August 25, 2008 Trading Advisory Newsletter

Stock Trading Advisory Newsletter is provided by tradestalker.com.

Dateline: 6:30 pm eastern time, 8/25/2008


The market opened down on Monday and below the initial support that was key. After a small bounce from 1280.25 to 1284.00 on the SP futures, the market rolled over and dropped steadily to a 1265.75 low just before 1 pm. The market tried to get going on the upside, but the first move off of the low could only pop to 1270.25 before reversing and pulling back to 1267.50. The SP futures then moved over the 1270 level again, but after getting to 1271.75 the SP futures went back down through the 1270 level and that lead to a new low for the day at 1264.50 on the SP futures and then the market firmed up a bit into the close.

On Tuesday we get the Consumer Confidence number 30 minutes into the trading day, and then we get the FOMC Minutes released at 2 pm eastern time. This should help give a dose of volatility to the market. The VIX reversed from complacent levels, and in doing so a few sell signals were given. However, the jump of 11.5% might be too much bearishness for one day.

The market has been able to recover after the sharp drops lately. If things go as they have, then the market will move higher in the early going on Tuesday. If there is a rally, the move needs to get over the initial resistance areas and not quickly reverse to get the market out of the down- trends. If the market is so weak that it can not break and hold the initial resistance areas, then it's more trouble for the bulls. However, If the market can get over the initial resistance and hold, then we could rally back towards the 1280.50-1281.00 area on the SP futures and/or the 1911.50-1913.00 area on the Nasdaq futures and then see what the market wants to do. A rally will not be able to hold over those areas if it's still weak.

The initial resistance is at the 1272.00-1272.50 area on the SP futures and 1901.50-1902.50 area on the Nasdaq futures. The market will be vulnerable unless those areas a cleared and held. If those are cleared, and the market doesn't quickly reverse, then the next hurdles would be at the 1277.00-1277.50 area on the SP futures and 1907.50-1908.25 area on the Nasdaq futures. If the market gets back up there, and the move loses steam, then beware of a reversal of trend and a selloff back towards that 1272.50-1272.00 zone at a minimum. However, if the market plows through that resistance then the 1280.50-1281.00 area on the SP futures and 1911.50-1913.00 area on the Nasdaq futures will likely be pivotal. A reversal would put the market back in downtrends, but a break and hold over those areas would open the door for a run to the 1285.00-1285.50 area on the SP futures and 1920.25-1921.25 area on the Nasdaq futures. If those are somehow exceeded, then there should be very strong resistance near the 1291.00-1291.75 area on the SP futures and 1929.25-1930.50 area on the Nasdaq futures.

The initial support is at the 1261.50-1260.50 area on the SP futures and 1887.00-1886.00 area on the Nasdaq futures. Those areas should be bought if the market is going to be ok. If those are broken, then the 1257.50-1256.75 area on the SP futures and 1881.50-1880.25 area on the Nasdaq futures must hold or else another sizable downdraft is in the cards, with a move towards the 1252.50-1251.50 area being a last good support in front of another nasty selloff.


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

1272.00-1272.50
1277.00-1277.50
1280.50-1281.00
1285.00-1285.50
1291.00-1291.75

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

1261.50-1260.50
1257.50-1256.75
1252.50-1251.50

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

1901.50-1902.50
1907.50-1908.25
1911.50-1913.00
1920.25-1921.25
1929.25-1930.50

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

1887.00-1886.00
1881.50-1880.25

September 2008 Dow futures resistance
symbols: emini = ymu8

11434-11439
11479-11482
11508-11513
11548-11552
11604-11611

September 2008 Dow futures support
symbols: emini = ymu8

11326-11322
11298-11293

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

723.00-723.20
727.80-728.20
730.30-730.70
734.20-734.80
739.00-739.50

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

716.90-716.40
713.20-712.80

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TradeStalker's

R.B.I. Trader's Update

08 / 26 / 2008

Intraday Update

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Dateline: 10:43 eastern time, es8u= 1275 nq8u= 1902

The early weakness was reversed from 1263 just 6 minutes into the trading day and has rallied towards the 1277.00- 1277.50 resistance. The 1271.75-1271.25 area needs to hold on this pullback to keep the trends from turning back down.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

08 / 26 / 2008

Intraday Update # 2

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Dateline: 11:22 eastern time, es8u= 1272.5 nq8u= 1896

The averages made 123 topping patterns on the turn down from lower highs, however the 1271.75-1271.25 area was tested and held thus far. A break under that zone that doesn't quickly reverse would turn the trends down.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

08 / 26 / 2008

Intraday Update # 3

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Dateline: 12:42 eastern time, es8u= 1270 nq8u= 1893

The trends have turned from up to a trading range at the moment. Until the FOMC Minutes are released, be very choosy on trade setups. Shorting the bounces is the better odds trade. After the release look for a quick back-and-forth type action and then a trend should develop after about 15-20 minutes and trade in a directional move into the last 30 minutes or so.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

08 / 26 / 2008

Intraday Update # 4

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Dateline: 3:01 eastern time, es8u= 1264.5 nq8u= 1879

The ES bounced a bit from just over the 1261.50-1260.50 zone. If that breaks we could see an air-pocket type of drop. The ES must break and hold the 1266.00 level to avoid that breakdown.

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HOW THE DAY WENT: The lower open held and reversed from just above the key support zone in the first 6 minutes of trading. About an hour later, after reaching a 1275.75 high, the ES made a 1-2-3 top pattern (this setup is in "Read the Greed" along with many others) and it lead to a selloff back to the 1263.00 before buyers stepped to the plate. We wanted proof before taking a long position and the move over 1266 took the pressure off and lead to a move back up to the 1271.75 level in the final minutes of trading. If you are a new trial subscriber, note that the Intraday Updates sent on Tuesday are below the nightly update support and resistance tables.

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