TradeStalker's
Support and Resistance Update
7 / 24 / 2011
(Published Since 1996)
...............................................
Dateline: 5:36 pm eastern time, 7/24/2011
The market dropped last Monday, and got itself into an
oversold state, but the upside surely was more than I
thought. The ES had big days on Tuesday and Thursday,
reaching the 1343.50 level on Thursday. On Friday the market
had an "inside day" as it traded within the high and low
made on Thursday. The ES dropped from 1341.75 on the open
down to 1332.75 (which was just above the 1332.50-1331.50
support area) and got itself turned back up. However, the
rally was over by 1 PM and then the ES traded in a narrow
range going into the last hour. A 4 point drop down to
1338.50 occurred, but then the ES rallied back to the
1342.50 level again before backing off of that into
settlement.
The market has acted like it is running out of steam, with
buyers not wanting to get caught long had a top. On each dip
though, the buyers have been coming back to push prices
higher. The market had itself getting into an overbought
status but backed off of that a bit with the Friday action.
However, it's not good when the market stalls out in trades
in a narrow range when making a high for the move. Unless
the ES can get over the 1342.50-1343.50 area and stick
(giving a breakout of this range to the upside), the market
appears vulnerable for a decent pullback here.
If that resistance area is cleared, but the move is reversed
from around the 1348 area after a short covering rally
stalls out on the ES, then a drop back to the 1342 area
would be key to hold. If we get that kind of action, and the
market reverses and takes out the 1342 area to the downside,
then it will set up a topping pattern with a good amount of
downside in the cards. On the flip side, the pressure should
be on if the initial support areas are broken and not
quickly reversed, per usual of late. If we get a drop to
test that area, and buyers keep their hands in their pockets
and don't turn the market right back again, then things are
changing short-term. A drop down to the 1332.50-1331.50 area
would be next, and would be key on Monday. If that area is
not defended, or we just get a feeble bounce back towards
the 1338 area that stalls out, then a move back towards the
1328 area will likely be in the cards for a short-term
target. If that area is reached, and not turned around, then
we have a few days of downside action to contend with early
next week.
So, beware of another turn down from the 1342.50-1343.50
area on Monday. A pullback is due, and if it doesn't start
from that area, then a move up to the 1348 area is possible,
but that will likely be sold. If the 1339.00-1338.50 area is
broken, then chances are that the market is getting soft and
lower prices are ahead. If that occurs, bounces should be
sold under the 1342.50 area then on Monday.
September 2011 SP futures resistance
symbols: emini = esu1 / big contract =spu1
1342.50-1343.50
1348.00-1348.50
1353.50-1354.50
September 2011 SP futures support
symbols: emini = esu1 / big contract =spu1
1339.00-1338.50
1335.00
1332.50-1331.50
1328.00-1327.50
1323.00-1322.00
September 2011 Nasdaq futures resistance
symbols: emini = nqu1 / big contract = ndu1
2429.75-2431.50
2439.50-2440.50
2448.75-2450.25
September 2011 Nasdaq futures support
symbols: emini = nqu1 / big contract = ndu1
2420.50-2418.75
2407.50
2399.00-2398.25
2392.00-2390.75
2384.50-2382.50
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---------------------------
Good Trading,
Mike Reed
Copyright (c) 2011 by TradeStalker.com, Ft Wayne, IN.
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