TradeStalker's
R.B.I. Trader's Update
9 / 17 / 2008
(Published Since 1996)
...............................................
Dateline: 6:52 pm eastern time, 9/17/2008
The market opened 23 points lower on the SP futures on
Wednesday and the move was quickly reversed. Off of a
1185.75 low, the SP futures rallied back to the pivotal 1200
level on the SP futures and the move stalled out and rolled
over. The drop took the SP futures to 1164.50 and then the
market bounced back. The updated resistance at 1182 was
tested, but the move stalled out at that resistance and the
market rolled over to make a double bottom on the SP
futures. The market got its legs and rallied to 1191.50 on
the SP futures and then a pullback followed. It held just
over the 1177-1176 updated support on the SP futures and the
1666 support on the Nasdaq futures and then reversed and
rallied to 1193.75 on the SP futures and to 1692.00 on the
Nasdaq futures. That move fizzled and the market couldn't
hold the 1177-1176 area and the downside accelerated. The
selling easily took out the double bottom at 1164 on the SP
futures and continued falling until reaching its 1158.00-
1157.00 support zone at the 4 pm close for stocks. The
futures rallied back a bit and the SP futures settled about
5 points above fair value.
The technical damage continues to worsen. However, at long
last some of my internal gauges are getting to extreme
oversold territory. Oddly enough, this is the first time
since the July low that the market has been this oversold on
my internal indicators. The VIX spiked above 36 on
Wednesday, closing up 19% on the day. In addition, the 10
day average range has stretched to 3.15% and over the 3%
that was expected. Big volatility on an intraday basis is
often seen near market lows, just as low volatility at the
end of a rally often precedes a top. So, the fumes are in
the air for a good bounce soon. What is needed is something
good to spark the buying.
At the moment we don't have that "something good" anywhere
yet. The market ended Wednesday in free-fall, dropping 36.50
points on the SP futures and 52.25 points on the Nasdaq
futures in the last hour. The support at the 1158-1157 area
was tagged and the futures rallied into the close. If there
is a lower open on Thursday, it would likely set up a buying
opportunity if there is a reversal in the first 20 minutes
of trading. Thereafter, shorting the first decent bounce as
soon as it fizzles should offer the better odds set-up as it
is with the current trend. Also, there's a chance of
dropping
to the low 1100's on this leg down.
Look for resistance at the 1170.00-1170.50 area on the SP
futures and the 1664.50-1665.50 area on the Nasdaq futures.
If those are reached and the move stalls out, it's a good
shorting opportunity. The next hurdles would be at the
1181.00-1182.00 area on the SP futures and the 1678.00-
1679.00 area on the Nasdaq futures. If a move back to that
area isn't sold, then there should be strong resistance at
the 1193.50-1194.00 area on the SP futures and the 1691.00-
1692.00 area on the Nasdaq futures. A break over those must
not be quickly reversed like on Wednesday, otherwise it's
just a better shorting opportunity.
The initial support is at the 1158.00-1157.00 area on the SP
futures and the 1640.50-1639.75 area on the Nasdaq futures.
If the market cannot hold those areas, then look for a drop
towards the 1147.50-1146.50 and 1628.00-1626.50 areas. If
those are broken, then there should be some support near the
1134.00-1133.00 area on the SP futures and the 1612.00-
1610.00 area on the Nasdaq futures. If those show no
support, then the 1113.00-1112.00 area on the SP futures and
the 1584.00-1582.00 area on the Nasdaq futures is a minor
support area. The next big support zone would be at the
1108.00-1107.00 area on the SP futures. If the market drops
that far, and still cannot turn back up, then we could be
going for the 1078-1076 area on the SP futures which would
be a major support area.
December 2008 SP futures resistance
symbols: emini = esz8 / big contract =spz8
1170.00-1170.50
1181.00-1182.00
1193.50-1194.00
December 2008 SP futures support
symbols: emini = esz8 / big contract =spz8
1158.00-1157.00
1147.50-1146.50
1134.00-1133.00
1113.00-1112.00
1108.00-1107.00
1078.00-1076.00
December 2008 Nasdaq futures resistance
symbols: emini = nqz8 / big contract = ndz8
1664.50-1665.50
1678.00-1679.00
1691.00-1692.00
December 2008 Nasdaq futures support
symbols: emini = nqz8 / big contract = ndz8
1640.50-1639.75
1628.00-1626.50
1612.00-1610.00
1584.00-1582.00
December 2008 Dow futures resistance
symbols: emini = ymz8
10694-10699
10803-10809
10908-10914
December 2008 Dow futures support
symbols: emini = ymz8
10598-10590
10504-10498
10360-10352
10247-10240
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http://www.tradestalker.com/members
---------------------------
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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