TradeStalker's
Support and Resistance Update
7 / 10 / 2011
(Published Since 1996)
...............................................
Dateline: 5:36 pm eastern time, 7/10/2011
The ES opened down 18 points on Friday's employment report,
and turned up from 1333.75 and reached 1338.00 before
fizzling out. That set up a drop down to 1329.25 by 11:30 AM
and the market reversed. Two attempts to get over the 1335
level on the ES failed, but the pullbacks were small and the
ES made a push back up to test 1338 new resistance. The move
reversed from 1337.75 and pulled back to 1333.25 before
stalling out. A move up from there lost steam and the market
began to pull back, but with 30 minutes left in stock
trading the market got turned up and broke out above the
1338 level and ran up to 1342.50 just before the close.
We took off half of the put options (bought midday and in
the last hour on Thursday) on the open on Friday, locking in
a nice profit on part of the position. Last Thursday's high
at 1252.50 shouldn't be exceeded now, so keep a stop there
on the rest of that position for now.
After seven days on the upside, one down day should not mean
a whole lot, but in this case it looks like it may be the
start of something. If the market does move higher, the
short-term indicators will not confirm a higher high. Also
if that occurs, then expect the VIX to drop down towards 15,
which should set up a top. So, the market could go back to
test last week's high, but if so the move will likely set
the market up for another drop as big or bigger than the
Friday drop.
The futures closed just under some good resistance on
Friday. If the market opens higher, then expect a reversal
to occur in the first 40 minutes at the latest. If that
plays out, then the first support at the 1338.50-1338.00
area will be key. If that area is not held, was quickly
reversed if broken, then a move back down to the 1333 area
(and around 11600 on the Dow cash) will need to hold. If the
market gets back there, and is not turned up, then the
market will be showing signs of weakness that we didn't see
last week. A move back to test the 1329.25-1328.50 area
will be in the cards, and if that breaks in we should see
1325.00-1324.50 as a key area. If there is a breakdown, and
the market does not reverse off of that support, then we
will be seeing the 1317.75-1316.50 on this leg down.
On the upside, the ES pops over the initial resistance at
1342.50-1343.00 and holds that area on a pullback (instead
of breaking right down through it), then the door is still
open for one more push higher to possibly test the 1352.50
area. If the ES gets back there, and does not double top,
then a move to the 1358 area, and possibly 1362 area, is not
impossible (but not probable unless some outside event
occurs to send prices higher). If that occurs then get ready
to short as soon as the upside stalls out because that would
be a good top if the market gets there and reverses. A setup
like this could start a move down that is more than 25
points on the ES, more likely close to 40 points or more.
September 2011 SP futures resistance
symbols: emini = esu1 / big contract =spu1
1342.50-1343.00
1347.75-1348.25
1352.50-1354.00
1358.00
1361.50-1362.50
September 2011 SP futures support
symbols: emini = esu1 / big contract =spu1
1338.50-1338.00
1333.00-1332.50
1329.25-1328.50
1325.00-1324.50
1317.75-1316.50
September 2011 Nasdaq futures resistance
symbols: emini = nqu1 / big contract = ndu1
2409.50-2410.50
2421.75-2422.50
2431.25-2432.50
2442.00
2448.00-2450.00
September 2011 Nasdaq futures support
symbols: emini = nqu1 / big contract = ndu1
2400.00-2398.50
2387.50-2386.75
2379.75-2378.75
2366.00-2364.50
2352.50-2350.50
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---------------------------
Good Trading,
Mike Reed
Copyright (c) 2011 by TradeStalker.com, Ft Wayne, IN.
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Disclaimer
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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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