August 28, 2008 Trading Advisory Newsletter

Stock Trading Advisory Newsletter is provided by tradestalker.com.

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TradeStalker's

R.B.I. Trader's Update

08 / 29 / 2008

Intraday Update

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Dateline: 10:19 eastern time, es8u= 1293 nq8u= 1891

The gap down open reversed and the pop back stopped at yesterday's close on the ES and the pop reversed. We could get some good swings both ways but shorting the bounces is better odds under current conditions. Take partial profits on the NQ short at 1890 or better. The stop on the remainder is now at 1905.50 and trail it if there is further weakness.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

08 / 29 / 2008

Intraday Update # 2

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Dateline: 11:15 eastern time, es8u= 1288.5 nq8u= 1878


The Nasdaq short was partially covered at 1890 and has reached 1873.50 thus far. Cover a 1/3 at 1879 or better. A bounce shouldn't exceed 1892 so a feeble bounce back to that level could be re-shorted. The ES shouldn't exceed 1292.50 on a bounce if the downtrends are going to continue.

Good trading,
Mike

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TradeStalker's

R.B.I. Trader's Update

08 / 28 / 2008

Intraday Update # 3

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Dateline: 11:39 eastern time, es8u= 1287.5 nq8u= 1872

It will be a trend down day as long as 1290.50 is not exceeded and held. We still have a 1/3 short position on the NQ (or puts) and will let this ride.

Enjoy the Holiday. The next update will be sent Monday evening.
 

Dateline: 6:10 pm eastern time, 8/28/2008


NOTE: There will not be any intraday updates after
noon on Friday. Enjoy your Labor Day Holiday. The
next regular update will be sent on Monday
evening, September 1st.

The market gapped up on Thursday and rallied to 1293.50 on the SP futures, and the key 1293.00-1294.00 area was rejected. The SP futures dropped to 1288.75, and with the 1288.00 support holding, the market rallied through that resistance and went to new highs for the day. The SP futures reached 1298.00 and then backed off, but the pullback held at old resistance by turning up from 1293.50. They bounced back to 1298.75 and quickly reversed, and that pullback also held at 1293.50. Another reversal back up took the SP futures to 1299.00 while the Nasdaq futures moved back to a lower high at 1921.50 with an hour left in stock trading.
The last hour was split between a strong SP futures and a weak Nasdaq futures. They pulled back to 1295.50 and 1913.50, respectively, and then the SP futures rallied back to 1300.00 while the Nasdaq futures popped to 1921.00. The SP futures backed off only 3.50 points while the Nasdaq futures dropped 17.75 points to a new low at 1903.25 before settlement.

If you shorted the Nasdaq from the 1919 level or above, we had a nice drop to give us 13 points profit at the close.
Lock in partial profits into early weakness and bring a stop down to break-even on the remainder. If they fall to the 1895.50-1894.50 bring the stop down to 1911.25, at worst.

It is kind of a tough call to make, with the big divergence between the SP and Nasdaq. It sure looks like a top on the Nasdaq, as it had trouble most of the day while the blue chips rallied nicely. Both the SP and Nasdaq futures settled at discounts to their cash indexes, so early weakness was priced in at Thursday's close. Many of my internal gauges reached short term overbought extremes at Thursday's close also. The weight of the evidence says the market should pull back, and at best it will be difficult making much on the upside from here. Shorting the bounces should offer the better setups, even though it's end of month.

The initial resistance is at the 1302.50-1303.50 area on the SP futures and the 1913.50-1914.00 area on the Nasdaq futures. If those are reached, be on the lookout for a reversal. If the market easily cuts through those areas, then the next hurdles would be at the 1308.00-1308.50 area on the SP futures and the 1922.50-1924.00 area on the Nasdaq futures. If those are reached and there is not a reaction and turn down, then we could see a rally up to the 1312.50- 1313.50 area on the SP futures and the 1931.00-1932.00 area on the Nasdaq futures.

The initial support is at the 1294.00-1293.25 area on the SP futures and the 1903.00-1902.25 area on the Nasdaq futures.
If those areas are not defended, then there should be some good support near the 1288.50-1288.00 area on the SP futures and the 1895.50-1894.50 area on the Nasdaq futures. If those are broken, then the 1285.25-1284.75 area on the SP futures and he 1888.50-1887.50 area on the Nasdaq futures should be magnets. If the market gets down there, and cannot turn around, then it will mean trouble and a trip to the 1281.50- 1281.00 is next, and if that doesn't hold then a drop towards the 1277.00-1276.50 area on the SP futures would be possible.

NOTE: There will not be any Intraday Updates after
noon on Friday. Enjoy your Labor Day Holiday. The
next regular update will be sent on Monday
evening, September 1st.



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

1302.50-1303.50
1308.00-1308.50
1312.50-1313.50


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

1294.00-1293.25
1288.50-1288.00
1285.25-1284.75
1281.50-1281.00
1277.00-1276.50


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

1913.50-1914.00
1922.50-1924.00
1931.00-1932.00


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

1903.00-1902.25
1895.50-1894.50
1888.50-1887.50


September 2008 Dow futures resistance
symbols: emini = ymu8

11726-11731
11781-11786


September 2008 Dow futures support
symbols: emini = ymu8

11665-11662
11629-11625
11563-11558


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

747.80-748.20
751.20-751.50


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

741.80-741.40
736.30-735.90
733.70-733.40

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HOW THE DAY WENT: On Thursday, just before 2:30 pm eastern time, our Members were told"

"The market looks like it might be topping out. The NQ is looking like a good short for a swing trade. If there is a rally back towards the 1919 level or a bit higher, scale in puts should offer a good trade over the next few trading days."

This worked out fantastic. We took some profits at 1890 (29 pts profit) and another 1/3 at 1878 (41 pts) and are hanging on to the remainder for now. Since our entry at 1919 or better on the NQ, it has dropped to 1867.50 thus far. That is 51.50 points in less than 5 trading hours. Don't miss out on the next big trade post Holiday. Sign up today and we'll have you ready to go next Tuesday morning.

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