TradeStalker's
Support and Resistance Update
7 / 27 / 2011
(Published Since 1996)
...............................................
Dateline: 9:55 pm eastern time, 7/27/2011
The ES gapped down 5 points on Wednesday's open and didn't
look back. A drop down to 1307.25 occurred just over an
hour into trading. From there, a feeble bounce back to
1316.25 on the ES lasted until just before noon. The
market lost its steam, and rolled over again and went into
trend down mode until washing out to 1299.50 with just
over 30 minutes to trade. The activity picked up a bit at
that juncture. Buying/short covering gave a bounce back to
1304.75, but that failed and the ES dropped back to a
token lower low at 1299.25 with about 9 minutes left in
stock trading. The bounce back two 1303 also failed, and
just as stocks closed the futures dropped fast down to the
1298 .00 level. That was right at the 1298-1297 zone that
was our target for this move, but it looks like that might
need readjusted given Wednesday's action. The Dow lost
about 199 points while the S&P 500 dropped 27 points. The
Nasdaq 100 dropped a 62 points on the day.
Some of the short-term internal gauges are getting to
oversold extremes. In addition, the VIX has made quite a
move to the upside, and a reversal from these levels could
give us several VIX buy signals. This is also the best
time of the month, historically, for the market. So the
market has some things that are short-term bullish, and
will need to be made good on Thursday or the market has
some problems.
Actually, it still does have problems. When we get these
oversold extremes at lows, the market usually has one or
two days to get a good rally in gear or the bigger picture
begins to change. Right now, the market will still be
under pressure unless the ES can get back over the 1305
area and hold that on a pullback. The market is still
vulnerable unless that occurs, so if there is an early
bounce that fails near the initial resistance areas, then
the downside trend will continue. However, if the market
does take out the initial resistance and hold that on the
pullback, then the next hurdles would be around the 1311
area on the ES and the 12,400 level on the Dow cash. Those
are the key areas on the upside on Thursday.
If the market opens higher on Thursday, expect the first
bounce to fail as long as the ES does not break over the
initial resistance and hold that area. The market will
probably want to pullback a bit further on the downside
before we get any kind of sustainable buying. The way the
market acted on Wednesday, those trapped in long positions
from above will likely be looking to get out into early
strength. If that occurs, and then the market drops a bit
further and gets its footing, then we can see a decent
attempt to rally occur. On the other side of the coin, if
there is a lower open on Thursday, then look for a
reversal back up from the initial support areas (or just
below) to set up a trade on the long side. Just don't
overstay your welcome on any long trades until this market
can prove itself strong.
September 2011 SP futures resistance
symbols: emini = esu1 / big contract =spu1
1305.00-1305.50
1310.50-1311.50 and 12400 Dow Cash
1315.75-1316.50
1321.50
1325.50-1326.00
September 2011 SP futures support
symbols: emini = esu1 / big contract =spu1
1298.00-1297.25
1295.00-1294.50
1290.75-1290.25
1286.50-1285.50
September 2011 Nasdaq futures resistance
symbols: emini = nqu1 / big contract = ndu1
2367.50-2368.50
2382.50-2384.25 (12400 Dow Cash)
2395.50-2396.50
2413.50
2417.50-2418.50
September 2011 Nasdaq futures support
symbols: emini = nqu1 / big contract = ndu1
2357.00-2356.00
2348.00-2346.50
2339.00-2337.50
2330.00-2328.50
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Good Trading,
Mike Reed
Copyright (c) 2011 by TradeStalker.com, Ft Wayne, IN.
TradeStalker Updates may not be redistributed without
permission.
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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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