Market Comment 12/26/06

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TradeStalker's

R.B.I. Trader's Update

12/ 26 / 2006

(Published Since 1996)
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Dateline: 6:32 pm Eastern time, 12/26/2006

The market rallied out of the starting gate Tuesday morning,
but the rally was rejected at the 1427.50-1428.00 resistance
on the SP futures and 1774.00-1776.00 zone on the Nasdaq
futures. From there the market gave back half of its gains
before noon. After then going sideways for a few hours, the
market started to rally back in the early afternoon. After
stalling out just under the early highs for an hour there
was a little shakeout lower, but as soon as the move stalled
buyers came in and took the market to new highs for the day
in the final minutes of trading.

Well, it would have been perfect had the market sold off
early and then reversed to close like it did on Tuesday.
That didn't set up though, yet the market still ended the
day in pretty good shape. The last 4 days of the month have
tended to be good for the long side. In addition, the VIX
gave several buy signals on Tuesday as sentiment swings back
from too bearish. The bad news is that the Nasdaq is still
struggling, and certainly was the lager on Tuesday.

On Wednesday morning, look for early strength to be sold and
then for the first decent pullback to offer a set-up on the
long side. As long as the 1425.00-1424.50 area on the SP
futures holds, the bulls should be in control.

Get my nightly support and resistance zones that I'll be
buying and selling against the following trading day along
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Good Trading,
Mike Reed