TradeStalker's
R.B.I. Trader's Update
11 / 2 / 2008
(Published Since 1996)
...............................................
Dateline: 4:56 pm eastern time, 11/2/2008
On Friday the market opened lower and after about 20 minutes
of trading, the market reversed and the end-of-month rally
was under way. It was a stair-step higher for the market
until getting to the 981-982 area on the SP futures and the
1355.50-1357.00 area on the Nasdaq futures. The market
backed off from those areas and then there was one more pop
above those areas that reversed. The risk on new longs at
those levels was high indeed, as the SP futures dropped
28.75 points off its high before a bounce into the close.
In early August I stated that an August high to an October
low was likely for the bigger picture. With October behind
us, the market still has work to do. The Fed day lows are
now key support that should not be broken if the market is
going to stay out of trouble. The daily internal indicators
are now extremely overbought, showing that a lot of fuel has
been used over the past week. My RBI Sell gate is open and
my 3 day thrust oscillator is also stretched to an extreme.
In addition, the VIX is giving warning signals by dropping
so much over the past week. The upside shouldn't be as
"easy" as it has been the last couple of days.
After closing poorly on Wednesday and then opening up 29
points on the Thursday open, the market has traded in an
upsloping channel. If that is broken on Monday, then the
bounces will be shorting opportunities as the market could
then head down towards the 944.00-943.00 area on the SP
futures. That would be a wake-up call for the complacent
bulls and would be a key test of the market psyche.
On Monday, look for a shorting opportunity if there is early
strength as soon as the upside stalls and begins to roll
over. This should occur in the first 20-40 minutes if a
rally is going to fail. If this plays out and the pullback
holds the initial support, then the uptrend should continue.
However, if the initial support is broken, then shorting the
bounces should offer the better odds setups on Monday.
The initial resistance is at the 973.00-974.00 area on the
SP futures and the 1343.50-1344.25 area on the Nasdaq
futures. If broken, then the next hurdles are at the 983.00-
984.00 area on the SP futures and the 1360.50-1361.25 area
on the Nasdaq futures. If those are exceeded, then the
pattern of higher highs continues and we could see a pop to
the 987.50-988.50 area on the SP futures and the 1366.50-
1368.00 area on the Nasdaq futures. If the market gets
through those areas without any trouble then the 997.50-
998.50 area on the SP futures and the 1378.50-1380.25 area
on the Nasdaq futures is the next key hurdle and a spot to
beware of a reversal.
The initial support at the 956.00-955.00 area on the SP
futures and the 1321.00-1319.50 area on the Nasdaq futures.
If the market gets through those areas and doesn't quickly
reverse, then a drop towards the 944.00-943.00 area on the
SP futures and the 1306.00-1305.25 area on the Nasdaq
futures would be next. If that area isn't defended, then the
market could be going into a deeper pullback and possibly
fall towards the 936.00-935.50 area on the SP futures and
the 1298.00-1296.50 area on the Nasdaq futures. If that area
is tested, it should set up a great buying opportunity on a
reversal. If it doesn't hold, then there should be very good
support at the 927.50-926.50 and 1288.75-1287.50 zones. If
the market doesn't turn around from a drop that deep, then a
test of the Fed day low at the 919.00-918.00 area on the SP
futures and/or the 1278.50-1277.00 on the Nasdaq futures
must hold. If it doesn't, then only the 909.50-908.50 area
on the SP futures and the 1257.00-1255.50 area on the Nasdaq
futures would be in the way of another crashette type of
day.
December 2008 SP futures resistance
symbols: emini = esz8 / big contract =spz8
973.00-974.00
983.00-984.00
987.50-988.50
997.50-998.50
December 2008 SP futures support
symbols: emini = esz8 / big contract =spz8
956.00-955.00
944.00-943.00
936.00-935.50
927.50-926.50
919.00-918.00
909.50-908.50
December 2008 Nasdaq futures resistance
symbols: emini = nqz8 / big contract = ndz8
1343.50-1344.25
1360.50-1361.25
1366.50-1368.00
1378.50-1380.25
December 2008 Nasdaq futures support
symbols: emini = nqz8 / big contract = ndz8
1321.00-1319.50
1306.00-1305.25
1298.00-1296.50
1288.75-1287.50
1278.50-1277.00
1257.00-1255.50
December 2008 Dow futures resistance
symbols: emini = ymz8
9345-9352
9422-9428
9478-9484
9572-9579
December 2008 Dow futures support
symbols: emini = ymz8
9180-9172
9098-9091
8994-8989
8949-8944
8850-8842
8719-8712
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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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