Friday 29 April 2011

Update Asia is where it's at

Morning All,

I was honoured to wake up this morning and see that my recent post, "Asia is where it's at-take notice Australia", has been reprinted at an excellent Asian trading site:  http://www.cfdtradersedge.com.au/.

If you are unfamiliar with this site, I urge you to read further. Alan has a depth of experience and this is portrayed throughout his many articles, posts and webinars. Furthermore, a convore chatroom has been created for traders to share ideas across a number of different topics: Futures, International Indices, ASX chart discussion, Software questions, Trading Education etc etc. If you are serious about improving your trading edge, and are looking for a forum to communicate with fellow traders, get involved in this high quality service. I look forward to posting some of Alan's articles going forth

Thanks
Austin

Thursday 28 April 2011

China- it's do or die time

Good Evening All,

It was great to get so much feedback on yesterdays post. I received many personal emails and I thank you for the contact.  It was also somewhat timely seeing the performance of the ASX200 yesterday, closing firmly down despite a 1% positive lead from the US. Certainly, it seems that many of us in Australia are very aware of the inherent US/Atlantic bias that perpetuates our society.  No doubt this was reinforced during the Financial crisis which brought home the realities of a globalised world. However, as we continue to recover from those extreme events, I believe the processes of de-coupling here in Asia will foster the necessary modifications in our social psychology leading to genuine change and action.

It has been a while since I am updated my outlook on the Chinese and Indian market. Both markets appear at quite critical junctures to me and need to get moving to the upside very shortly otherwise my bullish scenarios are invalidated: http://swingtradersedge.blogspot.com/2011/03/asia-top-setups.html

Shanghai Composite Daily:
Price broke out of the initial base pattern and the 3000 level, so I got long. However, price clearly failed just short of the Daily downward trendline and I was stopped out as price reversed. The recent high is now our marker and closes above this level are bullish. Position traders need to be patient once more

Shanghai Composite Daily (ii)
The longer term consolidation pattern


Price should not trade lower than 2800/2850 to keep the bullish scenario intact. These levels are the 50/61.8 retrace levels from the last major January swing low; previous support levels; and the upward trendline. Wait for bullish confirmation out of these levels. If the market keeps falling through here than this would potentially be a bearish setup.



India has also struggled at the downward trendline on the Daily chart. The market has spent the last 2 weeks consolidating in a clear range. This is a great short term pattern to exploit and wait for a trigger entry


Nifty Continuous Daily:
I do believe the bigger picture is bullish given the strong base pattern. Momentum made a new high thus we should be looking to buy the first pullback or consolidation pattern. 


Nifty April 60mins: 
Look for a clear breakout of this range as the entry trigger



It is set to be an interesting few sessions and I will update when I see anything meaningful
Thanks
Austin

Wednesday 27 April 2011

Asia is where it's at

Australia take notice- Asia is where it’s at!

Morning All,
I am feeling recharged after a nice 5 day holiday here in Australia. I wanted to take a step away from my usual angle in this post this morning. Often as a trader I become so bogged down in trading setups and scenarios that I often neglect other issues outside of the markets that would be great to put down on paper (and often more important). My market view has been well documented in recent posts and can be found at the links below. Bottom line, I believe the markets are going a lot higher. It has been a great few days and the best course of action as a trader is to be positioned and do NOTHING. I don't want to over think here, I don't want to be scared out of my position by news or economic data, and I don't want to day trade in a strong trending environment. We will soon see if this plays out but in strong trending environments, you do not want to miss out:


And thus, this allows me the freedom to write about the central issue of this post- Australia's continued inability to wake up to the economic opportunities in Asia. Several years ago I moved to Sydney, in part to take advantage of the huge tectonic shift that is taking place in the world economy with the emergence of China and India. We are in an unbelievably fortunate position here in Australia fundamentally and geographically.  And yet what amazes me is how preoccupied we remain with events in Europe and the US. This was a great point stressed in a weekend article in the Morning Herald entitled “wake up Australia”. I couldn’t agree more. There is an Industrial revolution going on in China and India fuelling an endless demand for commodities and raw materials. The sheer demographics of these regions will continue this thirst for years to come. Australia is in an unbelievable position to benefit from this given our abundance of Iron Ore, Coal and Natural Gas- so why don’t we give the respect to these regions they deserve? 

