End of the Month

Morning All,

I don't want to go into too much detail regarding US markets in this mornings post. I see no reason to change my current view and setups which were all illustrated yesterday: http://swingtradersedge.blogspot.com.au/2012/02/looking-for-short.html. Seeing headlines of "DOW 13k, whats next?" does nothing but add to my grizzly outlook at this juncture.

I scaled into shorts in the Emini S&P500 last night with an average around 1370. We did see a initial fall given headlines coming out of Europe but this proved to be short lived. I have no idea if this will reverse or where it will top, and I will only add once I see clear bearish confirmation. For now I want to be positioned small as I just cant miss out on this opportunity. For now stops are above 1380.

For what its worth, I do think we will see a little bit more upside in the next 24hrs. A number of global indicies look like they want to and need to "retest" previous highs before any new impulse down can begin. We also have the LTRO announcement at 10.15GMT and this very well could prove a catalyst to the upside for this algo headline driven market. Shock and Awe have proved to be the name of the game from global central banks so why stop now? I believe EUR400-500 is expected by the market so watch out for a number in excess of that. I believe any strong pop would set up ideal conditions for a climatic bearish reversal.

As per above, a number of markets look set for a retest of their previous highs. If they get there, this would set up great Double Top short trades. This is how trends change:

DAX 15mins:

Hang Seng 15mins:

AUD futures 60mins:

To Australia. Yesterdays SPI plan and range played out very well indeed. I said:

"I think the strongest play is to short early into 4275/4280. If we fail to sell off from here early, then I could see the market rallying all the way to 4300 and possibly 4310. Thus, I will be short fading 4275/80 with tight stops and looking to cover in the 4250s".

4281 proved to be the top and we made a low at 4250. That 4250 level continues to be defended. To me, very simply you have to get short when that level breaks but for now, we are still very much in a range. Given what I have said above, I would not be surprised if we actually popped today and made a challenge for the previous highs and above. Its a tough call here as the cash market never hit those previous highs and we cannot rule out one more push.

XJO 60mins:

Fell short of the ideal target area. Will we try and make one final push into those levels at 4315? It could be argued that the current lower high is bearish and indicative of a truncated high.

XJO 15mins:

Key support zone held yesterday (4250 SPI). Thus, this does setup the potential for one final push higher as per the count below as long as 4250 SPI/ 4255 XJO holds.

My SPI Range: 4250 to 4300. Outlier levels 4230/4233 and 4310. This implies that the 4250 does not break. If it does, don't hang around.

My SPI day trading plan: Very simply, if 4250 breaks, I will be getting short looking for a bigger move down to 4230 then 4200. However, until that time I will remain open minded with the possibility for a push all the way back up to 4300 (unlikely today). I think the most probable play is a rangebound type day until we hear more out of Europe. Thus, I will be looking to buy 4250/55 with very tight stops and short fading 4265 and then 4280 with tight stops also. Breaks of 4280 open up a push to 4300/4310 and I will be getting long to join a retest of the XJO cash highs.

Thanks

Austin

SPI March 5mins:

Looking For The Short

Morning All,

There was a solid bounce off the lows in the US markets overnight which led to new highs across the majors.....just. I believe this now sets up for a perfect short trade in the next 24hours. Yesterday I wrote:

"A ideal setup (Emini S&P500) would be a push above 1370 to 1375/1380 and then a sharp reversal back down below 1370. This would be a short signal for me".

I believe this trade is now very much on track. Once again, despite the higher high, underlying advancing issues made a lower high coming at at 1600 vs 1800 on the 24th and 2174 on the 23rd. What I find very interesting is the back to back 4th wave type patterns i.e. Flats. Ultimately this implies that we are in the final throws of this impulse.

S&P500 15mins cash:

S&P500 Daily:
Right into the previous highs and the Double Top zone. Have to be anticipating a climatic reversal here.

S&P500 60mins:
There are clear momentum divergences going on into this clear 1370 resistance level. Furthermore, I can count an almost complete 5 wave advance into this recent high. Nice channelling, nice alts between 2 and 4, 3rd wave the strongest etc etc. Its all there.

The NASDAQ 100 looks tired at this 2600 level. The DOW Industrial is grinding higher and not impulsing in a clear wedge/overlapping type pattern. All in all, its setting up for me and now you just have to have a clear short signal/plan before pulling that trigger.

