TradeStalker's
R.B.I. Trader's Update
10 / 28 / 2008
(Published Since 1996)
...............................................
Dateline: 7:39 pm eastern time, 10/28/2008
The market opened much higher on Tuesday but the move
fizzled about 30 minutes into the trading day. The SP
futures made a little double top at 881.50 and turned down,
and a pretty aggressive selloff took the SP futures down to
the 844-843 updated support zone. The SP futures reversed
after reaching a 843.25 low and the market went into rally
mode. The SP futures reached 875.00 and then pulled back.
Buying came in after a reversal from 858.50 on the SP
futures and the last 2 hours was a melt-up move. The 893-894
zone was easily exceeded as the SP and Nasdaq futures
rallied 84.50 and 118.00 points, respectively, off the
afternoon lows into the close.
We get the Fed decision on interest rate policy on
Wednesday. The market finished very strong on Tuesday and it
looks like a good low is in place for awhile. Some digestion
of the move is in order, most likely, so the "normal"
pattern before the Fed release may not play out.
The end of day move was parabolic and certainly looks
unsustainable. If the market opens flat or higher, it should
set up a shorting opportunity as soon as the move stalls and
starts to turn over. If that plays out, beware that the
first decent pullback should set up a trade on the long side
as long as the initial support holds. If it doesn't, then
the market could trend down into the Fed release. After the
Fed release, the market tends to make a volatile back-and-
forth gyration, and then find a direction and go that way
into the final minutes of trading. That type of action can
be expected again on Wednesday.
The initial resistance is at the 942.00-943.00 area on the
SP futures and the 1309.00-1310.50 area on the Nasdaq
futures. If those are rejected it will set the stage for a
decent pullback. However, if the market gets over and holds
those areas, then the next resistance is up at the 954.50-
955.00 area on the SP futures and the 1322.50-1324.00 area
on the Nasdaq futures. If those are reached, it should set
up a very good shorting opportunity. If the market gets up
there and does not reverse, then there should be resistance
at the 961.50-963.00 area on the SP futures and the 1340.50-
1342.00 area on the Nasdaq futures. If somehow the market
gets that far, and still does not reverse, then look for
some resistance at the 972.00-972.50 area on the SP futures
and the 1353.50-1355.00 area on the Nasdaq futures. If there
is another melt-up move, then there should be resistance at
the 986.00 level and possibly up to the 992.50-993.00 area
on the SP futures.
The initial support is at the 921.50-920.50 area on the SP
futures and the 1280.50-1279.50 area on the Nasdaq futures.
If those are broken, then it looks like the 914.00-913.00
area on the SP futures and the 1251.50-1250.25 area on the
Nasdaq futures would be a key area. If those do not hold,
then the 901.00-899.50 area on the SP futures and the
1240.50-1238.00 area on the Nasdaq futures could be magnets.
If the market gets down there and cannot reverse, then the
key support would be at the 894.00-893.00 area on the SP
futures and the 1228.50-1227.75 area on the Nasdaq futures.
If those are broken, then the 875.00 level on the SP futures
and the 1208.50 level on the Nasdaq futures need to hold or
else we could see a spill towards major support at the
858.50-857.50 area on the SP futures and the 1193.00-1191.00
area on the Nasdaq futures.
December 2008 SP futures resistance
symbols: emini = esz8 / big contract =spz8
942.00-943.00
954.50-955.00
961.50-963.00
972.00-972.50
986.00
992.50-993.00
December 2008 SP futures support
symbols: emini = esz8 / big contract =spz8
921.50-920.50
914.00-913.00
901.00-899.50
894.00-893.00
875.00
858.50-857.50
December 2008 Nasdaq futures resistance
symbols: emini = nqz8 / big contract = ndz8
1309.00-1310.50
1322.50-1324.00
1340.50-1342.00
1353.50-1355.00
December 2008 Nasdaq futures support
symbols: emini = nqz8 / big contract = ndz8
1280.50-1279.50
1251.50-1250.25
1240.50-1238.00
1228.50-1227.75
1208.50
1193.00-1191.00
December 2008 Dow futures resistance
symbols: emini = ymz8
9110-9118
9232-9239
9318-9327
9418-9423
December 2008 Dow futures support
symbols: emini = ymz8
8902-8896
8842-8838
8649-8638
8580-8572
8443
8275-8267
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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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