TradeStalker's
R.B.I. Trader's Update
10 / 27 / 2008
(Published Since 1996)
...............................................
Dateline: 7:46 pm eastern time, 10/27/2008
The market opened lower on Monday but the early weakness was
reversed about 10 minutes into the day and the SP futures
rallied from 852.25 to 881.75 before the move fizzled. The
market pulled back, with the SP futures falling to 866.50
before turning back up. A double top formed as the SP
futures turned down from 881.50 and the market pulled back
again. The selling was relatively calm, and after pulling
back from a third try to get through the 882 level, the
market finally took off to the upside. The rally reversed
after poking over the 893.00 resistance level, and a steady
selloff followed. The 865.25 level on the SP futures was
reversed, but the SP futures couldn't get back over the
877.50 level and rolled over and fell to the 864-863 area
with 15 minutes left in trading. A bounce was reversed, and
with 10 minutes left in stock trading that zone was broken
and a "long covering" panic hit an air-pocket as the market
fell fast to new lows for the day (and year for the SP500)
in the final minutes of trading.
We get the Consumer Confidence number 30 minutes in to the
trading day on Tuesday. The SP futures reached the key
support at the 835.00-834.50 zone and closed in it on
Monday. The SP futures settled about 15 points under fair
value, so a sizable drop in stock prices in factored into
the open on Tuesday. If this holds overnight, then the first
hour will be a volatile one.
The rallies are not sticking, and all of the bottom pickers
are now holding a losing position on the SP futures. On
Tuesday look for early weakness to set up a buying
opportunity if there is a reversal in the first 15 minutes
of trading. If you want to wait until the Consumer
Confidence number is released before getting involved, that
wouldn't be a bad idea. If there is a decent rally attempt
on Tuesday, it will be sold as soon as the upside loses
momentum and the move starts to roll over. In order to get
the market into a neutral position, the 876.00-877.00 area
on the SP futures and the 1210.50-1211.25 area on the Nasdaq
futures both will need to be exceeded, and then hold over
870.00 on the SP futures and 1198.00 on the Nasdaq futures
on a pullback.
The first hurdles on Tuesday are at the 863.00-864.00 area
on the SP futures and 1191.25-1192.25 area on the Nasdaq
futures. If those are reached, the market should reverse. If
the market gets up there and doesn't reverse, then the
876.00-877.00 area on the SP futures and 1210.50-1211.25
area on the Nasdaq futures would be the first key resistance
areas. If those are exceeded, and a pullback holds, then a
test of the Monday highs at the 893.00-894.00 area on the SP
futures and 1227.50-1228.50 area on the Nasdaq futures could
be in the cards.
The initial support is at the 834.50-833.50 area on the SP
futures and 1158.25-1157.50 area on the Nasdaq futures. If
buyers keep their hands in their pockets and those are
broken, then the move could continue right on down towards
the 823.50-822.50 area on the SP futures and 1149.00-1147.50
area on the Nasdaq futures. If there isn't a reversal from
that area, then the market will likely go for the 816.00-
815.00 area on the SP futures and 1138.50-1136.50 area on
the Nasdaq futures. If there is no turn around from those
areas, then we could see the 2002 low at the 768 level on
the SP500 cash turn into a magnet. That would be an 80 point
drop on the SP500 cash, and first limit down on the SP
futures would be at 774.70 on the SP futures. So if the
market goes limit offer, and the SP500 cash reaches 768 and
then begins to rally, a good reflex rally is possible.
However, if the market gets down there and can not get
turned back up, a mini crash is in the works.
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December 2008 SP futures resistance
symbols: emini = esz8 / big contract =spz8
863.00-864.00
876.00-877.00
893.00-894.00
December 2008 SP futures support
symbols: emini = esz8 / big contract =spz8
834.50-833.50
823.50-822.50
816.00-815.00
768.63 {SP500 cash}
December 2008 Nasdaq futures resistance
symbols: emini = nqz8 / big contract = ndz8
1191.25-1192.25
1210.50-1211.25
1227.50-1228.50
December 2008 Nasdaq futures support
symbols: emini = nqz8 / big contract = ndz8
1158.25-1157.50
1149.00-1147.50
1138.50-1136.50
December 2008 Dow futures resistance
symbols: emini = ymz8
8313-8318
8416-8425
8575-8581
December 2008 Dow futures support
symbols: emini = ymz8
8002-7997
7902-7894
7822-7817
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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.
www.TradeStalker.com
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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