We are also seeing clear confirmation from Asian indicies. These are often the first to turn and are a lead indicator I have found. Yesterday the Shanghai A shares had a very significant reversal out of 2600. This is a clear climatic turning point to me and I see a decent pullback over the next week or so at a minimum. The Hang Seng is still grinding lower after making a high at the A=C target and 61.8 Fib retracement perfectly.

Shanghai A Shares Daily:

A shares 60mins:

Australia opened on its highs yesterday right into the sell zone, and trended lower for the rest of the session. .

XJO 5mins:

My SPI range today: 4250 to 4280. Outlier levels 4295 and 4300/4305.

My SPI day trading plan: Yesterday we trended lower for the whole day from high to low. Given the bounce in the Eminis overnight, we are indicated at 4270. Thus today is a question of whether we pop and drop to continue yesterdays trend, or are we going to have one more push into the highs? I really don't know the answer to this but I think the strongest play is to short early into 4275/4280. If we fail to sell off from here early, then I could see the market rallying all the way to 4300 and possibly 4310. Thus, I will be short fading 4275/80 with tight stops and looking to cover in the 4250s. Look to re-short if 4250s drop with a target down to 4220/4200 although very unlikely today. If we push above 4280, I will flip to long trades targeting 4300/4305

SPI 15mins Bearish Chart:
Target hit with a clear spillover and reversal. Breaks of 4250 will flip this trend to down and open up a genuine move lower.

XJO 60mins Bullish chart:
The XJO never quite made a new high. I could possibly label yesterdays move a C wave as part of a flat. We had something similar in the S&P500 overnight. This implies a retest and possbile break of 4315 before we begin a new downtrend. Thus if we dont sell early, be on the lookout for this.

Monday Plan

Morning All

I apologise but I am still having problems uploading my charts.

The S&P500 cash made a new high on Friday night and thus fulfilled my recent trade idea to buy in the low 50s looking for a retest of the recent high. Now it gets tricky. I think there is the potential for a pullback/reversal come Tuesday or Wednesday this week as once again this uptrend is running out of steam.

First of all, the S&P500 is now right at the 1370 target zone. No doubt I have gone early a few times but this is the nature of wide target zones. A ideal setup would be a push above 1370 to 1375/1380 and then a sharp reversal back down below 1370. This would be a short signal for me.

S&P500 Daily:

Despite price making new highs, breadth has really failed to follow through and shows some bearish divergences. For instance, NYSE closing advancing issues of late:

24th Feb: 1630 (closing Advancing issues)
23rd Feb: 2174
16th Feb: 2281
13th Feb: 2468

As u can see, despite price making new highs, underlying issues are just not confirming this recent push higher which is not healthy. Volume has also dropped off a cliff with only 640k on the NYSE on Friday which is the lowest reading I have seen for a while. Furthermore, we once again have clear momentum divergences on the lower time frames given Fridays test.

S&P500 cash 15mins:

I have often found Tuesdays to be my trend reversal days so I am on the lookout for climatic reversal candles out of the 1375/1380 zone in coming days.


Australia has now fulfilled the recent forecast I made for a retest of the highs also. Now things get very tricky indeed. We are at the top end of the range and thus some significant resistance. Furthermore, momentum is now clearly waning. However, the short term trend is up. Thus, I believe the smart play as a swing trader is to be getting out of longs and standing on the sidelines. I believe it will be very difficult for the market to breakout here without a consolidation pattern/range first. Thus I am looking for a climatic reversal pattern to short and if instead we get consolidation, I will look to join a breakout to the upside and focus on this uptrend once more.

XJO Daily:

Clear res zone here. Bull amrkets do climb a wall of worry but its tought to be long right here right now in the short term.

XJO 60mins:

My SPI range: 4250 to 4300. Outlier levels 4310 and 4350. .

My SPI day trading plan: It is always very difficult to give an accurate range on a Monday given the weekend influences. Furthermore, today we have a leadership vote at 10am which may have some influence on trade although I doubt it. Thus I think the best play is to wait and gauge the early price points. As per above, I think we are now at the top end of the range. I will be looking to short fade 4295/4300 with tight stops and looking to buy the solid support at 4250. Keep playing this range unless we see a clear breakout of either of these levels. I will join a break of 4300 SPI on the upside, which opens up XJO targets of 4335 and then 4350. Note the SPI March contract high is 4294 and thus if we do trade higher, reference those XJO levels instead.

