Market Comment 04/04/07 - Nightly Update

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TradeStalker's
R.B.I. Trader's Update
4/4/2007
(Published Since 1996)
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Dateline: 6:22 pm Eastern time, 4/4/2007

The market opened flat on Wednesday and then broke the initial support on the SP futures. The market did not accelerate however and instead the action turned very choppy. A move up to test the 1450.00 level on the SP futures was rejected and the market pulled back in the early afternoon. The market refused to break and managed a small rebound into the close.

Expect the conditions to thin out after the early going on Thursday. The narrow range day after a big run-up has been the start of most of the sharp drops recently. We tend to get a lot of volatility near bottoms and just the opposite at market tops. If the market just spins its wheels again on Thursday, it could set the stage for another big move.

The bias into the holiday is normally up, but there has been a real hesitation to run through the 1450.00-1451.00 area on the SP futures. If that area can finally be exceeded and there is not a quick reversal, then there could be another 10 SP points to go on the upside before the market gets turned back. On the other side of the coin, if the Dow goes back under 12500 and cannot quickly reverse, then we could have a double top in place and see the market retrace a good deal of this week's gains.

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