Market Comment 03/29/07

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TradeStalker's
R.B.I. Trader's Update
3/29/2007
(Published Since 1996)
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Dateline: 6:22 pm Eastern time, 3/29/2007

The market gapped up on Thursday, but the open was a "fade"and the market pulled back. The first bounce reversed from1436.50 and it was steadily downhill from there untilreaching 1423.00 on the SP futures around 2 pm. The marketpopped up, then came back to make a higher low beforegetting a choppy rally going. The market moved higher intothe last 30 minutes, but turned down and closed on the softside.

On Friday we get the Chicago PMI just 15 minutes into theday, then Michigan Sentiment report revised at 10 am. Themarket has really been on a roller-coaster ride lately, withsome very good trading opportunities. The trading rangeshave really widened out and the Thursday lows should be keynow short term. The late move off of the 1423.00 level onthe SP futures, 1770.25 on the Nasdaq futures, and 796.80level on the Russell futures will need to hold on anotherdrop, and they should hold short term. The VIX gave a coupleof buy signals at Thursday's close,and Friday ends thequarter. If those are tested, and the market doesn't getturned around, then we could end the quarter with a mini-panic.

On Friday be on the lookout for more two-sided action. Ifthere is early strength and it fizzles around initialresistance, it would make a good shorting opportunity. Onthe flip side, if there is a test of the Thursday lows, thatcould set up a good buying opportunity IF the move flattensout after a few probes and then turns back up. Aside fromthat, the upside appears to be limited. If there is a strongrally, then the 1442.00-1442.50 area on the SP futures couldbe a spot where another decent swing trade on the short sidesets up.

The first hurdles would be at the 1434.50 level on the SPfutures and the 1792.75 level on the Nasdaq futures. Ifthose are not a problem, then there should be pretty strongresistance at the 1436.50-1437.50 area on the SP futures andthe 1800.00-1801.50 area on the Nasdaq futures. If there isa good move up, be on the lookout for a shorting opportunityaround the 1442.00-1442.50 area on the SP futures and the1814.00-1814.75 area on the Nasdaq futures.

Look for support at the 1427.50-1426.75 area on the SPfutures and the 1777.00-1776.00 area on the Nasdaq futures.If those are not held, then we could test Thursday's lows atthe 1423.00 level area on the SP futures and the 1770.25level on the Nasdaq futures. If those are NOT able to hold,then things could turn ugly. Watch the 1421.00 level on theSP futures for a potential turn-around. If that levelbreaks, the next decent support should be found around the1418.50-1417.75 area on the SP futures and the 1764.50-1762.50 area on the Nasdaq futures.

Good Trading,

Mike Reed
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