By Mike Reed • Jul 7th, 2009 • Category: Indices (SP500, Dow, Nasdaq)
TradeStalker’s R.B.I. Trader’s Update
7 / 7 / 2009
(Published Since 1996)
The market opened lower on Tuesday, and kept falling in trend down action until reaching 882.25 on the ES. The reversal off of the 882.50-881.50 key support took the ES up to 888.25, just under the 888.50-889.50 updated resistance area, and the market backed off once again. The 882.50-881.50 zone was cut through as the downside picked up some steam, and after a bounce off of the 878.75-877.75 zone fizzled, the ES went to 875.25 and then bounced back a bit into the close.
We had a trend day on Tuesday, with the ES making its high in the first 5 minutes of stock trading and making its low with 5 minutes left in stock trading. The trends and momentum are with the bears at the moment, and it looks like lower prices are likely coming soon. However, back to back trend days are not real common so we should expect swings both ways on Wednesday. The market is also short term oversold, and the Vix gave a small buy signal at Tuesday’s close.
It looks like to put a dent in the downside momentum, the 888.25-889.00 area on the ES will need to be exceeded, and then not quickly reversed. The market is vulnerable still unless that area taken out. If the market didn’t make a low in the final minutes of Tuesday action, then the ES will need to get turned back up from the 872.25-871.00 area, otherwise we could see the downside accelerate.
Good Trading,
Mike Reed
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