TradeStalker's
R.B.I. Trader's Update
6 / 22 / 2008
(Published Since 1996)
...............................................
Dateline: 5:36 pm eastern time, 6/22/2008
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The market gapped down on Friday and dropped steadily for
the first 40 minutes of trading. A bounce back fizzled and
after the 1328.50 level was broken, the selling was
persistent into the last hour of trading. The SP futures
reached 1315.25 while the Nasdaq futures fell to 1927.50 and
then a feeble bounce lifted the market a bit before the
close.
The SP500 cash has made 5 waves down on the daily "line-on-
close" chart. If the market doesn't get turned around very
soon, then a drop to the 1302 level on the SP futures is
possible. The first leg off the top was 70 points on the SP
futures. If this leg down is equal to the first leg, that
would target 1302 for a low.
In any case, the market should be close to a trading low.
The last week of the month, and quarter, has an upside bias.
In addition to that, the internal gauges I keep are getting
very oversold. My 4 day thrust is at -.53, the 4 day volume
ratio is a miniscule .33, and short term breadth oscillators
are also at extremes. These can lag for a day sometimes, but
it is a heads-up that a reversal to the upside should be
coming soon. If that happens and we get an up-down-up
pattern to the 1372-1374 area on the SP futures over the
next week, it could set the stage for a very sharp drop.
We'll see about that if we get there.
On Monday look for early weakness to reverse to set up a
trade on the long side. If that plays out, the first decent
bounce will likely set up a shorting opportunity as long as
the initial resistance zones are not cleared. It takes a
break of the initial resistance zones, that can then hold on
a pullback, to turn the short term trends back up.
The initial resistance is at the 1323.00-1323.50 area on the
SP futures and the 1949.50-1950.25 area on the Nasdaq
futures. If the market doesn't fail there, then the upside
could get in gear. The next hurdles would be at the 1329.50-
1330.25 area on the SP futures and the 1958.25-1959.50 area
on the Nasdaq futures. If those are not a problem, then a
move towards the 1336.50-1337.00 area on the SP futures and
the 1974.00-1975.50 area on the Nasdaq futures would be key
resistance. If a rally gets that far and there is no
stopping it, then the 1344.50 level on the SP futures and
the 1994.50 level on the Nasdaq futures would be next. If
the market goes into a melt-up move, then the next good
resistance is near the 1349.75 level on the SP futures and
the 2001.75 level on the Nasdaq futures.
The initial support is at the 1316.00-1315.50 area on the SP
futures and the 1932.50-1931.75 area on the Nasdaq futures.
If those are not quickly reversed, then the door is open for
one more sharp sell-off before a bottom forms. A move to the
1309.50-1308.50 area on the SP futures and the 1920.50-
1919.25 area on the Nasdaq futures that reverses should set
up a trade on the long side. However, if the market gets
down there and keeps going, then a reversal must occur from
the 1303.00-1302.00 area on the SP futures and the 1901.00-
1899.75 area on the Nasdaq futures, otherwise we could have
a mini-crash under way.
September 2008 SP futures resistance
symbols: emini = esu8 / big contract =spu8
1323.00-1323.50
1329.50-1330.25
1336.50-1337.00
1344.50
1349.75
September 2008 SP futures support
symbols: emini = esu8 / big contract =spu8
1316.00-1315.50
1309.50-1308.50
1303.00-1302.00
September 2008 Nasdaq futures resistance
symbols: emini = nqu8 / big contract = ndu8
1949.50-1950.25
1958.25-1959.50
1974.00-1975.50
1994.50
2001.75
September 2008 Nasdaq futures support
symbols: emini = nqu8 / big contract = ndu8
1932.50-1931.75
1920.50-1919.25
1901.00-1899.75
September 2008 Dow futures resistance
symbols: emini = ymu8
11875-11882
11952-11957
11999-12004
12068
12115
September 2008 Dow futures support
symbols: emini = ymu8
11820-11816
11758-11752
11711-11708
September 2008 Russell futures resistance
symbols: emini = er2u8 / big contract = er2u8
728.00-728.40
732.20-732.80
738.10-738.40
743.40
748.00
September 2008 Russell futures support
symbols: emini = er2u8 / big contract = er2u8
718.90-718.40
714.20-713.90
709.70-709.40
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---------------------------
Good Trading,
Mike Reed
Copyright (c) 2008 by TradeStalker.com, Ft Wayne, IN.
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Disclaimer
The financial markets are risky. Investing is risky.
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
contracts in the TradeStalker Updates specify a manner
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
and Nasdaq futures markets. The risk of loss in futures
is substantial. You can lose more than your original
investment. We are not Registered Investment Advisors or
Commodity Trading Advisors.
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