Monday, 12 December 2011


Morning All,

On Friday, I talked about covering shorts into SPI 4200/4220 and S&P500 Emini 1225/1230, and looking for long setups:

This did eventually play out v.well but the real move came after hours in the SYCOMM session once again. If you are a swing trader and trying to capture these moves in Australia, you really do need to watch the first 1 or 2 hours of European trade or go home flat. There was some late selling pressure during Asian hours on Friday with the SPI even breaching the 4200 level and trading as low as 4170. However, we saw a solid bullish recovery off this low and this is indicative of a longer term swing low now in place!

The SPI is indicated at 4250/4260 this morning thus representing a 50 to 60pt gap up. AUD has done little since re-opening post the weekend thus doesn't offer any particular clues.  A much quieter week on the Economic data front in Australia. Eyes will be on the FED meeting come Tuesday.

My Range today: 4220 to 4265. Outlier levels 4287/4290.

My Plan today: My gap strategy is firmly in play today and thus I am looking to short with a potential move back down into the 40s at a minimum and lower for a gap fill. As per the charts below, the SPI has rallied right back into the previous breakdown zone which represents a great short term sell level with tight stops. Thus, I will be looking to fade early at 4260 with tight stops and will short more aggressively at my outlier levels of 4287/4290 but I doubt we will get up that high today. There should be support at 4245/40 and any move into 4220/4230 should be used to cover any initial shorts.

As per above, I do think we have now seen a good swing low in place. I am looking to get long to exploit this at the right level vs stops at 4170. Tuesdays are my trend days and thus I will be looking tomorrow as a more likely day to get long.

SPI Dec 15mins:
A clear ABC move off the high and a failed breakdown through support/low end of the channel. Thus, I think we have a bigger picture swing low in place coupled with a bullish Daily setup. Thus, look for dips in the coming 24hrs to get long vs 4170
SPI 5mins: 
Retest of previous breakdown level should provide some short term res. Thus as a short term trade, I am looking to fade this mornings gap.