TradeStalker's
Support and Resistance Update
8 / 8 / 2011
(Published Since 1996)
...............................................
Dateline: 7:20 pm eastern time, 8/8/2011
The ES gapped down more than 33 points on Monday, right
at the last listed support at the 1163.25-1162.50 zone,
and from just one tick under that zone the ES ran up 16
points to 1178.25 in the first 10 minutes of trading.
That bounce was sold, and a trend down move was underway.
A drop down to 1147.50 followed, and then a fast rally up
to 1167.75 occurred. That was sold also, and that trend
down move continued until dropping hard down to 1115.25
on the ES. Another good rally up to 1148.75 followed, but
that was also sold in the market rolled over again. The
move down was basically trend down to 1110.00 on the ES
while the indexes closed on their lows.
The market is obviously oversold. After all, since the
closing highs on July 19 to Monday's close, the Dow has
lost 1914.56 points and SP500 cash lost 224.34 points on
a closing basis. price indicators should be oversold with
that movement. The internal gauges sure are oversold
across the board. In fact the McClellan Oscillator
reached -442 on Monday's close, a huge extreme for that
old time indicator. Sentiment had a huge blow-up on
Monday, as the VIX jumped 50% in one day to the 48 level.
The last 11 trading days have been "sell the bounces" for
the most part, as they refuse to stick due to strong
downside momentum. It's also because all of technical
damage that has been done. There are a lot of bottom
pickers stuck long at higher prices looking to get out.
So, despite the deep oversold condition the market
*still* needs to prove itself strong before things can
begin to change. We get the Fed decision on interest rate
policy and remarks are released at 2:15PM on Tuesday. If
the Fed has a way to change things, they need to show
their cards on Tuesday.
So, look to sell bounces under the initial resistance
areas early on Tuesday. The market ended Monday on its
lows so there should be eager sellers on the first decent
bounce when it stalls out. If there is a lower open
instead then the 1102.00-1100.50 area should be key
early. If there is no sign of a reversal back up from
that area, then more damage is done. IF there is a decent
rally off a low, it should stop after moving up about 20-
22 points on the ES. If there is a better move up, then a
run-up of 39-41 points off of the low should be as far as
the upside goes before a pullback. If there is a move up
of that magnitude, then a low should be in for a bit and
a good pullback that stalls/reverses should set up a
trade on the long side for a switch.
September 2011 SP futures resistance
symbols: emini = esu1 / big contract =spu1
1149.00-1149.50 (pivotal)
1158.00-1158.75 (strong)
1166.50-1168.50
1177.50-1178.25 (major Tuesday)
1184.50-1185.00
September 2011 SP futures support
symbols: emini = esu1 / big contract =spu1
1109.50-1108.50
1102.00-1100.50 (key)
1096.00-1095.50
1088.00-1086.50
???
September 2011 Nasdaq futures resistance
symbols: emini = nqu1 / big contract = ndu1
2110.50-2111.50 (pivotal)
2122.50-2124.00 (strong)
2147.75-2149.25
2160.50-2161.75 (major Tuesday)
September 2011 Nasdaq futures support
symbols: emini = nqu1 / big contract = ndu1
2030.00-2028.50
2017.75-2016.75 (key)
2008.00-2006.50
1994.50-1992.50
???
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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.
This publication's primary focus is trading the index
futures ($ES_F)and($NQ_F). However, you can also use my nightly updates to
trade the following ETF's (SPY), (QQQQ), (SDS), (QID),
(DIA), and (DOG)
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