TradeStalker's
R.B.I. Trader's Update
11 / 1 / 2009
(Published Since 1996)
...............................................
Dateline: 5:26 pm eastern time, 11/1/2009
The market opened lower on Friday and under the 1058.75-
1057.50 initial support on the ES, so the short side was the
better side when the bounces stalled/reversed. The market
had a volatile first 30 minutes, but the ES could only
bounce to Thursday's closing range and from a 1061.50 high
the market dropped fast. There was a bounce from 1051.50 on
the ES, which was a bit over the 1050.50 support, but that
fizzled as it reached 1056.00 and then the market rolled
over and traded steadily lower. After the ES reached
1031.00, there was a 9.75 point bounce and that fizzled at
1040.50, and it set up another shorting opportunity. The ES
dropped to a new low at 1029.50 and then bounced back 8.75
points to 1038.25. That also stalled and reversed and the
market fell again to test the 1029.50 low before the close.
There isn't much good to say about the current price action.
Starting with the topping action from 2 weeks ago, which
turned into a solid downtrend, all of the bounces have set
up shorting opportunities. After breaking a rising wedge
pattern on Wednesday, the SP500 cash broke its channel on
Friday. The other averages are in the same shape. It will
take some work to fix that damage.
The internal damage started before the prices started
caving. The intermediate term internal gauges still look
poor, but the short term gauges are at an interesting place.
The extremes seen at the Tuesday and Wednesday closes were
at near historic oversold levels. That was worked off some
with Thursday's oversold rally, but still is oversold. The
sentiment, so very complacent a week and a half ago at the
top, has gotten a bit too bearish too fast now. The Vix
jumped almost 24% on Friday, as some fear was finally
generated on Friday. Those kind of huge jumps tend to be
reserved for major trading bottoms. Also, the closing Trin
was 2.98 on Friday. Normally a closing Trin at 3.00 or
higher sets up a good rally within 7 trading hours.
So, the market is in a similar position as it was last
Wednesday. The market got hurt on the last day of the month,
after a very good oversold rally on Thursday. At this
juncture, it will take a break and hold over the initial
resistance areas to change the intraday trends. Unless/until
that occurs, the bounces will not stick. Should the ES get
legs and rally 26 points like it did from the Wednesday low,
then the 1056.00-1056.50 area would be tested and then the
market would get hammered again. If the Friday double bottom
isn't held, then the 1019.95-1018.00 area on the SP500 cash
and/or the 1015.00-1014.00 area on the ES would be the key
support area. If that isn't reversed, then a drop towards
the 1008.00-1007.00 area on the ES could be in the cards.
Should that area fail to hold, a revisit of the high 900's
will become likely before this drop gets itself turned
around.
December 2009 SP futures resistance
symbols: emini = esz9 / big contract =spz9
1038.25-1039.00
1042.25-1043.00
1046.50-1047.00
1050.75-1051.50
1056.00-1056.50
1062.75-1064.00 **major
December 2009 SP futures support
symbols: emini = esz9 / big contract =spz9
1029.50-1028.50
1022.00-1020.50
1015.00-1014.00
1008.00-1007.00
December 2009 Nasdaq futures resistance
symbols: emini = nqz9 / big contract = ndz9
1674.75-1677.00
1681.00-1682.00
1689.25-1690.50
1696.75-1697.50
1705.75-1706.50
1711.75-1713.00 **major
December 2009 Nasdaq futures support
symbols: emini = nqz9 / big contract = ndz9
1660.00-1658.50
1650.25-1649.50
1640.75-1639.75
1632.00-1630.50
December 2009 Dow futures resistance
symbols: emini = ymz9
9710-9716
9739-9743
9786-9791
9810-9816
9851-9856
9914-9922 **major
December 2009 Dow futures support
symbols: emini = ymz9
9634-9629
9568-9562
9498-9492
9345-9336
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http://www.tradestalker.com/members
---------------------------
Good Trading,
Mike Reed
Copyright (c) 2009 by TradeStalker.com, Ft Wayne, IN.
TradeStalker Updates may not be redistributed without
permission.
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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.
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