TradeStalker's
R.B.I. Trader's Update
8 / 14 / 2008
(Published Since 1996)
...............................................
Dateline: 7:23 pm eastern time, 8/14/2008
The market opened lower on Thursday, just above the
Wednesday low on the SP futures, and then immediately turned
up. That was the start of a rally that took the SP futures
all the way to 1300.75, just under the key 1301.50 level,
and then there was a pullback. The 1293.50-1292.50 area
acted as support, but when it was broken the downside picked
up steam. The first bounce formed a slinky at a "last
trapped" area, peaking at 1292.75 on the SP futures before
rolling over and falling to 1288.75. After a bounce back to
1292.75, the SP futures went back down to 1288.75 with about
an hour left in the trading day, and then bounced back a bit
into the close.
The market took "bad news" and rallied from the open on
Thursday. That's the good news. The rejection of the 1300
level on the SP futures and subsequent drop of 12 points
keeps the market in the trading range, however. In addition,
the Thursday rally occurred on very light volume on the
NYSE. The sum of the up volume plus down volume was the
lowest since the July 3rd late December 2007 pre-holiday
trading. Rallies on light volume are suspect in most cases.
On those two occasions the market was much lower the week
after the low volume session.
The internal indicators are also at a spot where the market
should begin a sizable move. Each push higher has had less
momentum than the prior move internally. On the daily chart,
a close under 1285 on the SP500 cash would be a negative
sign. With that said, on Friday or possibly Monday, if there
is a rally back to 1300 or higher, but it doesn't exceed
1313.50 and the move is reversed, then a decent sized
selloff should occur.
We could get back there on Friday if things hold up. The
futures closed above fair value on Thursday and the 1288.75
level was held twice late day, so that support needs to hold
early on Friday. If there is an early pullback that holds
the initial support, then it sets up a trade on the long
side. If that plays out, be on alert for a reversal as soon
as the upside stalls out and reverses. If there is early
strength instead, then still look to short as soon as any
upside fizzles. If the NYSE breadth is not better than 2 to
1 on the plus side, then odds will be good that a rally will
not hold.
There is minor resistance at the 1297.00-1297.50 area on the
SP futures and the 1969.00-1969.50 area on the Nasdaq
futures. If those are not reversed, then we should see the
1301.25-1301.75 and 1974.75-1975.50 areas tested. If those
are reached and the move doesn't reverse, then a push
towards the 1306.50-1307.00 area on the SP futures and/or
the 1979.50-1980.50 area on the Nasdaq futures is likely in
the cards. A rally shouldn't exceed those levels if the
market is going to top out near term.
There should be good support at the 1289.00-1288.50 area on
the SP futures and the 1960.25-1958.75 area on the Nasdaq
futures. Those will hold if the market is in good shape. If
those are broken, then it could begin a decent drop. The
next support is at the 1285.00-1284.50 area on the SP
futures and the 1949.50-1948.50 area on the Nasdaq futures.
If the market cannot hold those areas, then the major
support short term is at the 1275.25-1274.50 area on the SP
futures and the 1933.50-1932.00 area on the Nasdaq futures.
September 2008 SP futures resistance
symbols: emini = esu8 / big contract =spu8
1297.00-1297.50
1301.25-1301.75
1306.50-1307.00
September 2008 SP futures support
symbols: emini = esu8 / big contract =spu8
1289.00-1288.50
1285.00-1284.50
1275.25-1274.50
September 2008 Nasdaq futures resistance
symbols: emini = nqu8 / big contract = ndu8
1969.00-1969.50
1974.75-1975.50
1979.50-1980.50
September 2008 Nasdaq futures support
symbols: emini = nqu8 / big contract = ndu8
1960.25-1958.75
1949.50-1948.50
1933.50-1932.00
September 2008 Dow futures resistance
symbols: emini = ymu8
11657-11660
11718-11723
11762-11766
September 2008 Dow futures support
symbols: emini = ymu8
11579-11576
11546-11542
11446-11442
September 2008 Russell futures resistance
symbols: emini = er2u8 / big contract = er2u8
757.70-758.10
761.70-762.20
764.20-764.60
September 2008 Russell futures support
symbols: emini = er2u8 / big contract = er2u8
752.00-751.70
748.00-747.60
742.00-741.50
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http://www.tradestalker.com/members
---------------------------
Good Trading,
Mike Reed
Copyright (c) 2008 by TradeStalker.com, Ft Wayne, IN.
TradeStalker Updates may not be redistributed without
permission.
www.TradeStalker.com
PO Box 9783, Ft Wayne, IN, 46899
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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