TradeStalker's
R.B.I. Trader's Update
9 / 23 / 2008
(Published Since 1996)
...............................................
Dateline: 6:27 pm eastern time, 9/23/2008
We wanted to short early strength on Tuesday and the SP
futures made a double top at 1222.50 and turned down. The
1206-1205 support held on the pullback, and the market
bounced back a bit but selling came in and the market broke
the Monday lows. The SP futures dropped to the 1187-1186
area where we were looking for a reversal. That occurred and
the SP futures rallied back to the updated 1214 resistance
area. The move formed a rising wedge pattern, and after
reversing from 1214.50 the wedge broke around 2:20pm and the
market broke down sold off to the lows in the last few
minutes of trading.
This is a once in a generation type of market environment,
and the best way to survive and hopefully thrive is to not
worry about a missed move, number one. There will be another
trade setting up soon thereafter. Number two, enter at the
extremes as soon as the momentum stalls out. Third, do not
overstay your welcome on either side. Last, it's a good idea
with this volatility to cut back your position size and
allow a bit wider stop/loss. So, with that, back to the
action.
Last night I warned of a lot of volatility ahead, and felt
that we would get some big swings in both directions this
week. The Tuesday action didn't disappoint as the market
made good moves both ways. The market ended the day badly,
but after hours the market up quite a bit. On Wednesday look
for a shorting opportunity if this move holds just as soon
as the upside stalls out and/or reverses. If instead there
is early weakness, look for a reversal in the first 20
minutes or so to set up a trade on the long side.
Thereafter, unless there is a move over the 1214.00-1214.50
area on the SP futures and the 1692.00-1692.75 zone on the
Nasdaq futures that sticks, the downtrends will be intact
and the rallies will set up good shorting opportunities as
soon as the upside fizzles out.
There should be some resistance at the 1209.50-1210.00 area
on the SP futures and 1672.50-1674.00 area on the Nasdaq
futures. If those are cleared, then the first big hurdles
are at the 1214.00-1214.50 area on the SP futures and
1692.00-1692.75 area on the Nasdaq futures. If the market
gets back up there and doesn't reverse, then the next good
resistance would be at the 1222.00-1222.50 area on the SP
futures and 1700.50-1701.75 area on the Nasdaq futures. If
the market gets back up there, and it doesn't turn back
down, then the market might be changing from bearish to
bullish. The next good resistance would be at the 1232.50-
1233.00 area on the SP futures and 1712.50-1713.50 area on
the Nasdaq futures.
The initial support is at the Tuesday lows, at the 1186.00-
1185.50 area on the SP futures and 1648.00-1647.00 area on
the Nasdaq futures. If those are broken, and the market
doesn't quickly reverse back to the upside, then the door is
opened for a drop towards the 1178.50-1178.00 area on the SP
futures and 1638.50-1636.50 area on the Nasdaq futures. If
the market gets hit that hard early, be alert for a
reversal. If the market gets down there and can not turn up
and rally with gusto, then the market could be weak enough
to fall towards the 1166.00-1165.00 area on the SP futures
and 1622.50-1620.75 area on the Nasdaq futures. If those do
not hold, then the 1162.00-1161.00 area on the SP futures
and 1614.00-1612.50 area on the Nasdaq futures will need to
stop the bleeding, otherwise the door will open for a drop
towards the 1149.00-1148.00 and/or 1600.50-1599.00 zones
before a rebound occurs. If those do not hold then the odds
of testing the 1136 low on the SP futures will be good
before a reversal occurs.
December 2008 SP futures resistance
symbols: emini = esz8 / big contract =spz8
1209.50-1210.00
1214.00-1214.50
1222.00-1222.50
1232.50-1233.00
1241.25-1242.25 -- key if a melt-up move
December 2008 SP futures support
symbols: emini = esz8 / big contract =spz8
1186.00-1185.50
1178.50-1178.00
1166.00-1165.00
1162.00-1161.00
1149.00-1148.00
1136.00
December 2008 Nasdaq futures resistance
symbols: emini = nqz8 / big contract = ndz8
1672.50-1674.00
1692.00-1692.75
1700.50-1701.75
1712.50-1713.50
1727.50-1728.50 - key if melt-up
December 2008 Nasdaq futures support
symbols: emini = nqz8 / big contract = ndz8
1648.00-1647.00
1638.50-1636.50
1622.50-1620.75
1614.00-1612.50
1600.50-1599.00
December 2008 Dow futures resistance
symbols: emini = ymz8
11122-11127
11058-11062
11140-11145
11233-11238
December 2008 Dow futures support
symbols: emini = ymz8
10838-10831
10771-10766
11645-11638
10607-10603
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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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