Time for some simple numbers. China's latest Q1 GDP number came in at 9.7% YoY and Retail Sales came in at 17.4% YoY. This is not surprising given they have hit these kind of numbers for years. The big question in China is how to keep the economy in check, and not how to keep it alive as it is in the US and Europe. Central bankers in China have been raising rates and doing everything in their power to cool speculation and asset growth. For Australia, 4 Asian countries namely China, India, Japan and South Korea counted for 55% of our exports. The value of Australia’s merchandise exports to India alone outstripped those of the entire EU. America and Britain accounted for only 10% of our exports. 

However, every morning I wake up and I am bombarded with reports and summaries from our financial institutions about economic developments and market summaries in America and Europe. We shouldn’t care. Our economic fortune is tied not to these countries but to those right on our doorstep. Why can I not be bombarded with detail about India, China or even Indonesia?  Certainly it seems easier to stick with the crowd and report on America and Europe. Both fundamental and technical analysis here in Asia is massively lacking in quality. When I turn on the TV (which is becoming increasingly rare), the financial stations spend hours debating the economic outlook of America with live interviews of various traders on the US floor. GREAT- how does that help me trade our region? There are no such interviews of a local trader in Sydney, Hong Kong or India. I have to admit we are slowly getting better but there is such a long way to go yet.

No doubt the US and Europe remain big sources of foreign investment in Australia. However, Tim Harcourt, chief economist at Austrade says China, India and the Association of South-East Asian Nations are catching up. Investment in Australia from ASEAN has trebled in the past 5 years eclipsing that of Switzerland and Germany. Why does our government want to hinder this investment by putting up massively restricting walls such as a mining tax and carbon tax to name just a few?  It’s not only our commodities that are in demand as shown by the attempted SGX bid for the ASX. There is not enough space here for me to give a true account of my thoughts regarding the failure of this deal. However, Australia has shown itself to be xenophobic once again of the highest degree and it is a real shame that our politicians cannot actually recognise what is in our “national interest”. Our national interest is actually so directly aligned with that of Asia. There will be a lot more attempted deals, more and more investment so lets no mess this opportunity up.

The reason I started this blog was to provide real value add technical analysis of the Asian region. I don’t see many other blogs doing this. I’m sure they are out there but I just haven’t found them yet. If I type the S&P Emini future into Stocktwits I can find 1000 technicians in a second offering their thoughts on the S&P 500. When I type in Shanghai, Nikkei or the Nifty, I struggle to find anything at all yet I know there are thousands and thousands of traders and technicians here in Asia trading these markets. There is no symbol for the Australian stock market (although I am in the process of getting this fixed). Let’s wake up. Lets start showing setups of the Shanghai Composite on a 1min, 5min, Daily, weekly whatever chart.

No doubt I fall prey to this US/Atlantic vulnerability. I trade the Eminis and I often blog about what I am seeing overseas, trading setups etc. I intend to tone this down. Of course events on Wall Street have a disproportionate impact on smaller markets like Australia. However, you will be amazingly surprised how many times we actually LEAD our American and European counterparts. This occurred in July 2010 and September 2010 when Australia was the first market to bottom, setting off a chain reaction across global markets. Wednesday last week was yet another great example- Australia gapped up in morning trade, Hong Kong opens in the afternoon adding fuel to the move, the Eurostoxx then gaps up and suddenly all the bears head for the exit triggering buy stops everywhere, then finally the US comes in and the market opens at 1325 vs 1310 the day before! The whole cycle continues the next day. It happens time and time again. If we are here in Asia, we don’t need to be reactive. We are part of this global game and are actually right at the forefront. Lets take advantage. 

I may be something of an idealist but I dream of a community of technicians, traders, bloggers who given the level of quality to Asian markets that is already given to Europe and the US. The economic emergence of China and India is not going away and I am sure the trading opportunities will proliferate.

Thanks
Austin

Wednesday 20 April 2011

Asian End of Day Summary

Today was a great trading day for the bulls in Asia. I thought I would keep tonight's post very simple and show a number of Daily setups after the close that clearly illustrate the bullish scenario across the region. I believe we are going a lot higher in the next few sessions/weeks thus we must be prepared. As I write, the Eminis are also charging, breaking my 1320 key marker (note that Asia led this move).

