TradeStalker's
R.B.I. Trader's Update
8 / 6 / 2008
(Published Since 1996)
...............................................
Dateline: 6:23 pm eastern time, 8/6/2008
The market opened lower on Wednesday and sold off to the
1276.00-1275.50 support area on the SP futures before
bouncing back. The bounce didn't have much gusto, but after
stalling for about 20 minutes of churning the market started
moving higher. The move had some trouble after getting to
the 1284.50-1285.00 area on the SP futures. However, the
pullback was small and the market rallied into the last hour
of trading. The SP futures reached the 1291-1292 key
resistance and then stalled out. With a high at the 1291.75
level in place, selling came in and the market softened into
the close.
The market averages posted higher highs than on Tuesday, but
the internal momentum gauges didn't and it leaves bearish
divergences in place. The market has had a very strong rally
over the past few days and the sentiment has gotten too
bullish. The Vix gave sell signals at the Wednesday close.
The weight of the evidence says the market is ready to pull
back, and it could be a sizable move. If I'm wrong, then the
SP futures could still rally towards the 1297.25-1298.25
area. If that occurs, and then the move stalls and/or
reverses, it should set up a better shorting opportunity.
On Thursday look to short the bounces that stall out. If the
market gets back to test the Wednesday highs, it should be a
gift on the short side. Only a reversal off of the 1281.50-
1281.00 zone can save the market from a sizeable drop on
Thursday.
The initial resistance is at the 1291.00-1291.50 area on the
SP futures and the 1906.00-1906.75 area on the Nasdaq
futures. Those should not be exceeded if the market is
vulnerable to a sizable selloff. If those areas are broken
and the market doesn't quickly reverse, then a squeeze
towards the 1297.25-1298.25 area on the SP futures and the
1916.00-1917.00 area on the Nasdaq futures is possible. IF
that occurs and the move stalls out, then it's a great
shorting opportunity with a stop just above those zones.
The initial support is at the 1286.50-1286.00 area on the SP
futures and the 1895.50-1895.00 area on the Nasdaq futures.
If those are broken and not quickly reversed, then it looks
like the 1281.50-1281.00 area on the SP futures and the
1883.00-1881.50 area on the Nasdaq futures would be key
areas that must hold. If the market gets there and doesn't
quickly turn back up, then the 1275.50-1275.00 area on the
SP futures and the 1856.75-1856.00 area on the Nasdaq
futures would be the next support zones. If the market
breaks those areas, then the market will be breaking the
Wednesday lows and that would not be good. If those areas
are tested and the move doesn't slow down and reverse, then
we could go for the 1268.25-1267.75 area on the SP futures
and the 1844.00-1842.75 area on the Nasdaq futures. If those
are broken, then a deeper selloff is in the cards, possibly
heading back towards the 1258-1257 area on the SP futures.
September 2008 SP futures resistance
symbols: emini = esu8 / big contract =spu8
1291.00-1291.50
1297.25-1298.25
September 2008 SP futures support
symbols: emini = esu8 / big contract =spu8
1286.50-1286.00
1281.50-1281.00
1275.50-1275.00
1268.25-1267.75
1258.00-1257.00
September 2008 Nasdaq futures resistance
symbols: emini = nqu8 / big contract = ndu8
1906.00-1906.75
1916.00-1917.00
September 2008 Nasdaq futures support
symbols: emini = nqu8 / big contract = ndu8
1895.50-1895.00
1883.00-1881.50
1856.75-1856.00
1844.00-1842.75
September 2008 Dow futures resistance
symbols: emini = ymu8
11668-11672
11712-11717
September 2008 Dow futures support
symbols: emini = ymu8
11620-11617
11582-11576
11510-11507
11459-11456
September 2008 Russell futures resistance
symbols: emini = er2u8 / big contract = er2u8
728.40-728.80
732.60-733.40
September 2008 Russell futures support
symbols: emini = er2u8 / big contract = er2u8
724.40-724.00
719.10-718.70
713.70-713.40
709.20-708.80
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---------------------------
Good Trading,
Mike Reed
Copyright (c) 2008 by TradeStalker.com, Ft Wayne, IN.
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permission.
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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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