Market Comment 01/15/07

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TradeStalker's

R.B.I. Trader's Update

1/15/2007

(Published Since 1996)

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Dateline: 5:33 pm Eastern time, 1/15/2007


On Friday the market was range-bound early, as it bounced
between resistance and support. The futures broke initial
resistance before noon and the first pullback to 1435.00
held. That led to a move to the 1439.50-1440.50 area on the
SP futures and the 1862.50-1864.00 area on the Nasdaq
futures. They made highs at 1439.50 and 1861.25,
respectively, then fell back softly to 1437.25 and 1855.75.
Buyers took them back up to test the highs, failing twice
before stocks closed. After stocks closed, the futures broke
out higher and closed the day well over fair value.

The Dow, SP500, and Nasdaq averages closed at new highs for
this move on Friday. The Nasdaq has closed higher for 5 days
in a row. That leadership has to keep up, or there could be
a surprise coming. Another up day on Tuesday will likely get
most of the indicators very overbought. Also, the VIX closed
10% under its 10 day average and the 5 day RSI is under 30.
If the VIX reverses, we will get several sell signals.

The market has good momentum and trends are all up. For now,
the market will be in uptrends unless / until the 1436.50-
1436.25 area on the SP futures is broken and held on a
bounce. If that occurs, then a change in trend could lead to
a fairly sharp reversal.

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Good Trading,
Mike Reed