SPI March 15mins:
Target hit and clear divergences for now.

Thanks
Austin

Friday Plan

Morning All,

I am having problems putting my charts up so I will have to update later in the day.

A quick note. The Emini S&P500 sold off on the cash open and put a low in right at 1350 before reversing strongly and trending higher for the rest of the day. I talked about buying 1350 to 1355 support zone yesterday and this trade played out nicely: http://swingtradersedge.blogspot.com.au/2012/02/thursday-plan_23.html. You just have to buy that first retest of a strong breakout level. I believe this market is now on course to retest the 1368/1370 high in coming days and would not be surprised if we get a bullish/climatic overthrow. 13 50 now becomes a key marker for the bears.

The AUD was a key lead for risk markets yesterday. There was an attempted breakdown early that triggered some sell stops,but then the currency immediately reversed and trended higher for the rest of the day. Once again, yesterdays ABC pattern here proved to be a great low risk support play: http://swingtradersedge.blogspot.com.au/2012/02/thursday-plan_23.html. I believe this opens up a move right back up to the previous highs also.

In Australia, the 4250 SPI level (4265 cash) remains a key support level. We sold off sharply yesterday, making a spike low of 4246, but ultimately we held in and grinded higher for the rest of the day. Thus this remains a key marker.

My SPI range today: 4250 to 4305. Outlier levels 4289/90 and 4230.

MY SPI day trading plan:
We are indicated at 4276 early and thus right at the top end of the range. I really am not sure how long this uptrend lasts for and I would need to see a climatic reversal out of key resistance levels before I could call it a done deal. The key levels are 4289/90 and then 4300 on the upside. I will look to short fade these levels only if i see a reversal candle on the 5min timeframes. Look for breakout trades above 4300 if we don't sell early. Any dips down to 4250 should be bought once more.

Thursday Plan

Morning All

I am rather torn here in the short term. I see the S&P500 pulling back into a great support zone in the short term. However, certainly there is growing evidence that the market could be on the cusp of a more meaningful pullback. The past few weeks have shown me the importance of following the trend at such junctures and thus I am inclined to look for buy setups in the next 24hrs.

Hopefully these charts illustrate my thinking in the US markets.

S&P500 Cash 15mins:
Breakout and retest of the breakout zone. Our highest probability trade is to buy this with stops below 1350. If we do see a solid break of 1350, I would be inclined to think that 1368 was indeed a more meaningful top. For now, buy this dip.

S&P500 Emini 60mins:
This is my Buy zone in the Eminis at 1350 to 1355. The pullback off the high looks corrective and the high was made on peak momentum. Peak momentum readings imply a retest of that high at a minimum. The target for any rally is 1370 to 1375.

AUD March Futures 60mins:
I also think that the Australian Dollar is at a great support zone here. Any bounce and break of that downward trendline should buoy risk markets. We have a perfect A=C off the top and a failed breakdown through support yesterday.

However, this is what is making me torn. Clearly we are in the final throws or sub divisions of this trend as we approach the May high of 1370. Breadth and volume continues to deteriorate (although this has not seemed to matter so far in this engineered bull market). The Dow Industrial has made a new high above the previous May highs whereas the Dow Transports looks to have topped out well short of its May highs. This is a bearish non-confirmation although not a sell signal in itself.  Furthermore, sentiment readings are no doubt at extremes. Thus, these buy setups I show here are for short term swings only.

It does seem to me we are in the final waves of this move higher as per my count below:

S&P500 Cash 60mins:

DOW Indutrial 60mins:
None of these wedges have worked in the US of late. However, once again we see a clear ending wedge pattern/3 Indians just as the DOW clips the 13,000 level. Will this setup lead to a sell off? Just need the confirmation.

So in sum, I am looking to BUY 1350/1355 in the Emini S&P500 looking for a swing back up to the previous highs at 1370. Any strong move below 1350 would be bearish to me.

My setups and trade ideas in Australia have worked very well the last few days. My SPI ranges have been on the money and just following that trend on the lower timeframes has paid dividends. We have hit my targets in the SPI and the cash market made a high yesterday just shy of 4310. Thus we are now at the top end of the range but the short term trend is still up. Also note that we have seen strong momentum and thus my highest probability trade is to buy the first pullback into the trend.

