TradeStalker's RBI Update 10/04/09

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TradeStalker's

R.B.I. Trader's Update

10 / 4 / 2009

(Published Since 1996)

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Dateline: 5:23 pm eastern time, 10/4/2009

The market started last week with a higher open and a strong
rally back up to 1061.00 on the ES. On Tuesday the early
strength was sold at the 1065.75 level on the ES, where
there was good resistance, and then the market rolled over.
That left a 1-2-3 top on the daily charts, and the SP500
cash easily dropped to the 1031-1030 target at Thursday's
close. Friday's action started with a gap down open at
1015.00 on the ES, but the market rallied from the open and
eventually made a double top at 1026.00 by early afternoon.
The 1025.50 level then turned into a lid and the market sold
off until about 5 minutes left in stock trading.

The internal gauges turned bad in a hurry. However, the
short term overbought/oversold indicators haven't been this
oversold since February 23rd, a day before a 30 point relief
rally for the SP500 on a closing basis. The McClellan
oscillator is at -249, my 3 Day Thrust oscillator is at -.64
(normal extreme is +/ .50) and the RBI oscillator is in buy
territory. In addition, the Vix gave 2 buy signals at
Friday's close.

That said, there is reason for a decent rally to occur early
in the week unless this is turning into a mini-meltdown
move. The afternoon highs from Friday would need to be
exceeded, and not quickly reversed, to get prices turned
around a bit. If the market can get over that resistance,
and keep holding on small dips, the move could get the ES
back towards the 1034.75-1035.75 area before another
reversal. However, if the market is not able to make good
out of this deep oversold status and react by giving us a
rally with some gusto, then the next stop on the downside
might not come until reaching the 1010.00-1008.50 area on
the ES. If that area is not held, then back under the 1000
level is probably in the cards on this leg down.

December 2009 SP futures resistance
symbols: emini = esz9 / big contract =spz9

1025.50-1026.25
1028.25-1029.50
1034.75-1035.75
1040.00-1040.75


December 2009 SP futures support
symbols: emini = esz9 / big contract =spz9

1019.00-1018.50
1015.00-1014.50
1010.00-1008.50


December 2009 Nasdaq futures resistance
symbols: emini = nqz9 / big contract = ndz9

1671.50-1672.00
1674.75-1675.25
1679.75-1680.50
1686.50-1687.50


December 2009 Nasdaq futures support
symbols: emini = nqz9 / big contract = ndz9

1659.00-1658.00
1653.00-1652.00
1646.50-1645.00


December 2009 Dow futures resistance
symbols: emini = ymz9

9463-9466
9476-9481
9522-9526
9553-9558


December 2009 Dow futures support
symbols: emini = ymz9

9410-9406
9360-9356
9311-9307

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Good Trading,
Mike Reed
TradeStalker.com

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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)

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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