TradeStalker's
R.B.I. Trader's Update
11 / 5 / 2008
(Published Since 1996)
...............................................
Dateline: 6:35 pm eastern time, 11/5/2008
The market was vulnerable due to the overbought status on
Wednesday and the market opened down about 15 points on the
SP futures. After reaching 982.50, the market turned back up
and the SP futures rallied back to 999.75. The move fizzled
and after a dip to 994.25, the SP futures popped to a lower
high at 999.25 and reversed. That 1-2-3 top started a pretty
sharp drop as the SP futures fell to 965.50 and then bounced
back. The 977-978 area was tested 3 times and the last test
reversed from 975.25 with just under an hour left in
trading. The 956-955 area was easily cut through as the SP
futures fell to 947.00 just before stocks closed. A bounce
into settlement put the futures above fair value as shorts
covered into the close.
On Thursday look for shorting opportunities as soon as the
upside momentum fizzles and the move begins to turn over.
The market could have some decent bounces, especially if a
gap down open reverses from the initial support areas.
However, it will take a break over the 976-977 area on the
SP futures, that doesn't quickly reverse, to turn the market
back up. Unless that occurs, this selloff could go for the
936.00-935.50 area on the SP futures, and quite possibly as
far as the 927.50-926.50 area before a reversal occurs. If
that area isn't defended, then we could be seeing major
support at the 919.00-918.00 Fed day low area.
The initial resistance is at the 958.75-959.50 area on the
SP futures and the 1306.50-1308.00 area on the Nasdaq
futures. The market will need to get over those areas and
not quickly reverse to avoid more trouble on Thursday. If
those areas are not rejected, then the 965.25-966.00 area on
the SP futures and the 1316.50-1318.00 area on the Nasdaq
futures would be next. Those areas will be pivotal if
reached early on Thursday. If those are not sold, then we
could test the 976.00-977.00 area on the SP futures and the
1331.75-1332.75 area on the Nasdaq futures. Those would be
key resistance areas if reached again. If the market can get
over those areas and not quickly reverse, then the market
should be out of trouble short term.
The initial support should be key and is at the 944.00-
943.00 area on the SP futures and the 1272.50-1271.00 area
on the Nasdaq futures. If there is an early reversal back up
from those areas, we could get a decent countertrend trade
on the long side. Just don't fall in love with the long
side, as bounces will likely be sold. If those areas are not
quickly reversed, then the next support would be down at the
936.00-935.50 area on the SP futures and the 1262.00-1260.50
area on the Nasdaq futures. If the market cannot turn around
from there, then the 927.50-926.50 area on the SP futures
and the 1251.50-1249.75 area on the Nasdaq futures should be
very good support. However, if buyers don't step to the
plate and reverse, then the door is opened for a drop
towards the 920.00-918.50 area on the SP futures. That is a
50% retracement from 834.00 to 1006.75, along with the Fed
day spike low on October 29th. If that key area also is
broken and the market cannot quickly reverse, then a drop
towards the 899.50-898.00 area on the SP futures could be in
the cards.
December 2008 SP futures resistance
symbols: emini = esz8 / big contract =spz8
958.75-959.50
965.25-966.00
976.00-977.00
984.50-985.50 if 977 broken/held
December 2008 SP futures support
symbols: emini = esz8 / big contract =spz8
944.00-943.00
936.00-935.50
927.50-926.50
920.00-918.50
899.50-898.00
December 2008 Nasdaq futures resistance
symbols: emini = nqz8 / big contract = ndz8
1306.50-1308.00
1316.50-1318.00
1331.75-1332.75
December 2008 Nasdaq futures support
symbols: emini = nqz8 / big contract = ndz8
1272.50-1271.00
1262.00-1260.50
1251.50-1249.75
December 2008 Dow futures resistance
symbols: emini = ymz8
9184-9190
9240-9246
9334-9341
December 2008 Dow futures support
symbols: emini = ymz8
9061-9054
9002-8996
8914-8907
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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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