Today there was a very strong reversal in the Australian market and I think this sets the stage for a good rally to come with a possible retest of the highs at 5000. My morning plan on Twitter was, "SPI, #XJO- looking for a morning reversal out of 4845/4855 targeting 4800 once more. Breaks of 4800 open up 4745". The first part of this trade worked out very well indeed as the market continued its recent downtrend. However, the market bottomed at 4765 prior to my ideal target, and proceeded to rally all day to close unch. As a trader, you have to be flexible and pay heed to the price action- today's rejection of lower prices and close back above 4800 is bullish.
SPI June 5mins:
The SPI is building a great base pattern under 4840. Position traders should be looking for breaks above this level tomorrow to get long, targeting 5000. Stops below today's low.
SPI June 60mins:
A bullish reversal candle out of this mornings lows. There is a potential ABC corrective pattern in place which implies a breakout and retest of 5000 in time.The short term trend is still down so I am looking for a bullish follow through day tomorrow to confirm a low is in place.
ASX200 Cash Daily:
A very strong hammer candle out of the moving averages and support.
BHP Daily:
The heavyweight of the index put in a strong bullish reversal candle. I am looking for price to take out Fridays highs to confirm a low and potential breakout of a wedge/flag pattern. Looking for a retest of 50.
In sum, I believe the SPI futures and XJO have put in a short term tradeable low. Breaks of 4840 tomorrow should confirm this and is a trigger to get long. Stops should be below today's lows.
