I have been following a potential short setup for some while in the Nikkei: http://swingtradersedge.blogspot.com/2011/03/nikkei-vs-s-flash-crash.html. Price did rally into the 9750/9800 target level I cited some days ago i.e. the open gap and 61.8 retrace level. In the last 3 days, this market has traded in a clear distribution range and has failed to move higher. I got short on a breakdown of the recent range (see 5min chart). Inital targets are 9350 with stops above 9770.
Nikkei June 5mins:
Got short at 9640 on the retest of this mornings breakdown level.
Nikkei 15mins:
Nikkei 60mins:
Price has rallied right into the open gap. Momentum divergences are appearing. The moving averages are still positive on this timeframe and thus we must be wary if there is no follow through to the downside. Note that the Daily trend is down and we are shorting the market into the moving averages.
I will keep you posted on how this plays out.
Austin