SPI 60mins:
Hit the top end of the range and target. However, we have seen strong momentum and thus I am looking to buy the first meaningful pullback. Obviously if we clear this 4285/4290 level, that would open up a potential bullish breakout.

My SPI range: 4270 to 4295. Outlier levels 4230 and 4300.

My SPI day trading plan: Will the political situation in Australia have an impact today? I do think that any potential challenge or overthrow of Labor leadership will be taken as a major positive by the market. However, I am probably getting way ahead of myself here. However, markets do like to think ahead and discount the future. We are indicated at 4260 this morning given the overnight session. Once again 4250 provided great support yesterday and was the low. I will buy this level straight up once again today if we get the chance. Please see the chart below. On the upside 4290/93 are potential short fade levels and 4300. Ultimately we will be stuck within yesterdays range but I have a bullish bias given the trend. Only a break below 4250 would open up more meaningful short trades for me.

SPI 5mins:
4250 continues to be great support. Keep buying it until it drops.

Thanks
Austin

Wednesday Plan

Morning All,

Despite all the euphoria surrounding the Greek bailout package, the reaction from the US post their holiday break was subdued indeed. The market tried to push high but grinded lower for the rest of the day with a small pop into the close. Volume was anaemic. The cash market made a high of 1368 which is just short of that 1370 May high. Interestingly, AUD trended lower for most of the day and there are major divergences going on there vs US equities. However, it does look to me like we will still see a push higher in the short term in the S&P500.

Emini S&P 500 60mins:
This is the megaphone type pattern I have been showing of late. We saw a clear spillover at the top end that has resulted in a 10 handle pullback. However, momentum made a new high, the move off the top looks overlapping and corrective, and we are testing previous supports. Thus I think the most probable trade is for the market to hold in here with a swing back up to 1370. Up there ill be on watch for somekind of reversal pattern.

S&P500 Cash 15mins:
I'm not sure if these wave counts are correct. My main point is that we have seen a clear breakout from consolidation and are trending higher. Our highest probability trade is to buy the first pullback to that breakout zone. We are there or thereabouts. Only if this fails can we deem this move off the recent high as more meaningful.

To Australia. Yesterdays SPI day trading plan played out very well. We saw a strong trend day that took us up to the previous highs and target of 4280 where the market made a short term high. I stressed the importance of following the intraday trend and paying heed to the previous days strength.

SPI 60mins:
We hit the 4280 target yesterday

XJO Cash 60mins
However, the cash market did not challenge the previous highs. The more likely trade is that we get there before a more meaningful top/pullback.

My SPI range: 4250 to 4300. Outlier levels 4230 and 4220.

My SPI day trading plan. We are indicated at 4255 early. Yesterday 4250 provided a major inflection point. I believe this should offer good support early. Thus, I will be looking to buy this level with tight stops, looking for a run back up to 4280 and possibly beyond. Note yesterdays low of 4230 is also a good long scalping area if 50s do not hold. On the upside, I will be looking to short fade 4280 but this is for a scalp only. Given that the cash market did not hit its previous highs, I think we may still see a push higher which could take the SPI to as high as 4300.

p.s. the Hang Seng is the one market I have been watching with real interest. The market nailed that resistance zone and sold off. When I drop down to a 5min timeframe, I clearly see an impulsive move lower and a corrective rally. This implies more weakness ahead. This may have an influence on Australia but as ever, trade the underlying.

Hang Seng Cash 5mins:

Bullish Reversal?

Morning All,

Well yesterday the SPI futures exploded out of the blocks and blew away all resistance points cited here. All this within 5minutes and before the cash market had even opened!  Its not often you see that. Obviously there were many traders out there, like me, who were looking to to short the 4200 level and quickly got swept. As ever, keeping your risk and your stops tight is paramount.

Yesterdays rally certainly refutes much of what I said yesterday in the XJO. I talked about that 4250 level in XJO being a key marker and it seems we will pop through this today. Its been a choppy, volatile ride of late and following the intraday trend really has been the only thing that has paid.