ASX200 Daily:
I talked about the 4800 level some weeks back and reiterated it yesterday: http://swingtradersedge.blogspot.com/2011/04/asian-morning-thoughts_19.html. Today we gapped up out of 4800 and rallied all day to close on the highs. This is a very strong closing engulfing candle right out of the moving averages. Look for retests of 5000 and beyond.


SPI June 5mins:
Clear trend day for Day traders. The gap strategy I have been talking about worked wonders today. Very simply, wait for the first 10 to 15mins to trade, buy a 5min closing candle above the high of this morning range and/or short a 5min closing candle below this range. Hold to the close!


MSCI Singapore Continuous Daily:
Price pulled back to the key pivot level and moving averages, put in a hammer and was followed by today's strong closing candle. We are breaking out of a clear flag pattern and I believe a move towards the previous highs is now in play.

MSCI Taiwan Continuous Daily:
Similar to Singapore, price retested key support, held, and today's follow through was very strong. Don't be afraid to join as this market is set to go higher. A inverse Head and Shoulders pattern has now formed.


Hang Seng Continuous Daily:
A strong gap up and follow through day should be the confirmation for a strong move higher in Hong Kong out of the recent range.




Simple charts which all imply strong moves ahead of us. It is time to switch to breakout mode and don't be afraid to join this move paying higher prices- its going higher. 

Currency Update

Good Morning All, 


Sorry for the late post today. I was busy running around pre the Asian open and had no time to post. I thought now would be an opportune time to update on a number of currency setups I am looking at. In my last currency post, I warned of a strong resistance zone in EURUSD at the 1.45 level and advised caution for traders: http://swingtradersedge.blogspot.com/2011/04/currencies.html


I was cautious not just because of the level, but because I couldn't identify a low risk/high reward pattern to trade. This played out very well given the events on Monday with EUR trading all the way down to 1.42 and lower. Once again, the key takeaway from this is being able to think correctly as a trader and respecting the risk/reward in each setup. Don't let your emotions and the prevailing sentiment effect you, but instead stick to a rigid trading plan based around your best trading setups.


A number of opportunities are now lining up. My favourite plays are long EURJPY and long AUDUSD. 


EURJPY Daily:
The pair has almost retested the 116 breakout level. The move out of this breakout zone was impulsive with a new momentum high. Thus, we should be looking to buy the first pullback into the trend and here it is. This offers a great long entry with stops back below the breakout level


EURJPY 60mins:
The 60mins has pulled back in an ABC type pattern. Last night we saw a strong bullish reversal out of the low that I believe confirms a bottom. Note the fib relationship between the waves down where C=1.618A down. I look for these kind of relationships in corrective moves and they are very relevant. Monday's weakness has been recovered.

My entry is either:

i) Buy stop above 119.50 spot. This was the previous breakdown level and buying above here should confirm a new uptrend.
ii) Look for a "test" of Monday's lows that holds. A tighter stop can be used for this entry


AUDUSD Daily:
The Daily is forming a clear consolidation pattern. The trend is up, momentum is breaking out after months of consolidation, and there are no clear res levels above here. As I said previously- DON'T FADE THIS. Ranges beget price expansions and this is merely the beginning for the price expansion after a 6month range. 




AUDUSD 60mins:
The 60mins is forming a potential triangle under 1.058/1.06. This is a consolidation pattern and we should be looking to exploit this for a subsequent breakout trade


 My entry is either:

i) Buy above 1.060 joining the momentum higher
ii) If price fails in the short term at the resistance level, I am looking to buy a small pullback for the "e" leg of a triangle. 
The target for this move is 1.08/1.0850 and then 1.10.

AUDJPY 60mins is another great short term setup. The 60mins has been correcting lower in an ABC move lower. I am looking for a breakout here and a retest of the highs. 





And Finally to EURUSD. To me, the Daily chart is just not clear and thus I am happy to focus on the better setups. Momentum has been consistently weak since breaking the previous 1.42 highs, and this is shown by the divergences on the momentum indicators. Furthermore, there is a potential ending wedge pattern in place. The key short term levels are 1.44 on the upside and 1.42 should be good support. Trade the ranges. 


