TradeStalker's
R.B.I. Trader's Update
11 / 6 / 2008
(Published Since 1996)
...............................................
Dateline: 7:00 pm eastern time, 11/6/2008
The market gapped down on the open on Thursday, and after
popping up to fill the gaps, the SP futures rolled over from
a 950.50 high and it was a steady trend down move into 2pm
eastern time. A bounce from 900.50 (just above the 899.50-
898.00 support zone) took the SP futures to 920.25, just
under the 921 updated resistance, and the market backed off
rolled over again. A drop to 898.00 was reversed, but the
pop fizzled and the SP futures sold off to an 897.00 low
with 5 minutes left in stock trading. Buying/short covering
gave the futures feeble lift after stocks closed but then
sagged into settlement time.
The Dow lost 400 points on back to back days. The market was
so overextended that we shouldn't be surprised in current
conditions. The closing Trin at 3.88 on Wednesday and 4.14
on Thursday are normally signs of capitulation, and good
lows tend to be seen within 7 trading hours after such an
extreme. We shall see about that.
On Friday the Employment data will be released before the
open. The market is not in good shape, and unless/until the
market can establish a decent uptrend, the bounces should
continue to offer the better odds trades. A decent rally can
start any time, but it's better to let someone else buy
bottom tick. In order to get some of the downside pressure
off the market, the SP futures need to break the 920-921
area and not reverse, again. Absent that, the trends are
down and the market is still vulnerable.
The initial resistance is at the 914.00 level on the SP
futures [8764] and 1253.00 level on the Nasdaq futures. If
those are cleared, then the 920.25-921.00 area on the SP
futures [8812-8819] and 1267.50-1268.50 area on the Nasdaq
futures should be key areas. If the market gets back up
there and the move doesn't fail, as the rallies have been
doing, then the trends could be turning. The next hurdles
would be at the 931.00-932.00 area on the SP futures [8893-
8897] and 1281.50-1282.25 area on the Nasdaq futures. If the
market gets there and doesn't reverse, then a move towards
the 940.00-941.00 area on the SP futures [8952-8958] and
1288.50-1290.00 area on the Nasdaq futures could be in the
cards. That should be a tough area to get through, but if
something happens to spark a good rally that sticks, then we
could see a run towards the 946.00-946.50 area on the SP
futures [9002-9008] and 1294.50-1296.00 area on the Nasdaq
futures. Don't expect this, but if there is a good rally,
then the 957.50-958.50 area on the SP futures [9136-9144]
and 1320.50-1322.50 area on the Nasdaq futures would be key
resistance for this week.
The initial support is at the 898.00-897.00 area on the SP
futures [8616-8611] and 1236.50-1235.00 area on the Nasdaq
futures. If those areas are not held, or quickly reversed if
broken, then a drop towards the 886.00-884.50 area on the SP
futures [8498-8491] and 1220.00-1218.00 area on the Nasdaq
futures is likely. The market has been hit hard, so we could
see a decent bounce if those are tested and the market
reverses. If that doesn't occur, then there isn't a whole
lot of support until getting to the 865.00-864.00 area on
the SP futures [8262-8254] and 1192.00-1190.00 area on the
Nasdaq futures. If the market drops that far and can not
hold, then we can go for the 845.50 level on the SP futures,
which would be limit down. If that happens, then watch the
SP500 cash while the futures stay locked at the limit. If
the SP500 cash sells off to the 835.00-834.00 area when the
curb is lifted, it would coincide with the low for the year.
That would made that same 835-834 area on the SP futures key
support. If the market tests that area, it will need to
quickly reverse and rally with some gusto to avoid a
collapse on Friday.
December 2008 SP futures resistance
symbols: emini = esz8 / big contract =spz8
914.00
920.25-921.00
931.00-932.00
940.00-941.00
946.00-946.50
957.50-958.50
December 2008 SP futures support
symbols: emini = esz8 / big contract =spz8
898.00-897.00
886.00-884.50
865.00-864.00
835.00-834.00
December 2008 Nasdaq futures resistance
symbols: emini = nqz8 / big contract = ndz8
1253.00
1267.50-1268.50
1281.50-1282.25
1288.50-1290.00
1294.50-1296.00
1320.50-1322.50
December 2008 Nasdaq futures support
symbols: emini = nqz8 / big contract = ndz8
1236.50-1235.00
1220.00-1218.00
1192.00-1190.00
December 2008 Dow futures resistance
symbols: emini = ymz8
8764
8812-8819
8893-8897
8952-8958
9002-9008
9136-9144
December 2008 Dow futures support
symbols: emini = ymz8
8616-8611
8498-8491
8262-8254
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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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