TradeStalker's
R.B.I. Trader's Update
2 / 23 / 2009
...............................................
Dateline: 6:51 pm eastern time, 2/23/2009
The market opened higher on Monday, but the strength was
immediately sold and the market headed lower. It was a basic
trend down day with only one decent counter-trend reaction,
but that bounce reversed from the updated resistance at the
757.00-757.50 area on the ES. After reversing from 757.25,
the ES dropped into 4pm where it found bottom at 738.75 (and
in the 741-739 major support zone) and then the futures
firmed to close a bit above fair value.
The market gets uglier each day. Monday was a case in point
of why it's important to change a market bias when price
action dictates. On Monday it didn't matter that the market
is oversold, due to strong momentum and a herd mentality.
That can change on Tuesday, we'll see. At the moment it
still is "I'm not buying yet" from the bulls and "get me out
of here" from those stuck bottom picking up to this point.
The bears are just looking for another bounce to fail.
At this point, it is looking like its almost time to begin
to scale into positions for the long term trader/investor.
The low on Monday was right at a key support area, and as
long as it is held, a trading low could be in place. Odds of
a decent bounce coming soon is pretty good. The odds of it
sticking for more than a few days, however, don't look so
good at the moment. The risk on the ES would be down to
around 733-732 it appears. If the ES goes through that area
by much, then the 700 level will probably be broken on this
leg down, with the SP500 possibly going towards the 682
area.
That said, look for two-sided action on Tuesday. In first 30
minutes, if there is early strength and it fizzles and/or
reverses from the initial resistance areas, then the trends
are still all pointing down and selling bounces is still the
better odds trade. However, if the market can hold over the
initial resistance areas, and also take out the 757.00-
757.50 area on the ES, then a low of some sort may be in
place. If that occurs, then the pullbacks should hold, so
when the dips stall out, look for another pop on the upside.
On the other side of the coin, if the market opens lower but
can then reverse back up from the 740.00-739.00 area (or a
little bit higher) on the ES, then we can get a good risk /
reward entry for a trade on the long side. Just beware that
if the 740-739 area on the ES is broken, there needs to be a
very quick reversal back up. If the ES breaks and stays
under that 740-739 area, then we could drop another 50
points on the ES before this selloff is over.
March 2009 SP futures resistance
symbols: emini = esh9 / big contract =sph9
747.00-747.50
750.25-751.00
757.00-757.50
764.00
771.00-771.50
778.75-779.50
March 2009 SP futures support
symbols: emini = esh9 / big contract =sph9
740.00-739.00 *major*
733.25-732.50
716.00
nothing much for valid support until...
682-681 on a close
March 2009 Nasdaq futures resistance
symbols: emini = nqh9 / big contract = ndh9
1137.50-1138.00
1142.00-1143.00
1150.50-1151.25
1159.75
1174.00-1174.50
1183.50-1184.50
March 2009 Nasdaq futures support
symbols: emini = nqh9 / big contract = ndh9
1126.50-1125.50
1120.25-1118.75
1094.00
March 2009 Dow futures resistance
symbols: emini = ymh9
7129-7131
7176-7180
7246-7252
7312
7372-7376
7457-7463
March 2009 Dow futures support
symbols: emini = ymh9
7086-7081
7012-7006
6872
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---------------------------
Good Trading,
Mike Reed
Copyright (c) 2009 by TradeStalker.com, Ft Wayne, IN.
TradeStalker Updates may not be redistributed without
permission.
This publication's primary focus is trading the index
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(DIA), and (DOG)
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