Market Comment 04/16/07 - Nightly Update

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TradeStalker's
R.B.I. Trader's Update
4/16/2007
(Published Since 1996)
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Dateline: 5:56 pm eastern time, 4/16/2007

The market gapped up on Monday, but after 20 minutes oftrading, the SP futures backed away from a 1472.25 highwhile the 1843.75-1844.50 area on the Nasdaq futures wassold. The pullback held at 1470.00 on the SP futures andthen the market averages tested the early highs and backedoff again. The market was able to hold ground around the1470.20-1469.75 area on the SP futures again and the SP500cash rallied to new highs for the year by early afternoon.After reaching 1477.25 on the SP futures, the market backedup again and broke thru the updated support areas. However,the market turned itself right back around and more buyingtook the market back to test its highs by the close.

We get the CPI and Housing Starts before the open on Tuesdayand then Industrial Production and Capacity Utilizationnumbers at 9:15 am. The move into new yearly high ground bythe SP500 cash hasn't been confirmed by the other averages.It was good that the Nasdaq perked up late in the day andfinished the strongest amongst the averages. The bad new isthat some of the internal gauges have gotten overbought(like the 3 day thrust up at +.67). In addition, the SPfutures settled about 1.50 points under fair value.

The Monday afternoon lows are looking key on the very shortterm. On the SP futures, the 1473.50-1473.00 area alignswith the 60 period ema on the 5 minute chart (and/or 20 emaon 15 minute chart). As long as buyers step to the plate ona pullback to those areas, things should be okay. However,if those Monday afternoon low areas are broken and themarket cannot quickly get itself turned back up, then wecould be rolling over short term.

On Tuesday, look for resistance at the 1477.00-1477.75 areaon the SP futures and the 1850.50-1852.50 area on the Nasdaqfutures. If those are cleared and the market doesn't quicklyreverse back down, then we could head for the 1481.50-1482.75 area on the SP futures and the 1857.50-1859.00 areaon the Nasdaq futures.

The initial support is at the 1473.50-1473.00 area on the SPfutures and the 1843.25-1842.25 area on the Nasdaq futures.If there is a hold below those areas, then look for decentsupport at the 1470.25-1469.75 area on the SP futures andthe 1838.50-1837.50 area on the Nasdaq futures. If those arenot bought, then look for a test of the 1466.75 level on theSP futures and/or the 1832.50 level on the Nasdaq futures.

Good Trading,
Mike Reed