big
open isn't impossible. We'll see if there is another big
open on Monday. It will likely make a good "fade" if the
reversal occurs in the first 15 minutes or so.
The initial resistance is at the 957.75-959.25 area on the
SP futures and the 1332.00-1333.00 area on the Nasdaq
futures. The trends are down and bounces are shorting
opportunities unless those areas are cleared and not quickly
reversed. If they get up there and do not reverse, then the
next big hurdles are up at the 971.50-972.50 area on the SP
futures and the 1347.50-1348.50 area on the Nasdaq futures.
If the market is weak, those areas will be rejected if they
are reached. If the market has no trouble pushing through
those areas, then the key resistance on Monday is at the
987.50-988.00 area on the SP futures and the 1370.50-1372.00
area on the Nasdaq futures.
The initial support is at the 933.00-932.00 area on the SP
futures and the 1310.50-1309.75 area on the Nasdaq futures.
If there is follow through weakness and those are broken,
then beware that a rally could begin from the 927.00-926.00
area on the SP futures and the 1302.00-1300.50 area on the
Nasdaq futures if there is a quick reversal back up. If that
doesn't happen, then the next support is down at the 920.00-
918.50 area on the SP futures and the 1281.25-1280.50 area
on the Nasdaq futures. If the market spills that far and
still cannot get footing and turn around, then the door is
open for a drop towards the 905.50-905.00 area on the SP
futures and the 1266.00-1264.50 area on the Nasdaq futures.
If those are broken and the market continues lower, the key
support is at the 892.75-891.25 area on the SP futures and
the 1236.00-1234.75 area on the Nasdaq futures. If those are
not quickly reversed, then a test/break of the 840-838 zone
on the SP500 cash and futures is likely in the cards before
a bottom is put in place.
December 2008 SP futures resistance
symbols: emini = esz8 / big contract =spz8
957.75-959.25
971.50-972.50
987.50-988.00
December 2008 SP futures support
symbols: emini = esz8 / big contract =spz8
933.00-932.00
927.00-926.00
920.00-918.50
905.50-905.00
892.75-891.25
840-838 {SP500 cash}
December 2008 Nasdaq futures resistance
symbols: emini = nqz8 / big contract = ndz8
1332.00-1333.00
1347.50-1348.50
1370.50-1372.00
December 2008 Nasdaq futures support
symbols: emini = nqz8 / big contract = ndz8
1310.50-1309.75
1302.00-1300.50
1281.25-1280.50
1266.00-1264.50
1236.00-1234.75
December 2008 Dow futures resistance
symbols: emini = ymz8
9032-9038
9147-9152
9284-9288
December 2008 Dow futures support
symbols: emini = ymz8
8741-8736
8688-8682
8612-8607
8521-8514
8432-8426
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---------------------------
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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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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