Day Trading - Moving Averages vs Support and Resistance

When day trading the SP and Nasdaq futures, do you rely on your moving averages more than your support & resistant
areas?

During the first hour of trading, the support and resistance zones on the SP and Nasdaq futures are the most important
things to watch. The moving averages have not yet had a chance to come into play.

After that, if a trend is developing I watch several key exponential and simple moving averages on the 2 minute, the 5
minute and the 13 minute SP and Nasdaq futures charts.

These specific moving averages give reliable support and resistance for the market as long as the slope of the moving averages
are fairly steep, indicating a trend. When there is no trend, the moving averages are flat and pretty much worthless.

When a trending market makes a countertrend move, and hits a key moving average on two or more different time frames at
the same time, the probability of a good trade setup increases dramatically. If you get three hits at the same time, its
even better. Sometimes youll see one key moving average get hit on the five minute SP chart at the same time another moving
average is hit on the 13 minute Nasdaq chart. This also gives a good trade setup.

Eventually, a trending market will reach the next major support or resistance zone. At that point the zones once again
become more important than the moving averages.

In afternoon trading, the market has often broken through a support or resistance zone several times. In that case, the
zone is no longer useful, and new areas of support and resistance can usually be found. When I find them, I send my subscribers
an RBI Intraday Update with the new support or resistance areas, and a description of what I think the market will do if
it moves above or below them.

About the Author

Mike Reed is author of TradeStalker's RBI Trader's Updates. He has been trading the Market for 23 years. His support and
resistance numbers have been published on the internet since 1996. Mike's nightly support and resistance zones are specific
and incredibly accurate. He offers an unlimited free trial of his nightly TradeStalker RBI Trader's Updates. http://www.TradeStalker.com

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