Wednesday, 8 June 2011

End of day summary- downtrend continues

Good Evening All,

The ASX200 failed to mount any kind of bullish follow through today and the downtrend re-asserted itself once more. The inability for the market to stage any bounce or follow through in the first 30mins was a lead indicator. From a day trading perspective, buying supports and shorting when it drops continue to be the name of the game. I still believe that we are trading at a great support zone in the bigger picture thus I don't think this is the area to be pursuing short trades from a risk/reward perspective as a swingtrader.I put up a quote today on twitterfeed from one of my favourite traders, Paul Tudor Jones: "I develop idea on the market and pursue it from a very low risk standpoint". I feel this is particularly apt in this current market.

XJO Daily:
It has been a real volatile ride for the Australian market this year. We are now trading right at the low end of the range once more. There was no follow through from yesterdays hammer candle but there are support levels a plenty from 4475 to 4550. We just have to be patient in this zone.

SPI 60mins:
This downtrend has proved very whippy and volatile. Price has made a new low once again but is trading at the low end of the recent channel. Consider swing buys on breaks above 4585/4600.

SPI 5mins:
The market built a range in the first 30mins today with little follow through from yesterdays bounce. As the morning range broke, a strong sell off ensued taking out the 4555/4560 support zone cited on twitter. Get short when support drops. Nice shout out from Simon at 4520!

The pattern is not particularly clear to me in the short term. Support is 4500 and 4520 with resistance at 4545/50 now.

Financials Daily:
A inside day formed today in the solid support zone. Look for a possible expansive move higher tomorrow if we take out Tuesday's highs.

MQG Weekly:
I am hearing a lot of doom and gloom for MQG right now. However, there is actually a very interesting confluence of support from 30 to 31.50. The chart below shows the 61.8 fibonacci retracement from the 2010 high to 2009 low.

MQG Daily:
There is also a fibonacci relationship between the major waves down from the high. 30.50 is a level where C=1.618A. Note also that the 30 level was a key low in May 2009 bfore the strong lift off. There are strong bullish divergences in place currently.

Shanghai Daily:
Shanghai continues to put in a constructive basing pattern at this support zone. Is this a lead indicator for markets? There is an aggressive entry above the recent highs but the big level to me remains at 2850 which this market must clear.

In sum, the market continues to make lower highs and the trend down remains in force. However, we are trading right at the low end of a solid support range and the market is getting quite oversold. For aggressive traders, this remains an area to look for buy setups and low risk setups. If bounces fail to materialize, be quick to cut positions as ever.


p.s. Looking for a low at 1277/1278 in S&P 500 Emini futures tonight based on fib relationships. Write that down :)