Thursday, 30 June 2011

Morning Thoughts

Morning All,

Last night the S&P 500 closed above key resistance and continues to build on the low I have been talking about here. I am sure the papers will be littered with headlines this morning about the successful resolution of the Greek problems causing the market to rally. Ha.  Just remember, we bottomed 8 to 9 days ago. Price moves first, then the news comes second. I do still think this market has higher to go still and I will put up a post later on today with potential targets.

S&P 500 Daily:
Confirmation of breakout pattern.

Also saw a successful breakout of the wedge pattern. Currencies love the round numbers and 1.04 proved to be a formidable trading low. Still looking for a retest of 1.10

To Australia today. The XJO tested and successfully held the March lows. Note that price consolidated below this level but there was no follow through to the downside. This is indicative of a classic bear trap and is inline with countless other setups I have seen and posted about throughout Asia:

If the XJO trades and closes above 4565 we have a confirmed short term trend change i.e. High, higher low and then new high. See chart below

XJO Daily:

SPI futures are indicated to open at 4545/4550 thus a 30 point gap up. The key resistance levels are 4550/4555 and then clear room up to 4590/4600. My plan today is to look to fade the opening move in the 50s and if there is no follow through to the downside, I will be looking to join the breakout higher.  It is interesting that the market has failed to build on any of the overnight gaps (i.e. go on to make a new intraday high) over the past month or so. When the market does, that will be indicative that the character of the market has changed at long last. I am hoping today will be that day.