So where does that leave us? I will just show you a few charts I am looking at rather than try and make any forecasts at this point. We have a Eurozone meeting going on and really any headlines can pop out of that (although no doubt they will ensure any headlines have a very positive spin to them).

XJO Daily:
The high of my bearish reversal candle is about to be taken out. We are still trading at the top end of the range however. Looks like that upward sloping trendline held in.

XJO Cash 60mins:
Looks like a clear failed breakdown through that support zone. Time to cut and reverse? The overlapping nature of the move lower implies that we could very well have an ABC move off the top and thus this is a new impulse or trend higher with the first target right back at the previous highs.

SPI March 15mins:
A very strong opening candle yesterday and it always pays to follow this momentum. We are now approaching a solid res zone at 4255/4260 which could act as a first stopping point. However, the trend has certainly flipped to up once more and it looks like a clear impulse off the recent low after yesterday. Thus, looking for buy setups/pullbacks into the trend is the play I believe.

As you can see, it all looks quite positive here but certainly we have no new highs in place and are nearing the top end of the range. Furthermore, the S&P500 Eminis are nearly right at their May highs and the Hang Seng had a major reversal yesterday right at my sell zone. Thus this could/should keep a lid on our market in the bigger picture. Not sure. Just have to follow what is at the moment.


Hang Seng Daily:
I showed this chart several times. Yesterday we saw a perfect reversal right out of the res zone. Finally nailed one of these bearish setups! This is the 61.8 Fibonacci retrace off the top and A=C projection off the low.

Hang Seng 15mins:

My SPI range today: 4220 to 4260. Outlier levels 4200 and 4280.

My SPI day trading plan: Given the US public holiday, we have no clear overnight lead. European markets merely played catch up with the dramatic opening yesterday. Im sure everyone will be transfixed on headlines coming out of Europe and that will be the catalyst either way.

The short term trend has certainly flipped back to up. Thus I will be looking for levels and buy setups to get into this trend. The first obvious area of support comes in at 4235/4240 and then down at 4218/4220. I will look for long trades in these zones. Any selling should be capped at the 4200 level given yesterdays momentum. A move below there would be very bearish indeed. On the upside, I will look to short fade that 4255/4260 res zone but only for a scalp trade. If we fail to sell there, look for consolidation patterns/breakout setups to join a push to the previous highs at 4280.

Thanks
Austin

Monday Plan

Morning All

The key focus for me as we start the week, is to focus on this new downtrend in Australia. I have been looking for a turn for a while with mixed success, but when the RBA kept those rates on hold, I just knew it was the catalyst to compliment my bearish technical backdrop. Please see this post: http://swingtradersedge.blogspot.com.au/2012/02/thank-you-rba.html. The SPI tried to retest that 4250/4255 breakdown level post the announcement a few times but failed. Time to switch guns.

The chart below neatly illustrates this change in market profile. We have transitioned from a clear uptrend, into a congestion pattern/topping pattern, and have now broken through support to start a new downtrend. This remains the case unless 4250 XJO (4220 SPI) is recaptured.

ASX200 Cash 60mins:

ASX200 Daily:
We made a lower high right at the resistance zone. This is bearish. We formed a congestion pattern that broke sharply on Thursday and gave bearish confirmation. Stops for longer term traders should now be placed above this candle.

When I look overseas, I see a number of markets that are "testing" the top end of their range or solid resistance areas. At a minimum I anticipate a pullback and this will not help the bulls in Australia. Note how underperformance which is a key tell about the underlying weakness in our market.

S&P500 Daily:
I have shown this chart a few times. We are clearly in a strong resistance area. Sure for now there have been many false dawns and no doubt it has been resilient. That's what the printing presses do. Patience is key. 1370/1375 looks like the next target if we are not there already. Either way, the upside is really limited vs the risk out there. This is a double top trade that you just have to be prepared for.

Hang Seng Daily:
I put this up on Friday and it worked a treat. The Hang Seng has rallied right into the 61.8 Fib retrace off the high, a potential A=C target, and an open gap. This should be a formidable short zone at 21500 to 21700.

DAX Daily:
Price remains capped right at the A=C target.

My SPI range today: 4150 to 4200. Outlier levels 4130 and 4220.

