Yesterday's morning post proved to be timely and effective: http://swingtradersedge.blogspot.com/2011/05/when-crowd-panics-keep-your-head.html. There was a strong gap up in Australia and the market built on these gains throughout the day. Scanning across my Australian charts, I believe the stage is set for a strong snapback up to 4800 and possibly beyond.
Let me just run through some of the charts I showed yesterday and update:
ASX200 Cash Daily:
Price closed outside of the lower Bollinger band highlighting a panic extreme. Yesterday we closed very strongly back within the band which gives a BUY signal according to this system. Very nice bullish reversal candle. Note all the previous occurrences over the past year or so have seen very strong rallies in the following days.
Strong bounce and wide ranging candle right off my target area. Note the completely engulfing candle. The higher degree trend is down so this is a short term long swing only
Price once again hit and respected the upward trendline. Would need some more confirmation today for me to confirm a strong low in place.
A great recovery out of the low end of the wedge pattern and the initial long entry shows some good gains. Watch this downward trendline carefully for confirmation.
SPI June 30mins:
A clear 3 wave push down lower followed by a strong initial bounce. This is one of my climatic reversal patterns and I am looking for a bounce higher back into 4800 once more and possibly beyond.
As for overseas markets, the markets that I had labelled as Good in my good, bad and ugly post, just got a bit better. http://swingtradersedge.blogspot.com/2011/05/bull-trap.html
This is the height of the current crisis. Well this pattern looks clearly corrective to me and price has recovered the 2800 level. Price needs to now break beyond this open gap area for a clear long signal and change of trend
Emini S&P 60mins:
A great recovery out of the low end of this wedge pattern. Resistance at 1325 broke yesterday and I am now looking for a break of the downward sloping trendline to confirm a more meaningful low
In sum...buy it. Aitken probably went long on the low yesterday :)