TradeStalker's
R.B.I. Trader's Update
6 / 18 / 2008
(Published Since 1996)
...............................................
Dateline: 6:50 pm eastern time, 6/18/2008
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The market gapped down on Wednesday and the SP futures
bounced from 1343.50 (which was one point over the 1342.50
support) to 1348.50. However, the bounce was sold and the
market continued to sell off until reaching the 1336.50
support on the SP futures and the 1952.50 level on the
Nasdaq futures. Buyers stepped to the plate and the market
turned back up. After breaking through the 1342.50-1343.00
zone, it held on a pullback, and then the SP futures
sprinted to 1348.00. That was at the updated 1348-1349
resistance zone, and after getting there the move was
quickly reversed. A pullback held at 1343.00, but only
bounced to 1345.50 before rolling over again. The SP futures
then broke through that 1343.00-1342.50 zone and kept going
until the market tested/broke its early lows. The SP futures
reached 1335.00 and then bounced back, leaving a double
bottom on the charts. However, the move lost its gusto and
was sold off one more time. The averages all held their
ground, and around 2 pm the market reversed back to the
upside. The SP futures reached 1346.50 with about 30 minutes
left in stock trading, and then the market backed off with
the SP futures dropping 8.50 points to 1338.00 in the final
minutes of trading.
Back and forth action was expected on Wednesday and despite
the narrowest trading range for the SP futures all month
(just 13.20 points on the big contract), there was a lot of
swings both ways to take advantage of. Below are the SP
(maxi) and mini Nasdaq intraday swings on Wednesday:
SPU8 DIFF NQU8 DIFF
1343.50 1969.00
1348.20 +4.70 1975.25 +6.25
1336.50 -11.70 1952.50 -22.75
1348.00 +11.50 1978.50 +26.00
1335.10 -12.90 1954.75 -23.75
1341.50 +6.40 1966.25 +11.50
1335.00 -6.50 1954.25 -12.00
1346.50 +11.50 1973.25 +19.00
1338.10 -8.10 1959.25 -14.00
That's a travel range of 66.50 points on the SP futures and
135.25 points on the Nasdaq futures, so intraday volatility
was alive on Wednesday. That kind of action within narrow
daily ranges was called "tension on the tape" in the old
days, meaning the market is getting ready for a sizable move
to begin soon.
On Thursday we get the Initial Claims before the open and
then the Leading Indicators at 10 am. Those could be an
excuse for the market to break out of the Wednesday ranges.
For now, the market is in "short bounces" mode, and will
stay that way unless/until the 1346.50 level on the SP
futures and the 1973.50 level on the Nasdaq futures are
exceeded. The market must get over those afternoon highs and
not quickly reverse, to get anything going on the upside. On
the bottom side, the afternoon double bottoms need to be
broken and held, to get the ball rolling on the downside. If
that occurs, then we could easily see the 1333.25 low from
June 12th reached, and could spill towards the 1326.50-
1326.00 area for a big test of the market's strength, or
weakness.
If there is early strength on Thursday and the market
stalls/reverses below the 1346.50 level on the SP futures
and the 1973.50 level on the Nasdaq futures, then it should
set up a good trade on the short side in the early going.
Thereafter, another drop must hold the initial support
zones. If those are broken and the market doesn't quickly
reverse, then we could go for that 1326.50-1326.00 area on
the SP futures.
The initial resistance is at the 1346.00-1346.50 area on the
SP futures and the 1972.75-1973.25 area on the Nasdaq
futures. If the market pops up there early and the move
reverses, then it should set up a shorting opportunity.
However, if the market gets up there and doesn't show any
sign of turning, then the 1351.50-1352.00 area on the SP
futures and the 1978.50-1979.50 area on the Nasdaq futures
could be magnets. If the market gets there and doesn't back
off, then the big hurdles on Thursday are at the 1355.50-
1356.00 area on the SP futures and the 1985.25-1986.75 area
on the Nasdaq futures. If those are exceeded, then we could
see the SP futures move up to the 1360.75-1361.50 area.
The initial support is at the 1335.50-1334.75 area on the SP
futures and the 1952.50-1951.75 area on the Nasdaq futures.
If those are broken, then the 1333.25 level on the SP
futures and the 1948.50 level on the Nasdaq futures would be
next. If the market doesn't bounce off of those levels, then
we could be going towards the 1326.50-1326.00 area on the SP
futures and the 1938.25-1937.50 area on the Nasdaq futures.
If the market doesn't hold those areas, then the door is
open for a move down towards the 1320.50-1319.50 area on the
SP futures and the 1920.50-1919.50 area on the Nasdaq
futures. If those are broken, then the SP futures could drop
another 10 points fast and reach the 1310.00-1309.50 area
before a bounce begins.
September 2008 SP futures resistance
symbols: emini = esu8 / big contract =spu8
1346.00-1346.50
1351.50-1352.00
1355.50-1356.00
1360.75-1361.50
September 2008 SP futures support
symbols: emini = esu8 / big contract =spu8
1335.50-1334.75
1333.25
1326.50-1326.00
1320.50-1319.50
1310.00-1309.50
September 2008 Nasdaq futures resistance
symbols: emini = nqu8 / big contract = ndu8
1972.75-1973.25
1978.50-1979.50
1985.25-1986.75
September 2008 Nasdaq futures support
symbols: emini = nqu8 / big contract = ndu8
1952.50-1951.75
1948.50
1938.25-1937.50
1920.50-1919.50
September 2008 Dow futures resistance
symbols: emini = ymu8
12089-12091
12148-12153
12183-12187
September 2008 Dow futures support
symbols: emini = ymu8
11998-11993
11979
11904-11897
11818-11815
September 2008 Russell futures resistance
symbols: emini = er2u8 / big contract = er2u8
733.30-733.80
736.10-736.80
739.00-739.40
September 2008 Russell futures support
symbols: emini = er2u8 / big contract = er2u8
729.10-728.20
725.50
722.50-722.10
716.50-716.00
---------------------------
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Good Trading,
Mike Reed
Copyright (c) 2008 by TradeStalker.com, Ft Wayne, IN.
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Past performance does not guarantee future performance.
The foregoing has been prepared solely for informational
purposes and is not a solicitation, or an offer to buy
or sell any security. Opinions are based on historical
research and data believed reliable, but there is no
guarantee that future results will be profitable.
We are not advocating trading futures. The prices and
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in which you could trade. We occasionally mention the
SP500 and Nasdaq futures markets because it is
extremely liquid and tends to lead the other markets.
This is not an endorsement or recommendation of the SP500
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is substantial. You can lose more than your original
investment. We are not Registered Investment Advisors or
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