EURUSD Daily:
Hope these setups prove helpful. Best of luck and contact at anytime. Should be an interesting run into Easter
Thanks
Austin

Tuesday 19 April 2011

US Market Overview

Overnight the Eminis got hit hard pre the Cash open on the back of the S&P warning. Certainly this invalidates my weekend post calling for a US market low as we made new lows across the board: http://swingtradersedge.blogspot.com/2011/04/important-post-us-markets-bottoming.html. As traders, we take the stop and move on. The setups looked great, we had initial confirmation from the market in the short term but there was no follow through above my 1320 key marker. That's the reality of trading and this should cause no emotional impact. I believe I identify enough good setups to consistently make money and thus we must move on to the next trade.

I don't think this is the beginning of a larger degree sell off. In fact I think that the alternative triangle pattern I talked about is the most likely scenario. Someone who has been calling this for a while and nailed it is Michael at EW Trends: http://ewtrendsandcharts.blogspot.com/. For now it is early days and I am happy to wait for a more meaningful base pattern before getting long once more. Breadth was bearish with Declining issues noticeably increasing on strong volume. Thus, I believe we will see a retest of last nights lows before a more meaningful low ensues.

Emini 60mins:
Price has come into the very low end of my support range. No meaningful short term confirmation yet. 1290 has to hold

One final word. No doubt there will be many Elliotticians who are now calling for a iii of 3 down! From my experience, these are the most fadeable setups and counts out there. Time and time again these fail to play out. Don't be trapped in this bearish mentality after the move has already happened! In fact, I ask any Elliotticians out there- how many times have you forecast a iii of 3 down and it actually played out in real time? Be honest. The whole concept behind strong wave 3 downs is that there are extreme events where the crowd and market is taken by surprise. Thus they are almost unforecastable. I struggled with this many times in my early career and I have learnt to trade more probable setups that actually make money and not a hopeful wish.


Key Levels for the Eminis:
Support: 1290, 1280
Resistance:  1303/1305, 1320

Thanks
Austin

Asian Morning Thoughts

Morning All,

The SPI is indicated at 4821 this morning after last nights sell off. Thus we are coming right into my support levels posted several days ago: http://swingtradersedge.blogspot.com/2011_04_12_archive.html. I have been stressing the importance of patience for postion traders and now I believe it is the time to consider buy setups in Australia once more. The key as ever is confirmation so look for hammers or somekind of bullish turnaround today/the next few days before going long.

SPI 60mins:
4800 is an open gap as well as the 38.2 retrace level

XJO Daily:
Todays sell off will bring price right back into the upward sloping moving averages.


Scenarios I am following today:
i) Gap strategy- wait for the first 15mins to trade and mark the highs and lows of the range. Buy a 5min closing candle above this range and short a 5min closing candle below this range
ii) Look for scalp longs out of 4800 with tight stops. This is a support play with tight risk. If 4800 breaks, look to potentially short and join the momentum lower for an intraday trade only

Bottom line, I think today could be a gap down, test of 4810/4805, and then a potential reversal day higher. The key is waiting for short term confirmation. I must stress the short term trend is down thus keep risk tight on the long side.

Thanks
Austin

Monday 18 April 2011

FTSE Xinhua China Breakout trade?

I am seeing a potential Ascending triangle pattern forming here in the FTSE Xinhua China Futures. A break above 10,200 should be the bullish trigger. This is in line with the big picture bullish scenario I have been following for a while. Monitor this area closely:

FTSE Xinhua China April 15mins:


FTSE Xinhua China April 60mins:
This triangle and consolidation pattern is forming above previous resistance. Consolidation at the top end of the range is bullish

SPI Ending Wedge

Having a great day on the SPI today. I just wanted to update the Ending Wedge pattern I posted this morning. The key to this pattern is the 3 wave push into the trendline with bullish momentum divergences. Indeed, the momentum indicator made 3 higher lows despite price making lower lows. As ever, waiting for confirmation is key and when I saw a strong 5min reversal candle off the low with follow through, I got long at 63 average. In the short term the resistance levels are 4900/4905.

SPI 5mins:

These patterns appear time and time again across timeframes so learn this setup. 

