Market Comment 4/18/06

Dateline: 7:31 pm Eastern Time, 4/18/2006

We will be away on Wednesday and part of Thursday.
Everyone's subscription will be extended. The next update
will be published on Thursday night.

The market gapped up on the open on Tuesday, and the move
initially had trouble at the 1299.00-1300.50 area on the SP
futures. The small pullback didn't stick, as buyers were in
line at 1297.50 on the SP futures and 1713.25 on the Nasdaq
futures, and the upside was back in gear. In trend up
fashion, the market went for the big resistance at the
1307.75-1308.50 area on the SP futures. The SP futures
reached 1307.50 while the Nasdaq futures reached 1732.00,
and then there was a pullback before the FOMC minutes. After
that release the market spiked higher and then reversed.
However, the market refused to give much ground and headed
back up. The rally lasted into the final hour with the SP
futures getting to 1316.00 and the Nasdaq futures reaching
1742.75 before a dip into the close.

It looks like the SP may want to try to test the top of this
big range, if the market didn't exhaust itself on Tuesday.
That would get the SP futures back to the 1322 area, which
is a level both the bulls and bears would like another look
at.

That might be asking for a lot. The volume picked up pace on
Tuesday, with up volume swamping down volume by more than a
9 to 1 ratio. Also, the rally lasted from the opening bell
to the closing bell, leaving all of the averages in
uptrends.Whatever the case, a bit more on the upside will
likely set the stage for another sharp drop. The RBI Sell
gate is open, and the Vix dropped almost 10% on Tuesday.

On Wednesday look for the "sell early, buy the first decent
pullback" pattern in the early going. If there is early
strength, look for a reversal no later than 20-40 minutes
into the trading day. Thereafter, as long as initial support
holds, the market should be okay and stay in uptrends.

For more information on the RBI Updates and
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resistance numbers go to:
http://www.TradeStalker.com

Good Trading,
Mike Reed