Wednesday, 13 April 2011

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: 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: 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