TradeStalker's RBI Update 12/27/09

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TradeStalker's

R.B.I. Trader's Update

12 / 27 / 2009

(Published Since 1996)

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Dateline: 5:26 pm eastern time, 12/27/2009

The SP500 cash and futures finally broke out of the ranges
on Wednesday. On Thursday there was a gap up open, and
follow through buying took the ES up to the 1122.50-1124.00
resistance zone in the first 30 minutes. A small pullback
from 1122.50 to 1119.75 followed, and then the market
churned with an upside bias back to the highs at the close.

All of the major averages closed at new highs for the year
on Thursday. For the last 5 days the pullbacks have held,
and then the upside gets going again. However, the market
looks to be at an important spot here. The short term
indicators are very overbought, and the Vix gave 2 sell
signals, and normally this sets up a decent pullback - or at
best there is back and forth action. What keeps hope alive
for the bulls up here is that the last 2 days of the month,
first 2 days of a new month has a historical upside bias.
So, given this conflict, it will likely set the market up
for more volatility than we have seen recently. A pullback
shouldn't take out the 1117.75-1117.00 area on the ES, or
quickly reverse if it is broken, if the market is going to
avoid going back down into the old trading range.

On Monday, look for early strength to set up a shorting
opportunity if there is a reversal in the first 40 minutes
of trading. If that plays out, beware that as long as the
initial support areas hold on early weakness, the market
will still be in uptrends and in decent shape. If the market
wants to take off higher, then we could potentially see the
1154.00-1156.00 area before the move encounters trouble. I
doubt that occurs without a good pullback first though. If
the ES breaks the 1115.00-1114.75 zone and doesn't quickly
reverse, then the market could see downside acceleration as
the breakout would have failed.

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

1122.50-1124.00
1128.00-1128.50
1132.00-1134.50
1154.00-1156.00 major


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

1120.25-1119.75
1117.75-1117.00
1115.00-1114.75
1111.25-1110.50


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

1864.50-1866.00
1871.50-1873.00


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

1862.00-1861.50
1858.50-1857.75
1853.00-1851.75
1845.00-1843.75


March 2010 Dow futures resistance
symbols: emini = ymh0

10472-10480
10530-10534


March 2010 Dow futures support
symbols: emini = ymh0

10455-10451
10432-10428
10399-10395
10349-10344

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Good Trading,
Mike Reed
TradeStalker.com

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