Looking across the screens I see weakness across a number of risk assets. I just wanted to throw out a number of great support areas for traders to bear in mind coming into Asian Trading. Support levels are one thing, but waiting for price to respect and reverse out of these levels is another. I always use confirmation when entering a position as it keeps one out of trouble and increases the chances of a profitable trade. No doubt I have been looking for a low in the ASX200 the last few days but my trigger timeframe for position trades, the 60mins, has not given me an entry signal so this has kept me out of trouble. If I could give any advice it would be this- Price should confirm the direction indicated by the setup before taking a position. If your setup indicates a long position, you should require the market to move up in some specified manner before you should be comfortable taking a position. Whether it is the market taking out a previous high/low, a strong reversal candle, consecutive follow through candles etc etc, you must must have a predefined way to enter the market that confirms your setup. This is an expensive lesson I have learned through the years and I really hope you can use this to improve your own trading.
And so to the levels:
4700- Pshycological round number; market indicated here on open
4690- Open gap from the 24th March
4685- 61.8 retrace level
Thus there is a good confluence in the 4685/4700 region. An ideal long signal would be a break of 4700 on the open with a sharp spike into the 90s that is completely recovered and 4700 level regained. Look for hammers out of here to confirm.
Nikkei June Futures:
9800- previous breakout level on 60mins
9700- open gap and a confluence of moving averages on the Daily
S&P 500 Emini:
1338/1340- previous breakout level and the 38.2 retrace from the last swing low
2825/2850- Trendline off the lows; previous major swing lows; the 61.8 fib retrace off the last major low
1.07- Round number and previous consolidation area prior to the strong breakout
I will be looking to play a number of these levels today. In a number of markets, we have traded from high to low on 3 consecutive days- this now sets up the potential for a bullish reversal