Thursday, 29 December 2011

Morning Plan


Well it seems that the big boys are still away and they left the kids on the dealing desk to press the red sell buttons. The S&P500 hit the first resistance zone I talked about yesterday and sold off quite sharply although on woeful woeful volume:

I think it is too early to jump to any strong conclusions. The chart below clearly shows the important short term boundaries for the S&P500. My plan was to fade the Eminis vs the clear resistance levels and this played out overnight leaving us right in the middle of the range. 1220 on the downside is key for the bulls and 1260 has now become the clear resistance level. We closed at 1245 on our lows so I would expect a bit more downside in the short term before any meaningful bounce.

Eminis 15mins:
The target I mentioned yesterday was nailed. We could be looking at a potential ABC move off the low which indicates new lows coming. However, focus on the key support levels of 1220

To Australia today. In yesterdays session we saw very bearish action straight from the open. The SPI futures are indicated at 4035 and thus we are looking at 30 point gap down on today's open. We are now approaching the low end of the range so it is time to lighten up shorts. The key levels are 4030 and 4000 as shown below. Given it is thursday and holiday season, I really don't expect a strong short term low to form so be quick and nimble if buying at these key support levels.

SPI March 15mins:
Yesterday we saw a strong bearish reversal right out of 4140s and the previous high. Now we are trading at the low end of the range at 4030.
SPI Continuous 60mins:
4030 and 4000 are the previous lows and the target for this move.
My range today: 3995 to 4050

My day trading plan today: We will open right on the previous lows at 4030 thus I am in no rush to short first thing. However, given yesterdays price action, looking for shorts is the right play at the right level. I will look to fade the 40s aggresively with stops above 4050. If 4030 drops, get short looking for a move down to 4000. This might be a big ask today. Potential scalp longs at 4030 and the low 4000s. I really don't think 4000s break today so this should be a low risk/high reward buy area.