Market Comment 04/17/07 - Nightly Update

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TradeStalker's
R.B.I. Trader's Update
4/17/2007
(Published Since 1996)
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Dateline: 6:03 pm eastern time, 4/17/2007

The market gapped up again on Tuesday's open, but this timethe gap was smaller and after tagging 1479.00, the move wassold. The gap was easily filled, reaching 1475.00 on the SPfutures and 1842.75 on the Nasdaq futures and then buyersstepped to the plate and the market rallied back. The markettested the resistance at the 1481.50-1482.75 area on the SPfutures and the 1850.50-1852.50 area on the Nasdaq futuresand after the SP futures backed off 2.50 points, they turnedright back up and moved to a 1482.75 high. That area wasrejected again and the market finally pulled back into earlyafternoon. After reaching 1476.50 on the SP futures, buyersstepped in and the market was able to rebound over the nexthour. Things got very choppy as the market closed mixed forthe day.

The loss of upside momentum, along with too bullishsentiment, might have limited the upside here short term.Right now the market appears to be at a crossroad and wewant to see everything break out of the small range beforebeing too aggressive on either side. It will take a decisivebreak through the first resistance to areas to get themarket going on another decent run-up. On the bottom side,it would take a break and hold under the Tuesday low areasto get the market into a short term downtrend.

That said, if there is a lower open and the market getsfooting and reverses at/near the 1475.50-1475.00 area on theSP futures and the 1843.00-1842.25 area on the Nasdaqfutures, it should set up a decent snap-back rally. If thatdoesn't occur and that support doesn't hold, then the trendscould be rolling over and selling the bounces that fizzlewould offer the better setups.
Due to the split market up here, the resistance and supportmay not line upon Wednesday. However, the most importantareas / levels are listed.

The first resistance is at the 1482.00-1482.75 area on theSP futures and the 1852.50-1853.50 area on the Nasdaqfutures. Those were heavy lids overhead on Tuesday and nowshould become key resistance areas. If those are tested andthe move fizzles again, then it's another good shortingopportunity. However, if those are exceeded and the marketdoesn't quickly reverse, then look for minor resistancearound the 1486.00 and 1857.50 levels. If those are not aproblem, then a move to the 1492.00-1494.00 area on the SPfutures and the 1864.00-1867.00 area on the Nasdaq futureswould be targets for a top in this timeframe, if it wasn'tseen already on Tuesday.

The first key support is at the 1475.50-1475.00 area on theSP futures and the 1843.00-1842.25 area on the Nasdaqfutures. If those are exceeded and the market doesn't snapright back, then things could be changing short term. Thenext good support would be around the 1470.25-1469.75 areaon the SP futures and the 1838.50-1837.50 area on the Nasdaqfutures. If those are reached and not bought, then the1466.75 and 1832.50 levels would be the last spots for aturn until the gaps fill.

Good Trading,
Mike Reed