Trading Advisory Newsletter (September 03, 2008)

Stock Trading Advisory Newsletter is provided by tradestalker.com.

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TradeStalker's

R.B.I. Trader's Update

09 / 3 / 2008

Intraday Update

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Dateline: 10:41 eastern time, es8u= 1278.5 nq8u= 1851

Keep in mind that we get the Fed's Beige Book at 2 pm today.

The 1272.00-1271.50 support was tested and reversed and the ES ran up to the 60 ema on the 5 minute chart before pulling back. It looks like we'll get two-sided action today. If the 1272.00-1271.50 support is broken, then look for a reversal from the 1268.00-1267.50 zone was reached before the open and reversed. The 1280 level must be exceeded to get out of bearish mode.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

09 / 3 / 2008

Intraday Update # 2

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Dateline: 11:27 eastern time, es8u= 1272.5 nq8u= 1842

The bounces are not sticking, again, and lots of longs are trapped at higher prices. The bounces are shorting opportunities under 1279 on the ES and 1952 on the NQ.
A drop to 1268.00-1267.50 that reverses could set up a long trade, but aside from that the market still acts bad.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

09 / 3 / 2008

Intraday Update # 3

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Dateline: 11:45 eastern time, es8u= 1268 nq8u= 1832

The 1268.00-1267.50 zone was reached but the 1274 level needs to be exceeded to get into neutral. Avoid longs, unless its a quick scalp, until the trends change. The 1262.50-1261.50 area is major support that must hold to avoid a potential panic selloff.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

09 / 3 / 2008

Intraday Update # 4

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Dateline: 1:20 eastern time, es8u= 1269.5 nq8u= 1834

The Fed Beige Book is released in about 40 minutes. A low could be in place as long as the 1266.00-1265.50 zone holds on a pullback. There should be resistance at the 1271.50-1272.00 area and that area must be cleared and held on a pullback to turn the tide and put together a better bounce.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

09 / 3 / 2008

Intraday Update # 5

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Dateline: 2:16 eastern time, es8u= 1269 nq8u= 1832

The bounces are shorting opportunities when they stall this afternoon. If it 1268.50 doesn't hold and the SPX closes under 1266, it could set up a test of July lows.
The NQ has been a much better vehicle to trade on the short side.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

09 / 3 / 2008

Intraday Update # 6

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Dateline: 2:47 eastern time, es8u= 1271 nq8u= 1833

The marketplace sure seems to see the importance of staying over 1266 on the SP500 cash and futures. If that level can hold then a decent countertrend bounce could occur over the next day or so. However, if it doesn't hold (especially on the close) then a drop to 1262.50-1261.50 would need to be quickly reversed to avoid a break-down and potential drop towards the 1244-1243 area near term.
 

Dateline: 6:38 pm eastern time, 9/2/2008


The market had an unexpected gap up on the open on Monday, but after about 15 minutes of trading the SP futures rejected the 1302.50-1303.50 resistance zone. A pullback from a 1303.50 high brought a bounce back to 1302.50 and the reversal set up a 1-2-3 top and the market headed south. It was a stair-step pattern to the downside until the last hour of trading. With the SP futures falling 32 points and the Nasdaq futures dropping 71.50 points from the early highs, the SP futures bounced back to the 1277.00-1277.50 updated resistance zone in the last hour. They poked over that zone by 1 tick and then dropped 4 points to 1273.75 before going back to 1277.50 just before the close.

We still have 1/3 of our put options on the Nasdaq 100 from last Thursday. On Tuesday use early weakness to cover and we'll look to reestablish another swing trade, likely on the short side, when things shape up again.

The averages made outside days on Monday, and the closing numbers don't reflect the serious selloff that occurred. The market has been coming right back with a good rally after the big down days lately. It's doubtful that it will occur again, as the rallies are not sticking either and they are setting up good shorting opportunities when the upside fizzles. On Tuesday the initial resistance will need to be cleared and held on a pullback, in order to erase the downside momentum. Even if that occurs, beware that there should be eager sellers trapped from buying the dips on Monday, and tradable reactions should set up around resistance zones if the market does head higher.

On Tuesday, unless the initial resistance is exceeded and held, the market is vulnerable and an early washout appears likely. If that occurs, look for that early weakness to reverse to set up a trade on the long side. If that plays out, don't fall in love with the long side, as the first good rally will set up a shorting opportunity as soon as the upside momentum stalls out.

The initial resistance is at the 1277.50-1278.00 area on the SP futures and the 1857.50-1858.50 area on the Nasdaq futures. If those are cleared and the market doesn't quickly reverse, then we could see a decent bounce occur. The next resistance is at the 1284.50-1285.00 area on the SP futures and the 1867.00-1869.00 area on the Nasdaq futures. If the market gets there and reverses, it sets up a good shorting opportunity. However, if those areas are not a problem, then the 1288.50-1289.00 area on the SP futures and the 1876.50- 1877.50 area on the Nasdaq futures should be sold if the bounce is going to reverse. If those are not able to hold the market down, then the 1292.00-1292.50 area on the SP futures and the 1881.25-1882.25 area on the Nasdaq futures should offer very good resistance.

The initial support is at the 1272.00-1271.50 area on the SP futures and the 1845.00-1844.00 area on the Nasdaq futures.
If those are cut through and the market doesn't quickly reverse, then a drop towards the 1268.00-1267.50 area on the SP futures and the 1838.50-1837.50 area on the Nasdaq futures is likely. If the market cannot reverse from those zones, then the key support is down at the 1262.50-1261.50 area on the SP futures and the 1830.75-1829.50 area on the Nasdaq futures. If there is a selloff to those areas, and then the market reverses and turns back up, then a decent rebound could begin. However, if those areas cannot hold, then the 1258.00-1257.00 area on the SP futures would need to hold, otherwise we could see a bit of panic selling taking the SP futures down towards the 1244.50-1243.50 area which should hold unless the market is in a crashette type of mode.



September 2008 SP futures resistance
symbols: emini = esu8 / big contract =spu8

1277.50-1278.00
1284.50-1285.00
1288.50-1289.00
1292.00-1292.50


September 2008 SP futures support
symbols: emini = esu8 / big contract =spu8

1272.00-1271.50
1268.00-1267.50
1262.50-1261.50
1258.00-1257.00
1244.50-1243.50


September 2008 Nasdaq futures resistance
symbols: emini = nqu8 / big contract = ndu8

1857.50-1858.50
1867.00-1869.00
1876.50-1877.50
1881.25-1882.25


September 2008 Nasdaq futures support
symbols: emini = nqu8 / big contract = ndu8

1845.00-1844.00
1838.50-1837.50
1830.75-1829.50


September 2008 Dow futures resistance
symbols: emini = ymu8

11528-11532
11588-11592
11632-11637
11676-11681


September 2008 Dow futures support
symbols: emini = ymu8

11450-11446
11404-11399
11344-11340


September 2008 Russell futures resistance
symbols: emini = er2u8 / big contract = er2u8

739.90-740.40
743.70-744.20
746.00-746.40
750.30-750.80


September 2008 Russell futures support
symbols: emini = er2u8 / big contract = er2u8

733.80-733.40
730.60-730.00
724.90-724.20

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HOW THE DAY WENT: We were buying early weakness when the move reversed to start the day. The ES reversed from 1 tick under the 1272.00-1271.50 initial support and bounced 8.75 points to 1280.00 before reversing. Not to fall in love with the long side yet, the break of the initial support took the ES 6 points lower before the market found buyers at a *key* spot on the SP500 cash and futures. The 6 intraday updates sent today are below the nightly support and resistance tables.


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