TradeStalker's
R.B.I. Trader's Update
12 / 1 / 2008
(Published Since 1996)
...............................................
Dateline: 6:22 pm eastern time, 12/1/2008
The market was in a tenuous position coming into Monday, and
the divergences and Vix sell signals came home to roost. The
market gapped down on Monday and under the key 880.75-880.25
area on the open, so it was a "short a bounce" market. The
move was basically trend down to the 837.50-836.50 zone. On
the third test, a bounce from 837.50 on the SP futures ran
up to a downsloping 60 period ema on the 5 minute chart and
reversed. The reversal from 849.50 started another leg down
that easily cut through the key 837.50-836.50 zone. That
area was tested three times and that ate away the support,
so the break of that zone opened the spigot and sent the
market lower into the final minutes of trading.
Well, volatility is back and so is the bear. After a loss of
680 points on the Dow, 80 points on the SP500, and almost 95
points on the Nasdaq 100 the market discovered it didn't
like it at the 897.00 resistance reached last Friday. The
VIX jumped 24% to 68.51 on Monday, and the closing Trin was
a whopping 10.13!. That shows a big "get me out" type of
panic move to end the day. When that kind of fear is shown,
the market is normally within 7 trading hours of a very good
rally/ bounce. So don't get too complacent on the short
side. If there is going to be a test of the lows, it's
doubtful that the market crashes through them. It seems like
the buyers are ready to go, but will boycott and pull bids
unless/until everything looks right.
On Tuesday look for a trade on the long side if there is
early weakness that reverses. If that plays out, beware that
the first decent bounce will likely be sold. The bounces
that fizzle should set up the better odds trades
unless/until the market can prove itself strong.
The initial resistance is at the 823.25 level on the SP
futures and the 1107.25 level on the Nasdaq futures. If
those are not sold, then a test of the breakdown areas from
Monday at the 837.50-838.00 area on the SP futures and the
1113.50-1114.25 area on the Nasdaq futures would be next. If
the market gets back up there and doesn't reverse, then a
low could be in place. The next resistance would be at the
849.50-850.00 area on the SP futures and the 1126.50-1127.25
area on the Nasdaq futures, and those will be key areas if
there is a good rally. If the market gets up there and
doesn't reverse, then a run towards the 857.00-858.00 area
on the SP futures and the 1136.75-1138.00 area on the Nasdaq
futures could be in the cards. If something happens that
gives us a good rally, then watch for resistance at the
870.75-871.50 area on the SP futures and the 1147.50-1149.00
area on the Nasdaq futures.
The initial support is at the 813.00-812.50 area on the SP
futures and the 1089.50-1088.50 area on the Nasdaq futures.
If there is follow through selling and those are broken then
there is some support at the 808.00-807.50 area on the SP
futures and the 1084.00-1083.00 area on the Nasdaq futures.
If the market reverses off of those areas in the early
going, it should set up a decent trade on the long side. If
those do not hold, then the gap area down at the 802.00-
799.50 area on the SP futures and the 1078.50-1076.50 area
on the Nasdaq futures would be key support, and it would
likely be a good spot for a reversal to occur. If that
happens, then it could spark a good rally. If those areas
are broken, then the next support is around the 795.50-
794.50 area on the SP futures and the 1071.50-1070.50 area
on the Nasdaq futures. If those don't hold, then the 782.00-
780.25 area on the SP futures and the 1058.25-1057.00 area
on the Nasdaq futures could be seen.
December 2008 SP futures resistance
symbols: emini = esz8 / big contract =spz8
823.25
837.50-838.00
849.50-850.00
857.00-858.00
870.75-871.50
December 2008 SP futures support
symbols: emini = esz8 / big contract =spz8
813.00-812.50
808.00-807.50
802.00-799.50
795.50-794.50
782.00-780.25
December 2008 Nasdaq futures resistance
symbols: emini = nqz8 / big contract = ndz8
1107.25
1113.50-1114.25
1126.50-1127.25
1136.75-1138.00
1147.50-1149.00
December 2008 Nasdaq futures support
symbols: emini = nqz8 / big contract = ndz8
1089.50-1088.50
1084.00-1083.00
1078.50-1076.50
1071.50-1070.50
1058.25-1057.00
December 2008 Dow futures resistance
symbols: emini = ymz8
8239
8242-8246
8440-8445
8522-8528
8555-8563
December 2008 Dow futures support
symbols: emini = ymz8
8127-8122
8082-8077
8022-8014
7983-7975
7854-7846
---------------------------
REMINDER:
Real Time subscribers can view these updates on
the web at this site:
http://www.tradestalker.com/members
---------------------------
This publication's primary focus is trading the index
futures. However, you can also use my nightly updates to
trade the following ETF's (SPY), (QQQQ), (SDS), (QID),
(DIA), and (DOG).
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.
*************************************************
No comments:
Post a Comment