Market Comment 03/27/07

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TradeStalker's
R.B.I. Trader's Update
3/27/2007
(Published Since 1996)
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Dateline: 7:22 pm Eastern time, 3/27/2007

The market opened lower on Tuesday, and the first bounceattempt came from just under the 1438.50-1438.00 supportarea. There was a pop from there, but it was sold and therewas another washout to 1436.00 just before noon. There was arally off of that level, but it reversed after poking 1 tickover updated resistance. The selling took the SP futures tothe 1438.00 updated support level, and then the marketturned up and rebounded to 1442.25 on the SP futures beforeselling off a bit into the close.

This market has been acting like something is wrong outthere on the horizon. We get sharp selling early, then agrinding rally back that eventually fizzles. On the plusside, the sharp drops get bought once the downside momentumstalls. That could also be a negative, making bulls feelinvincible. When there is a selloff that just grinds withonly tiny pops, we could see it snowball.

Fed Chairman Bernanke speaks on Wednesday. He has done agood job of giving the market what it wants to hear. Themarket is on shaky ground, so he better not disappoint. Inafter hours trading there was some crazy action that startedwhen that 1438.00 level broke at 4:53pm. If there is a bigdown open, that could reverse and give an opportunity on thelong side in the early going. Thereafter, unless there is amove over the initial resistance areas that holds, favorshorting the bounces as soon as they run out of steam andfizzle.

Initial resistance is at the 1442.25-1442.75 area on the SPfutures and 1814.00-1815.00 area on the Nasdaq futures. Ifthose are exceeded, and held, then the market could be backin decent shape. If that occurs, then look for the 1449.50-1451.00 area on the SP futures and 1824.00-1824.50 area onthe Nasdaq futures. Those are the lids that need to beexceeded for the market to get out of the top of the ranges.

The first decent support should be at the 1438.25-1437.75area on the SP futures and 1807.50-1806.25 area on theNasdaq futures. Below those areas, the 1433.75-1432.50 areaon the SP futures and 1799.75-1798.00 area on the Nasdaqfutures would be next. If the market can not make its"usual" bounce off of those areas, then we should see themarket fall towards the 1428.50-1427.50 area on the SPfutures and 1793.25-1791.00 area on the Nasdaq futures. Ifthe market gets down here, and still can not hold, then itcould mean bigger trouble. Key support would be at that old1421.00 level on the SP futures that turned into thelaunching pad last Wednesday.

Good Trading,
Mike Reed

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