August 26, 2008 Trading Advisory Newsletter

Stock Trading Advisory Newsletter is provided by tradestalker.com.

Dateline: 6:35 pm eastern time, 8/26/2008


The market opened lower on Tuesday but after reaching 1263.50 on the SP futures the market turned up and rallied to 1275.75 in just about an hour. The move stalled out, and then after a small dip the SP futures popped to a lower high at 1274.50 and reversed. The break through the 1271.75 updated support was broken and the market sold off to make lower lows after the Fed Minutes were released. However, buyers defended the 1263 level (which was tested for the 4th time in the last 2 days) and the market turned back up. The 1266.00 level was broken (and then was barely broken by a
tick) and that sparked a move to the 1272.00 level on the SP futures in the last minute of futures trading.

The daily indicators are in neutral, and the market has been in a range for a few days now. The good news is that the market put together a good rally off of that 1263.00 level again on Tuesday, which has been a floor for the market this week. The Nasdaq futures also rallied after making a lower low on this leg down. That 1263.00-1262.50 area has been tested enough, so if there is another trip down to that area that isn't quickly reversed, then the market could be in some pre-holiday trouble. It would be especially important because we are now going into the timeframe that trends to be bullish for the market -- end of month, along with a Holiday weekend ahead.

In any case, the day ended with the market in uptrends so on Wednesday look for a shorting opportunity if there is early strength that stalls / reverses in the first 20-40 minutes of trading. If that plays out, then the first decent selloff should offer a buying opportunity as long as the 1266.00-
1265.75 area on the SP futures can hold. If that area doesn't hold, then the market will be under pressure and could end up cutting through the key support at the 1263.00- 1262.50 zone on the SP futures.

The initial resistance is at the 1272.00-1272.50 area on the SP futures and 1892.50-1893.50 area on the Nasdaq futures.
If the move isn't sold at those areas, then we should see a sprint towards the 1277.00-1277.50 area on the SP futures and 1902.50-1903.25 area on the Nasdaq futures. If the market gets up there, and the move stalls out as it gets there, then beware of a reversal. If those areas are easily cut through, then the next hurdles would be at the 1280.50- 1281.00 area on the SP futures and 1911.50-1913.00 area on the Nasdaq futures. If those are not a problem getting through, then a move back to the 1285.00-1285.50 area on the SP futures and 1920.25-1921.25 area on the Nasdaq futures could be in the cards before there is a sizable pullback.

The initial support is at the 1266.00-1265.75 area on the SP futures and 1882.75-1882.00 area on the Nasdaq futures. If those are tested early, and the market doesn't hold and turn back up, then a test of the 1263.00-1262.50 area on the SP futures and 1877.00-1876.50 area on the Nasdaq futures will need to be reversed fast to avoid trouble. If that area on the SP futures is broken by much, then the next big support is at the 1257.50-1257.00 area on the SP futures and
1868.50-1867.25 area on the Nasdaq futures. If those are broken, then major support is down at the 1252.50-1251.50 area on the SP futures.


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

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

1266.00-1265.75
1263.00-1262.50
1257.50-1256.75
1252.50-1251.50

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

1892.50-1893.50
1902.50-1903.25
1911.50-1913.00
1920.25-1921.25

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

1882.75-1882.00
1877.00-1876.50
1868.50-1867.25

September 2008 Dow futures resistance
symbols: emini = ymu8

11432-11436
11479-11482
11508-11513
11548-11552

September 2008 Dow futures support
symbols: emini = ymu8

11370-11368
11344-11340
11298-11293

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

724.70-725.10
727.80-728.20
730.30-730.70
734.20-734.80

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

718.90-718.50
715.90-715.50
710.60-710.20

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TradeStalker's

R.B.I. Trader's Update

08 / 27 / 2008

Intraday Update

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Dateline: 11:05 eastern time, es8u= 1275.5 nq8u= 1893

The ES was stopped just under the 1280.50-1281.00 area, and the NQ stopped just under its 1902.50-1903.25 area.
That might be it for the rally. A pullback should hold the 1273.50 level to avoid a reversal.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

08 / 27 / 2008

Intraday Update # 2

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Dateline: 11:39 eastern time, es8u= 1274 nq8u= 1892

The ES made a 123 top, triggered by the break from the lower high at 1277.50 and has reversed. The 1272.50- 1272.00 area must hold or the 1267.75-1267.00 area would be next.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

08 / 27 / 2008

Intraday Update # 3

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Dateline: 12:49 eastern time, es8u= 1284.5 nq8u= 1912


The pullback held at 1273.75 and launched another sprint higher. The market is acting very well thus far, and as long as a pullback holds the 1280.50 prior resistance the bulls will be in control.

Unless you are very nimble, it is not a move to short at the moment. It would take a break of that 1280.50 level that doesn't quickly reverse to turn the trend up move.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

08 / 27 / 2008

Intraday Update # 4

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Dateline: 1:35 eastern time, es8u= 1281.5 nq8u= 1910

I muffed the last update as the ES rejected the 1285.00- 1285.50 zone and pulled back. Thus far though, the pullback held above 1280.50. At this juncture, shorting a bounce off of this support with a stop just over the 1285.00-1285.50 zone should offer a good shorting opportunity. Just don't fall in love with either side at these levels.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

08 / 27 / 2008

Intraday Update # 5

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Dateline: 3:04 eastern time, es8u= 1282 nq8u= 1908

After the last update the ES popped to 1383.75 and then dropped to 1279.75. The bounce back stopped at the 1285.00- 1285.50 resistance and reversed again. If that zone is broken the move could extend towards the 1288.50 level.
However, if the 1279.50 level is broken, the trend roll over and a drop towards the 1274.50-1274.00 area should be in the cards.

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HOW THE DAY WENT: We wanted to short early strength, then buy the first decent pullback that reversed. The ES popped up to 1275.75 and then dropped 5.25 points to 1269.50 before turning up. Our last resistance zone was at the 1285.00-1285.50 zone on the ES. I goofed up and sent an update telling the group to avoid the short side while we were at that zone. That got clarified in time to trade react to a double top there and they sold off to 1276.25 before the close. New trial members note that the intraday updates are below the nightly support and resistance tables.


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