Thanks
Austin

Asian Morning Thoughts

Morning All,

US markets closed positively on Friday building on the previous days gains. I wrote a bullish piece on Thursday after the close and I don't see any reason to question this for now. NYSE Advancing issues closed at 2058, the highest reading since the beginning of April. Volume was also solid at 1.04bln shares. The key technical level is 1320 in the Eminis and breaks above here confirm a solid low in place.

Emini 60mins:
This is a strong basing pattern under 1320. I am adding to longs above here.


Emini 60mins
Price has now closed out of the downward flag pattern I was showing on Friday. I believe this is a strong inverse Head and shoulders pattern forming.


The XJO and SPI remain in a short term downtrend since topping at the 5000 level. Price struggled at 4900/4905 on Friday and this is my short term marker for a possible trend change back up. There is a possible Ending Wedge pattern I am monitoring but this needs a solid open this morning to confirm. The market is indicated at 4879 and the scenarios I am following today:

i) Look for a early bearish reversal candle out of the higher time frame moving averages at 85 to 90 . Get short with a stop above the high of this candle.
ii) Look for breakout trades above 4905.
iii) Short on breaks of 4860 looking for a retrace down to 4800 level.

SPI 5mins:


Other patterns I am following in the region today:


MSCI Taiwan April 15mins:
Double Bottom Trade setup


Nifty April 15mins:
Looking to get long today out of this 61.8 retrace level. Price exploded higher on Wednesday and thus we should be looking to buy the first pullback. Here it is.5800 to 5825 are the key support levels


BSE Daily:
The Bombay Sensitive put in a very strong closing candle out of the flag pattern. We need to join this price action with stops below the low of this candle

Thanks
Austin

Friday 15 April 2011

IMPORTANT POST- US Markets bottoming

Good Morning All

The S&P 500 gapped down on the open, tested the key 1300/1305 support level, bottomed in the first 30mins and then rallied all day to close on its highs, filling the gap down. This is bullish action no doubt and was in line with the scenario I was following yesterday: http://swingtradersedge.blogspot.com/2011/04/asian-morning-thoughts_14.html. The Eminis hit my target zone mentioned and also bounced very strongly into the close. A bullish hammer candle formed on the Daily right at the 55 exponential moving average. There was a strong breadth reversal with NYSE declining issues hitting a high of 2155 and then closing at 1376. Advancing issues were as low as 119 in the first hour and reversed to close at 1605. This is a strong reversal and indicative of a sold out market. Thus:

i) Have we hit good support levels- YES
ii) Has price respected these levels and reversed- YES
iii) Is there confirmation from breadth- YES
iv) Do we have good patterns to justify good risk/reward entries- YES
iv) Are the usual bearish suspects out calling a high/truncated top- YES

Thus, I believe we are putting in a significant low right here. The key short term support levels in the Eminis are 1295/1300 with resistance at 1320. I believe longer term swing traders should be looking for breaks of 1320 to the upside to get long targeting 1350 and beyond. The alternative scenario is that a longer term triangle may be playing out with a breakout possibly coming as earnings season draws to a close. Nonetheless, this is a great risk/reward area to be getting long. This market has held in despite social unrest in the Middle East, despite threats of a nuclear meltdown in Japan and more European countries going bankrupt. This is a clear signal we are in a strong bull market and I think any breakout will carry us all the way into August/September 2011 in line with a 2007 scenario I have been following for a while.

S&P 500 15mins:
Price tested yesterday lows and put in a significant price reversal closing above the previous days lows. This is a short term double bottom trade


S&P 500 60mins:
Strong hammer candle yesterday right at my target zone. This target zone is the 38.2 retrace level and the previous lows at 1305


Emini S&P 500 June 60mins:
Price has corrected down to this 1300 level in a clear flag pattern. The broader setup is a possible inverse Head and Shoulders pattern. Look for break of this flag to get long

S&P 500 Cash:
A hammer close yesterday right at the 55ema. The inverse head and shoulders pattern can be seen more clearly here.

Emini Nasdaq 100 June 60mins:
Does this look like an impulsive sell off to you? This is a great risk/reward pattern to join the higher degree trend which is up. Note that price made a higher low last night.


These setups confirm many of the bullish patterns I have been talking about in China, India, Hong Kong and Singapore.


