TradeStalker's
Support and Resistance Update
5 / 30 / 2011
(Published Since 1996)
...............................................
Dateline: 12:26 pm eastern time, 5/30/2011
The market gapped down from 1327 on the ES last Monday and
fell to 1308.75 by Wednesday morning to fill a gap left from
April 19 (at the listed 1309.50 level) as the market was
getting oversold. The ES turned back up and rallied back to
fill the gap left from Monday's lower open at 1327.00 by
Thursday afternoon, then pulled back again. On Friday that
1327 level was cleared and then turned into support. An
early rally was reversed at 1332.00 on Friday, and the first
pullback was then reversed back up after reaching 1326.75. A
rally to the 1332.75-1333.50 area failed (1333.75 was the
high) and then a drop back to that 1327.00 level occurred
again. Buying and short covering gave the market a lift back
to the 1330.50 afternoon high just before the close.
The market has been up 3 days in a row and the internal
gauges went from oversold to overbought in a hurry. My RBI
Oscillator is in sell territory and the 3 day thrust is at
+.67 (+/- .50 a normal extreme). That combo is something
that normally stops the upside, and more often then not will
usher in a decent selloff. This overbought combo last
occurred on May 10TH and the SP500 dropped 15 points on a
closing basis the next day. The Vix gave 1 of a possible 5
sell signals at Friday's close, and could give a couple of
others if it reverses on Tuesday. On the plus side, the
selloff to the 1308.75 low was reversed, and that was right
at the gap area, and it was defended. Also, once again the
SP500 did not spend much time under its 50 day moving
average before popping back over it. Another drop back under
that 50 day moving average will likely stick and bring on a
deeper drop.
The key on Tuesday will be holding that 1327 area on a dip,
it appears. On Tuesday we get the Chicago PMI at 9:45AM and
the Consumer Confidence release 30 minutes into the trading
day. If the initial resistance is not cleared / held or the
initial support is not defended, then the market is back in
some trouble again and bounces should be sold. If instead
the ES holds over the initial resistance areas, then a push
up towards the next resistance zones is likely in the cards
before a pullback occurs. If the ES does that, then the
pullback will need to hold around the Friday close at 1330
area, or quickly reverse if that's broken. Otherwise a test/
break of the 1327 area is next and possibly drop right
through it, and then head towards the next support zones to
see if there is a chance to get turned back up or continue
lower.
June 2011 SP futures resistance
symbols: emini = esm1 / big contract =spm1
1331.50-1332.00
1334.25-1335.00
1338.25-1339.00
1342.25-1343.00
June 2011 SP futures support
symbols: emini = esm1 / big contract =spm1
1328.75
1327.00-1326.50
1323.25-1322.50
1318.00-1317.25
1312.50-1312.00
June 2011 Nasdaq futures resistance
symbols: emini = nqm1 / big contract = ndm1
2336.25-2337.00
2342.50-2344.00
2348.50-2349.50
2353.25-2354.50
June 2011 Nasdaq futures support
symbols: emini = nqm1 / big contract = ndm1
2331.00
2329.75-2328.75
2322.50-2322.00
2314.00-2312.25
2306.25-2305.25
Good Trading,
Mike Reed
Copyright (c) 2011 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