Market Comment 4/23/06

Dateline: 6:01 pm Eastern time, 04/23/2006


On Friday morning the SP futures reached 1324.00 and quickly
backed away. The market tried to hold into the afternoon,
but after rolling over, a steady selloff took the Nasdaq
futures to 1712.00 and the SP futures to 1312.00. That was
just 1 tick above RBI key support at the 1311.75-1311.00
area. From there, the market snapped back in the final
hour.

With the Dow and SP500 up at multi-year highs here, the
internal gauges are nowhere near confirming these prices.
While the SP and Dow ended flat on Friday, the Nasdaq was
hammered. That price action could occur in the blue chips
next.

The VIX gave multiple Sell signals on Friday. Along with
that, the market is still overbought. (The 4-Day Volume
Ratio is 0.65 for one example.) The momentum is at a stand-
still at Friday's close.

At the moment we have strong resistance on the SP futures
around 1324.75 and strong support around 1311.50. If there
is another test of the 1324.00-1324.75 area, it should fail.
On the bottom side, if we go under 1311.00 and cannot
quickly reverse, then the longs will probably go for the
exit door.

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Mike Reed