For the Wave counters amongst you, below is a parallel scenario I have been following in the S&P 500 for a while. I believe this current advance has been very similar to that of 2007, and if this continues to play out, there is the possiblity of a very strong breakout and advance all the way into June 2011 in line with the end of QE2

S&P 500 Daily 2007:
The Wave 1 high in 2007 was made after a 4 month corection from the May 2006 high (note the parallels with 2010). The wave iii advance ended in Feb 2007 in a ending diagonal pattern. We then had a violent thrust down in March 2007 which proved to be a significant low.

S&P 500 Current:
The similarities with this current advance are striking. The current high topped right into the February window with a sharp pullback into March completing an ABC 4th wave down. I believe a strong breakout is coming soon indeed.


In sum, I believe the US markets are building a significant basing pattern. Breaks of 1320 to the upside would confirm this. If we see a pulback to the low end of yesterdays range, look to buy this with stops below yesterdays lows. If the market trades below 1290 then I think this bullish setup is invalidated.

Thanks
Austin

Thursday 14 April 2011

Asian Morning Thoughts

Morning All,

The S&P 500 attempted to recapture the previous breakdown zone at 1320 on the open and failed in the first 15mins. For the rest of the session the market grinded lower retesting the previous days lows. The short term trend is down and we made another lower high. I believe there will be another swing down to test the 1300/1305 support region before a meaningful low is put in. Bottom line, the key levels are 1320 to the upside and strong support at 1300/1305. Buy breakouts above 1320 and look for basing patterns in the low end of that range.

S&P 500 Cash 15mins: 
The short term trend is down and price failed at the previous breakdown zone. I am looking for a test of the 1300/1305 level.


We saw a strong bounce across the board in Asia yesterday, with Australia being the exception. This is all in line with my thoughts posted here: http://swingtradersedge.blogspot.com/2011/04/asian-end-of-day-summary.html. Indeed, Singapore put in a meaningful low right at the pivot level and closed above its previous gap down; China put in several intraday reversal bars right at the previous breakout zone and rallied strongly into the close; the Nifty surged in a clear trend day; and Taiwan bottomed right at the open gap. This is all indicative of a very strong move coming over the ensuing weeks. Don't be afraid to join this as yesterday was clear evidence of a swing low. I continue to focus on China and the Nifty Index as my strongest plays in the region.

The SPI is indicated at 4903, right at yesterdays previous lows. There is a potential breakdown trade in play to day if this 4900 breaks. Look to get short if this level goes targeting 4860 and then possible 4835. An astute reader here pointed out a flag pattern on the 60mins chart and I think this is valid indeed. Price struggled yesterday at 4935 and this is the clear short term resistance (it is also th2 38.2 retrace from 5000 high to yesterdays low)

SPI 60mins:
Price failed at the moving averages yesterday and made an overlapping ABC pattern up into 4935

SPI 5mins:
The SPI is in a short term range from 4900 to 4935. Look to trade these range and get short on a break of 4895/4900.

Wednesday 13 April 2011

Nifty Long Trade

I have been waiting for a pullback in the Nifty Index on the Daily chart to get long and join the trend and momentum: http://swingtradersedge.blogspot.com/2011/04/weekend-observations_10.html

Finally price on the lower time frames is showing some genuine strength this morning. Price has rallied strongly since the open and recaptured the 5800 level. I am now looking to get long today targeting the previous highs at a minimum. Please see the charts below


Nifty Continuous Daily:



Nifty April 15mins:

Morning Thoughts

Morning All,
It was great to get so much feedback on last night's post. Thank you for your comments and please keep them coming. I value all questions, ideas and feedback so please continue.

US markets were weak last night as we finally broke the low end of the range. Once again, I do believe that the internals and waning momentum were a key backdrop for this breakdown: http://swingtradersedge.blogspot.com/2011/04/asian-morning-thoughts_06.html. The strong rejection on Monday night of higher prices was the initial confirmation from price, and yesterday we saw the follow through. Declining issues have increased on 4 consecutive days now and there was a slight pick up in volume.


Emini June 60mins Breakdown:


I do believe that the market is coming into an interesting buy zone very soon. I am monitoring the 1305 to 1295 zone in the Eminis for a long swing. The Daily trend is up and I am looking to join this. The key is waiting for a "test" or strong reversal bar before getting long. This has not happened yet and I will update in time.

