Market Comment 03/25/07

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TradeStalker's
R.B.I. Trader's Update
3/ 25/ 2007
(Published Since 1996)
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Dateline: 5:54 pm eastern time, 3/25/2007

We wanted to short in the 1449.50-1450.50 area on the SPfutures and the 1824.50-1827.50 area on the Nasdaq futuresearly Friday. About 40 minutes into the trading day, the SPfutures reversed from 1451.00 while the Nasdaq futuresturned down from a 1824.50 high, and the market backed off.While the Nasdaq futures never could get back to that area,the SP futures tried twice more and failed both times. Theyreversed from 1450.50 just after noon and then from 1449.75at 3:24 pm, and the market ended the day on a down-swing.

The upside momentum is really waning here. The Fed movehasn't had any follow through and the narrow ranges afterthat move is normally a red flag. One month ago, going intothe end-of-month "normal" mark-up, everything was lookinggreat and then the bottom fell out. Right now the market hasa similar "feel", as the bids dry up on the pops into thatoverhead resistance. As long as the Friday high areas arenot exceeded and held, we could get another sharp drop.Unless that occurs, the focus should be on the short side onbounces. If those areas *are* cleared and the market doesn'tquickly reverse, then we could go for the old highs.

Look for strong resistance at the 1449.50-1451.00 area onthe SP futures and the 1818.00-1818.75 area on the Nasdaqfutures. If those are broken, then look for resistance atthe 1453.50-1454.00 area on the SP futures and the 1824.00-1824.50 area on the Nasdaq futures. If those are blownthrough, then we could go for the 1457.50-1458.00 area onthe SP futures and/or the 1829.00-1830.50 area on the Nasdaqfutures.

There should be pretty good support at the 1441.75-1441.00area on the SP futures and the 1805.75-1804.50 area on theNasdaq futures. If those are reached and the market cannotsnap right back, then things could be changing again. Thenext support is down at the 1437.50-1437.00 area on the SPfutures and the 1798.75-1796.50 area on the Nasdaq futures.That would be a sizable pullback and should hold. However,if those levels break, then we could be in another littlepanic phase. The last support before going back towards the1421 level on the SP futures is at the 1433.75-1432.50 areaon the SP futures and the 1790.75-1787.50 area on the Nasdaqfutures.

June 2007 SP futures resistancesymbols: emini = esm7 / big contract =spm7
1449.50-1451.00
1453.50-1454.00
1457.50-1458.00

June 2007 SP futures supportsymbols: emini = esm7 / big contract =spm7
1441.75-1441.00
1437.50-1437.00
1433.75-1432.50

June 2007 Nasdaq futures resistancesymbols: emini = nqm7 / big contract = ndm7
1818.00-1818.75
1824.00-1824.50
1829.00-1830.50

June 2007 Nasdaq futures supportsymbols: emini = nqm7 / big contract = ndm7
1805.75-1804.50
1798.75-1796.50
1790.75-1787.50

Dow resistancesymbols: $INDU/DJIA
12498-12512
12534-12542
12566-12573

Dow supportsymbols: $INDU/DJIA
12421-12408
12387-12380
12358-12353

June 2007 Russell futures resistancesymbols: emini = er2m7 / big contract = er2m7
817.10-818.00
820.00-820.50
822.40-822.90

June 2007 Russell futures supportsymbols: emini = er2m7 / big contract = er2m7
811.00-810.50
808.00-807.50
805.50-804.70

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Good Trading,Mike Reed
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