TradeStalker's
Support and Resistance Update
7 / 31 / 2011
(Published Since 1996)
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Dateline: 5:36 pm eastern time, 7/31/2011
The market was hit with selling every day last week, as all
the bounces failed to stick. The market opened lower on
Monday and then the ES tested the 1340 level which had
caused problems on the Thursday and Friday before. That
level was tested again on Tuesday morning, and then it
dropped all day on Wednesday we had a big down day, with the
Dow losing almost 200 points and then on Thursday morning
the market started an oversold bounce. That fizzled out
around the lunchtime trading, and then the market sold off
into the close. On Friday the ES gapped down over 12 points
and kept going until the ES reached the 1278.50-1277.50
major support zone and the S&P 500 cash dropped just under
its 200 day moving average, and then the market turned back
up. The ES rallied to just over 1300 and then turned back
down. That pullback held at 1289.50, and then another bounce
followed. The 1297 level on the ES held the market back, and
then a symmetrical drop down to 1285.75 held and the market
firmed into the close.
Things could change on Sunday night depending on the budget
deal, but at the moment the technical indicators are getting
very oversold enough to begin looking for a decent bounce.
We have had a closing Trin above 1.10 for three days in a
row, and also the three-day thrust has closed below the -.50
"normal" oversold level for three days in a row. The
measures of up to down volume are at the extremes also. In
addition to that, the VIX closed at 25.25 on Friday. It is
on a couple of buy signals. Last, but certainly not the
least, is the fact that the ES reversed from what should be
a key area on Friday morning. That may be tested again, but
the market acted like it had a good bid down there and it
will likely be bought if it's tested, or slightly exceeded,
if there is another push down. If it doesn't, then the
market is in bigger trouble than it appears.
So, things might change before the Monday open but it looks
like a decent bounce should begin soon. Whether or not it is
sustainable will need to be judged if we do get a rally
underway. As long as the 1278 area on the ES is defended, or
better yet stays above the initial support on a pullback,
then a move back to the 1302.50-1303.00 area could be in the
cards. We have had good volatility lately, so if it is more
than that, then a move up to around the 1308 area would be
next. I would think that a fast move to that area that
stalls out should bring a pretty good, fast, pullback if the
volatility is going to continue. So, be on your toes on both
sides as we we'll likely see yet another day of two-sided
action where the bounces (no matter how impressive at the
time) still continue to fail.
Sorry, I don't have the NQ numbers for Monday. I will have
them for Tuesday however. My apologies if you trade the NQ.
September 2011 SP futures resistance
symbols: emini = esu1 / big contract =spu1
1297.00-1298.00
1302.25-1303.00
1307.75-1308.75
1311.75-1312.50
September 2011 SP futures support
symbols: emini = esu1 / big contract =spu1
1286.75-1285.75
1282.00-1281.25
1278.00-1277.25
1272.50-1272.00
September 2011 Nasdaq futures resistance
symbols: emini = nqu1 / big contract = ndu1
September 2011 Nasdaq futures support
symbols: emini = nqu1 / big contract = ndu1
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Good Trading,
Mike Reed
Copyright (c) 2011 by TradeStalker.com, Ft Wayne, IN.
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