Emini June Target Zone:
This is the 38.2 retrace area and previous important support area.


In regards to Asia today, not much has changed from my post after the close yesterday:http://swingtradersedge.blogspot.com/2011/04/asian-end-of-day-summary.html The setups and trades I am looking at are all summarised there. I will be looking for confirmation from the price action to get long.


The SPI is indicated at 4896, a gap down of 20points from yesterdays Day close. Until I see a deeper retrace into the Daily moving averages, I will continue to trade the shorter term setups. Note that the short term time frame trend is now down. We may see some selling exhaustion today but the scenarios I am following today:

i) Opening gap strategy. Wait for the first 10/15mins of trade and note the morning intraday highs and lows. Buy a 2min candle that closes above this high and short a 2min candle that closes below this low. I use a 10 to 12 point stop for this strategy. Like yesterday, note that a failure to fill the open gap is bearish.
ii) There is potential support at 4875. Only look to get long if there is a strong 5min hammer candle or clear base pattern. Get long with tight stops


SPI 30mins:
This is the potential open gap target


Good luck, I will update through the day
Thanks
Austin

Tuesday 12 April 2011

Asian End of Day Summary

Evening All, 

What a day and finally my patience seemed to pay off. I have been stressing for a while that position traders should be out of the market at these levels and looking for the next setup with a better risk/reward. It took almost a week to get up to the 5000 level once we broke 4900, and yet in one day this is all wiped out. The irrationality of the crowd.

Today was a solid distribution day. The XJO put in a bearish engulfing candle right at the previous February highs. I am still looking for a deeper pullback into the Daily moving averages in the coming days to get long once more for a bigger swing up as per my post on the weekend: http://swingtradersedge.blogspot.com/2011_04_10_archive.html. I do not think this is a one day wonder.

ASX200 Daily:

SPI June 60mins:
4800 looks like an interesting area of support with a former gap up and the 38.2 retrace level. 4900/4902 is short term key support and look for breaks of this down to 4800.


For Day Traders, there certainly was some good money to be made today. Firstly we had a clear Ending Diagonal pattern or 3 wave push pattern coming into today. Note this nailed the 5000 psychological level. We gapped down, tried to take take out the intraday high but failed, and then broke the morning lows leading to a strong trend day down. My mistake today was covering in the 40s at support which is the wrong play on trend days- we have to be willing to hold to the close to gain maximum benefit. This happens time and time again.Continue to look for consolidation patterns to get back into the downtrend.


SPI 5mins Ending pattern:

SPI 5mins gap down setup:
Study these gap plays. These need to become a staple if you want to successfully exploit the Asian intraday moves. Wait for the first 10mins to trade, define the range, and then trade the breaks of the levels for increased momentum. A failed rally this morning out of the gap down was a key lead indicator. 


If you are interested in receiving more of these setups and charts as they happen- LET ME KNOW. I am happy to send these via email etc. I am trying to call out levels etc on twitter and I hope this has been of value.



Today's sell off across Asia has opened up a number of retracement trades I have been waiting for:

MSCI Singapore Continuous Daily:
Has now entered into the key pivot and the Daily moving averages. We made a new momentum high and have now traded from high to low on 2 consecutive days. Looking to get long here on a lower timeframe reversal bar.


Hang Seng Daily Cash:

Has now traded right back to the breakout level. This is a great low risk/high reward entry with stops below the gap at 23,600 to 24,000.

Hang Seng Cash 60mins:
We are retracing into an open gap and the moving averages after a momentum high. Look to buy this pullback. 




I certainly took a hit on my China position. However, price is now retesting the breakout level and the bullish scenario remains as long as the recent gap up and breakout area holds:

FTSE Xinhua China A50 60mins:

In sum, I believe this is the beginning of a deeper retracement in the SPI/XJO. 4900 is short term key support and my buy zone is down at 4800. I will keep trading the short term day setups until I see a clear longer term postion trade. Singapore, Hong Kong and China are all testing key breakout levels and I think they offer low risk buy entries with confirmation. The Nikkei held the 9550 key support level today and the range remains 9550 to 9800. I have moved my stop right up on my open short.

Pls pls give some feedback if you are enjoying some of this work
Thanks
Austin