TradeStalker's
R.B.I. Trader's Update
4 / 5 / 2010
(Published Since 1996)
...............................................
Dateline: 6:20 pm eastern time, 4/5/2010
The gap up open was sold on Monday and the ES dropped 4
points from 1178.50 to 1174.50 (right at the 1174.75-1174.00
support zone) and turned right back up. That lead to a good
rally, as the ES made a new high for the year at 1183.75
about 90 minutes into the trading day. That turned into the
top of a narrow 2.75 point range between that 1183.75 high
on top and 1181.00 on the bottom as the market traded
sideways after the first 90 minutes of trading.
On Tuesday we get the Fed Minutes from the March 16th
meeting at 2pm. The last 2 up days had very strong breadth
but the advance came on light volume. If the market puts
together one more decent day on the upside, then the odds of
a reversal will be pretty high. In fact, the way the move
stalled out after 90 minutes of rally on Monday could set up
for an early shake-out on Tuesday. For now however, as long
as the initial support areas are held, the trends are up and
the market should stay in decent shape a bit longer.
So, on Tuesday look for early strength to set up a trade on
the short side. If there is a pop up open and the ES
reverses from the 1184.50-1186.00 zone in the first 40
minutes of trading, then a decent pullback should occur. If
that plays out, but the initial support is held on a
pullback (on the ES and NQ, along with 10950 on the Dow
cash), then the upside could get going once again and the
market should at least try to test the early highs. If the
market traces out this pattern and a bounce stalls/ reverses
from a test of the early highs, then that could be the
reversal that starts a decent sized drop. If the market
pulls back, but then can push through to take out early
highs on Tuesday without rejecting them, then one more day
of decent upside action is likely before the market stops to
digests the recent gains at best.
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Good Trading,
Mike Reed
TradeStalker.com
Copyright (c) 2010 by TradeStalker.com, Ft Wayne, IN.
TradeStalker Updates may not be redistributed without
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This publication's primary focus is trading the index
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