TradeStalker's RBI Update 01/12/10

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TradeStalker's

R.B.I. Trader's Update

1 / 12 / 2010

(Published Since 1996)

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Dateline: 6:16 pm eastern time, 1/12/2010

The market gapped down on Tuesday, and the ES fell to
1132.50 and and reversed. That was 2 ticks over the 1132.00-
1131.25 support which set up a scalp on the long side. Then
the move reached the updated resistance at 1137.75 to the
tick, filling the gap and then was rejected 2 more times. We
expected bounces to fail, and that action set up a great
short with a tight stop. The move was good for 10 points on
the ES as it reached 1127.75 shortly after 1pm. A bounce
back off that low just missed the 1133 level, reaching
1132.25 before heading back down. A reversal off of 1128.50
occurred with 20 minutes left in stock trading and then the
market rallied into the close.

The market was about to finish the day on a weak note, but
out of the blue buying came in and once again and propped
the market back up. The action off of the 1146.25 high on
Monday still looks like it was the start of a correction.
However, as long as the 1129.00-1128.50 area on the ES is
defended on a pullback, nothing bad will happen. If there is
a drop through that area, but it reverses back up from the
1126.00-1125.00 zone, then a bounce like the late Tuesday
rally is likely. If that area is broken, then a bigger
picture top is likely in place, and a move back under
1109.50 is likely in the cards.

We get the Fed's Beige Book on Wednesday at 2pm. The futures
settled above fair value so higher prices are expected on
the open if they hold over night. If there is early weakness
on Wednesday, look for a reversal from near initial support
to set up a trade on the long side. If that plays out,
beware that as soon as the upside loses momentum, the market
could pull back pretty fast. We should get another 2-sided
trading day, so buy the dips that reverse, and/or short the
run-ups as soon as the upside stalls out.

March 2010 SP futures resistance
symbols: emini = esh0 / big contract =sph0

1135.00
1337.75-1138.50
1143.75-1144.25
1146.50-1148.00

March 2010 SP futures support
symbols: emini = esh0 / big contract =sph0

1132.50-1131.50
1129.00-1128.50
1126.00-1125.00
1123.00-1122.50

March 2010 Nasdaq futures resistance
symbols: emini = nqh0 / big contract = ndh0

1866.50
1871.00-1872.00
1876.25-1877.50
1886.00-1886.50

March 2010 Nasdaq futures support
symbols: emini = nqh0 / big contract = ndh0

1859.50-1859.00
1855.25-1853.75
1850.00-1849.50
1846.00-1844.50

March 2010 Dow futures resistance
symbols: emini = ymh0

10595
10615-10619
10649-10653
10682-10686

March 2010 Dow futures support
symbols: emini = ymh0

10568-10565
10537-10534
10501-10498
10482-10479

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Good Trading,
Mike Reed
TradeStalker.com

Copyright (c) 2010 by TradeStalker.com, Ft Wayne, IN.
TradeStalker Updates may not be redistributed without
permission.

This publication's primary focus is trading the index
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(DIA), and (DOG)

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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
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is substantial. You can lose more than your original
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