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TradeStalker's
R.B.I. Trader's Update
1/16/2007
(Published Since 1996)
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Dateline: 6:23 pm Eastern time, 1/16/2007
The market rallied for the first 30 minutes of trading on Tuesday, but after getting to 1442.00 on the SP futures and 1862.75 on the Nasdaq futures the market sold off. A quick drop to 1437.25 and 1853.50 was bought, but the upside couldn't gather any enthusiasm and the market backed off to test the 1436.50-1436.25 key area on the SP futures. After making lows at 1436.50 and 1851.50 on the Nasdaq futures,that 1436.50-1436.25 area on the SP futures attracted buyers as the market bounced grudging off of those levels. The SP and Nasdaq futures chopped to 1440.75 and 1862.25 by early afternoon, then the market sold off for another test of the lows. The SP futures reversed off of a 1436.25 low while theNasdaq futures held at 1851.75 low, and the market rallied back to the afternoon highs. While the Dow was able to grind higher, the SP and Nasdaq futures traded sideways in to theclose.
So far the market avoided trouble by holding the 12541-12539 area on the Dow cash, the 1436.50-1436.25 area on the SP futures, and the 1854.00-1852.50 on the Nasdaq futures.*However* it was less than impressive action. We sure didn't get the aggressive kind of buying off those levels like we have been seeing. Also, the bids seemed to vanish up around the 1439.75-1440.25 zone on the SP futures and 1861.75-1863.00 area on the Nasdaq futures. The Vix reversed on Tuesday, giving a couple of Vix sell signals. Lastly, Google may have made a double top at 513 on Tuesday. If that's the case, then the end of the Nasdaq's upside leadership should be in jeopardy short term.
That said, caution is urged on the long side at the moment. On Wednesday we get the PPI before the open, and the Fed'sBeige Book at 2pm. Unless the 1439.75-1440.25 area on the SP futures and the 1861.75-1863.00 area on the Nasdaq futuresare exceeded, the short side should offer the better setups. If the 1436.50-1436.25 area on the SP futures and the1852.00-1851.50 area on the Nasdaq futures can *not* hold on another test of those areas, then the trends will start to roll over. If that occurs, then those areas should act asresistance on bounces.
Every evening I give my market comment along with accurate support and resistance levels for the next trading day! Join us now:
Good Trading,
Mike Reed
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