The SPI futures have opened at 4918 just short of yesterdays highs at 4922. Once again, I must stress that I don't have a clear trade here. I believe we are at the top end of the range and I am happy to be out of the market at these levels. Certainly yesterday's price action did feel tired but there is no clear distribution pattern yet. Patience is a key quality of a successful trader I believe and until I see a solid risk/reward setup, I will not risk my capital. Loner term, I am looking for a deeper pullback into the Daily moving averages to get long once more but here I advise caution.
I think today could be a range type day. Scenarios I am following
i) Potentially fade at 4922/4925 targeting 4905. If this res level lifts, look for potential breakout trades targeting 4940+ (target the ASX200 February high)
ii) Buy support at 4902/4900. Look to play a potential range. This level is a key marker for the short term bullish scenario.
The Australian sector indices are trading right into meaningful resistance levels. I am not calling a top here as the underlying momentum is strong, but I do believe we are certainly at the top end of the range. Always think risk/reward. Ask yourself, does it make sense to be long the market coming into these levels as a trader?
Energy Sector Daily:
This is a potential Double Top pattern in the making. Needs a bearish reversal candle to confirm. Either way, we are at solid resistance and this is NOT a breakout trade given the lack of consolidation.
Financials Sector Daily:
The Financials are now retesting the top end of this broad range. The last breakout was strongly rejected.
Materials Sector 60mins:
The materials sector is now right back to its previous highs. This is resistance
Therefore, I advise caution here in Australia. We are trading at resistance levels and we must respect this as traders. Look for either short term topping patterns to get short or wait for longer term consolidation patterns to join this trend for a new swing up. Sentiment is once again getting very bullish and I can see a number of bullish recommendations flying around. Be careful in these situations.
The Nikkei is trading at the key 9700 support. Price has failed at 9800 right at the open gap. The Daily chart has left 2 consecutive indecision candles right at the downward moving averages. I am looking to get short on breaks of this range. I outlined this trade here several days ago:http://swingtradersedge.blogspot.com/2011/03/asia-top-setups.html AND http://swingtradersedge.blogspot.com/2011/03/nikkei-vs-s-flash-crash.html
Nikkei 15mins June:
The Nifty continues to move higher from the strong base pattern. Yesterday we saw a strong close above the 61.8 retrace level. A small downward trendline comes in at 6000 and this looks like a short term target. I believe traders should continue to look for setups to join this strong trend.
Nifty Continuous Daily:
The Hang Seng closed solidly above the downward trendline I have been monitoring. Note the strength we have seen since that failed breakdown of horizontal support. In the short term, the market seems a bit overextended and I would be wary of jumping in here despite yesterdays close.
Hang Seng Daily:
