Market Comment 12/17/06

.................................................

TradeStalker's

R.B.I. Trader's Update

12/17/2006

(Published Since 1996)

...............................................



Dateline: 6:33 pm Eastern time, 12/17/2006


It was a very good week for the stock market and with lots
of volatility for the daytrader. On Friday morning the SP
futures rallied to the 1443.75-1444.75 resistance zone and
by early afternoon they sold off to the 1437.50-1436.50
support zone. After a bounce from that area didn't get
traction, the market fell off and closed near the day's
lows.

The Dow and SP500 both made new intraday and closing highs.
The Nasdaq 100 refuses to join in. Its print high was 1824
and its closing high was 1819. We need to see that join the
parade, especially since it led most of the way up to these
levels.

That may have to wait for now. On Friday, the SP and Nasdaq
futures made their highs in the morning and then closed just
off the lows. This pattern at a new high shows distribution.
Along with prices, the VIX gave several sell signals on
Friday. It reversed from a multi-year low and closed near
its high for the day.

Both sides were in play last Friday and they likely will be
again on Monday. For now, treat the Friday high areas as a
shorting zone with tight stops. On the bottom side, if there
is a move back to the 1432.50-1431.50 area on the SP futures
and the market can hold that zone, then a decent buying
opportunity might present itself. Aside from that, try to
only get involved at extremes and leave the choppy periods
alone.

Get my nightly support and resistance zones that I'll be
buying and selling against the following trading day along
with my bullish or bearish outlook for the next day's market
action. Yes, we have a FREE TRIAL!

http://www.tradestalker.com/

Good Trading,
Mike Reed