TradeStalker's
R.B.I. Trader's Update
9 / 24 / 2008
(Published Since 1996)
...............................................
Dateline: 7:34 pm eastern time, 9/24/2008
The market opened higher on Wednesday but the early strength
was sold and the SP futures dropped from 1194.25 to 1182.25
in the first 40 minutes of trading. The downdraft was
reversed and the SP futures rallied to 1195.00 before
reversing. A range trade followed and then the market broke
out on the upside. The SP futures reached 1198.75 and pulled
back, and then the next bounce made a slightly lower high
and then reversed. The 1-2-3 top started a drop to the
1188.00 level, and that set up a short if the next bounce
stalled/reversed from under 1200 on the SP futures. They ran
up to 1198.00 and stalled out, and then reversed and fell
almost 18 points to a 1180.25 low. With just 10 minutes left
in stock trading the futures took off to the upside and they
settled well above fair value.
Neither side would stick on Wednesday as the market made a
number of tradable moves in both directions. As stated last
night, just wait for a move to run out of steam and stall
out to go the other way. If you followed that advice,
finding a good trade opportunity wasn't too difficult. The
swings of 5 or more points on the big SP futures contract
and the corresponding swings on the mini Nasdaq futures are
in the table below.
09/23/08 1186.00 1650.25
09/24/08 1194.00 8.00 1664.75 14.50
09/24/08 1182.50 -11.50 1650.50 -14.25
09/24/08 1195.00 12.50 1674.75 24.25
09/24/08 1184.50 -10.50 1661.50 -13.25
09/24/08 1192.50 8.00 1672.25 10.75
09/24/08 1183.20 -9.30 1656.75 -15.50
09/24/08 1198.50 15.30 1682.00 25.25
09/24/08 1187.50 -11.00 1666.50 -15.50
09/24/08 1197.50 10.00 1682.00 15.50
09/24/08 1188.00 -9.50 1665.00 -17.00
09/24/08 1193.00 5.00 1676.00 11.00
09/24/08 1184.00 -9.00 1653.75 -22.25
09/24/08 1192.00 8.00 1667.00 13.25
09/24/08 1180.00 -12.00 1651.00 -16.00
09/24/08 1193.50 13.50 1674.75 23.75
The SP futures had buyers at the 1182.00-1180.00 area and
the Nasdaq futures held the 1651.00-1650.00 area both early
and late on Wednesday. However, they were sold at the
1197.50-1198.75 area on the SP futures and the 1682.00-1684
area on the Nasdaq futures. A breakout of those ranges that
sticks, and doesn't instantly reverse like they did on
Wednesday, is needed to have a chance of getting a decent
directional move going. Unless that occurs, it will continue
to be a "buy the dips, short the bounces" at the extremes as
soon as the move runs out of steam and stalls out.
On Thursday we get the Initial Claims before the open. Then
look for a shorting opportunity if there is a pop that fails
near the initial resistance areas. However, if the market
gets through those areas and doesn't quickly reverse, then
buying the pullbacks will likely play out. On the other side
of the coin, if there is early weakness and it can hold and
then turn up from the initial support areas, then it will
set up a trade on the long side. Aside from that, look to
get involved only at the extremes and as soon as the move
gasses out. This has worked very well lately, especially on
the short side.
The initial resistance is at the 1197.50-1198.50 area on the
SP futures and the 1682.00-1683.00 area on the Nasdaq
futures. If the market can get through both of those areas
and not quickly back off, then we could get a decent rally.
If that occurs, then we could see the market rally towards
the 1209.50-1210.00 area on the SP futures and the 1692.00-
1692.75 area on the Nasdaq futures. If the market gets that
far, be alert for a reversal. If that doesn't happen, then
the market could try for the 1214.00-1214.50 area on the SP
futures and the 1700.50-1701.75 area on the Nasdaq futures.
If the market gets up there, and the rally stalls out, then
beware of a decent pullback off of those areas. If those
areas are reached and they keep on going, then something
good happened and we could see the move extend towards key
resistance at the 1222.00-1222.50 area on the SP futures and
the 1710.50-1712.25 area on the Nasdaq futures.
The initial support is at the 1184.50-1184.00 area on the SP
futures and the 1662.00-1661.00 area on the Nasdaq futures.
If those areas are reached and the market turns back up,
then it could start a good rally. If those areas are broken,
then a test of the 1180.50 level on the SP futures and the
1652.50 level on the Nasdaq futures would need to hold. If
those are broken, there is minor support at the 1178.50-
1178.00 area on the SP futures and the 1647.50-1646.50 area
on the Nasdaq futures that could cause a reversal. However,
if those areas are broken, then the door is open to slide
down towards the 1173.00-1172.00 area on the SP futures and
the 1638.50-1636.50 area on the Nasdaq futures. If the
market doesn't reverse from those areas, then the 1166.00-
1165.00 area on the SP futures and the 1622.50-1620.75 area
on the Nasdaq futures could be in the cards. If those are
not able to hold, then the 1162.00-1161.00 area on the SP
futures and the 1614.00-1612.50 area on the Nasdaq futures
would be all that's in the way of a bad day on the downside.
December 2008 SP futures resistance
symbols: emini = esz8 / big contract =spz8
1197.50-1198.50
1209.50-1210.00
1214.00-1214.50
1222.00-1222.50
December 2008 SP futures support
symbols: emini = esz8 / big contract =spz8
1184.50-1184.00
1180.50
1178.50-1178.00
1173.00-1172.00
1166.00-1165.00
1162.00-1161.00
December 2008 Nasdaq futures resistance
symbols: emini = nqz8 / big contract = ndz8
1682.00-1683.00
1692.00-1692.75
1700.50-1701.75
1710.50-1712.25
December 2008 Nasdaq futures support
symbols: emini = nqz8 / big contract = ndz8
1662.00-1661.00
1652.50
1647.50-1646.50
1638.50-1636.50
1622.50-1620.75
1614.00-1612.50
December 2008 Dow futures resistance
symbols: emini = ymz8
10919-10924
11022-11027
11058-11062
11140-11145
December 2008 Dow futures support
symbols: emini = ymz8
10788-10784
10750
10735-10730
10674-10669
11645-11638
10587-10583
---------------------------
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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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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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