Market Comment 12/20/06

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TradeStalker's

R.B.I. Trader's Update

12/20/2006

(Published Since 1996)

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Dateline: 5:44 pm Eastern time, 12/20/2006

The market opened slightly higher on Wednesday and rallied
on up to initial resistance at the 1440.00-1440.50 zone on
the SP futures. That was sold and the market reversed
course. The pullback was rather small, however, and the
market moved back to test the highs. Those areas were
rejected again and another drop followed. The market was
content trading within narrow ranges until the updated
1438.00 support was broken. The selling gathered some steam
as the market fell to new lows for the day, reaching 1434.25
on the SP futures and 1797.50 on the Nasdaq futures. With
decent support at those levels, buyers stepped to the plate
and the market snapped back. They tried to get a rally
going, but the move didn't have the oomph, and the failed
rally attempt led to a move back to the lows by the close.

There's a lot on the economic calendar on Thursday. We get
the GDP and Initial Claims before the open, then the Leading
Indicators at 10am and Philly Fed at noon. We'll see how the
market handles all of that. At the moment the market is
range-bound, with the rallies not sticking on 3 of the past
four days. The Dow made another record intraday print high,
yet the SP500 and Nasdaq 100 haven't confirmed by making a
new high for the year. The tech sector needs to get in gear
very soon or the market will get itself into trouble.

On Thursday morning, look to fade (trade in the opposite
side) an early overreaction to the pre-open numbers as soon
as the move fizzles / reverses. This should work better if
the market should gap down on the open, like on Tuesday.
Thereafter, the resistance and support areas should come
into play. If there is another move that gets sold around
the Wednesday highs, the next selloff could be a lot sharper
than we have been seeing.

Get my nightly support and resistance zones that I'll be
buying and selling against the following trading day along
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http://www.tradestalker.com/

Good Trading,
Mike Reed