My SPI day trading range: Monday mornings are always difficult to call given the weekend news events etc. Currencies have opened up quite strongly vs Fridays close and the S&P500 was up small overnight. Thus I imagine we will open anywhere from 4180 to 4190 and right into the short fade zone. I will look to short early with stops above 4200. I will try and short again more aggressively at 4220 if this bounce is stronger than anticipated. On the downside, 4150 held firmly on Friday and this should be the first obvious area to cover shorts. The bigger target is 4120/4125 but I doubt we see this level for a few days. As per my notes above, my plan is to focus on this downtrend with the appropriate risk. We have seen new momentum lows and a clear break of a consolidation range. If this proves to be a bear trap, so be it.


SPI March 60mins:
Clear res zone from 4180 to 4190. Round numbers often also act as target points.

Thanks
Austin

Australia Continues to De-Couple

Morning All

I don't seem to be having much luck currently in the US markets. I thought a correction was likely underway and was looking for a retest of the mid to high 40s to short. We got that and more. I said here yesterday:

"Supports are stacked everywhere from 1330 to 1337 and thus I anticipate we will hold in short term......I am looking to short a retest of 1350."

The Emini S&P500 hit a low of 1334.25 and then surged as the cash market opened. The first big pullback into support in an uptrend always gets bought. I had bids in from 1333 and didn't get filled. I had offers in to get short in the high 40s and did get filled. My stops for this short is above 1360. Not really liking the look off it so far as certainly the rally appears stronger than anticipated. If you pull up the chart of APPLE, it seems the whole market is moving in tandem with that one stock! No new highs anywhere from what I can see and much of what I said yesterday is still valid I believe: http://swingtradersedge.blogspot.com.au/2012/02/correction-likely-underway.html

S&P500 Eminis 60mins:
I have this chart labelled on my screens and thus far, the market appears to be attracted to these zones. Yesterdays strong bounce probably opens up a push to that upper trendline in the low 60s.

What is working for me is my Australian analysis. I said in my morning SPI report:
"I feel we could be looking at a genuine break and trend lower into 4140 and then 4125. Thus I will look to short at around 4170/75 if those 80s drop"

Given Westpacs results, we sold off sharply through 4180 straight out of the blocks and trended lower for most of the day, making a low of 4130. This despite some bullish jobs numbers. All does not appear healthy to me despite US markets continuing to grind higher.

XJO Daily:
The top end of the range proved solid resistance as I called for. A sharp breakdown candle yesterday. Focus on this new downtrend as long as the highs of yesterdays candle are not taken out. That simple. That upward sloping trendline may mean something in the short term although I doubt it.

SPI March 60mins:
A new momentum low and break of the support zone. Thus, our highest probability trade is to short the first pullback looking for a retest of 4130 at a minimum.

My SPI initial range: 4160 to 4190. Outlier levels 4125/4130 and 4200.

My SPI day trading plan: We are indicated at 4180 given last nights rally in the US. This is right into yesterdays highs. Straight up I would be looking to short fade this level with stops above 4190. Any move above 4190 is likely to be capped at 4200 and thus I would look for short fades again up here. On the downside, 4160 should be the first target zone for any shorts and I would look to cover there. Breaks of 4160 open up a move back down to yesterdays lows of 4130 but i doubt we push that low today.

As a sidenote, the Hang Seng will open today right into a major sell zone. Keep this on your screens if you see a gap up and reversal. This sell zone is the open gap, an A=C target and the 61.8 Fibonacci retracement off the top. Should be a big one indeed.

HSI Daily i:

HSI Daily ii:
The 61.8 Fib in more detail

Correction Likely Underway

Morning All

I know what you are thinking- calling the top after 1 down night is foolish! Well hear me out.

First things first. The S&P500 made a new high and then swiftly reversed. The DAX and the DOW Industrial both failed to breach their highs which is a bearish divergence. EUR continues to trend lower and AUD once again failed to challenge it previous highs. Despite the S&P500 making new highs, NYSE advancers hit a high of 2000 (vs previous highs of 2600) before closing at 1220.

Yesterday I said that the higher low on strong volume in the S&P500 was indicative of more strength to come and a move above 1350 should be expected. We got that and then dramatically reversed. In fact, it was a classic pop and drop with a number of stop orders going off only to be met with no genuine buying. That is a failed breakout pattern. The lack of follow through and strong reversal is a key tell that the nature of this market is changing. Luckily I covered my short at breakeven (almost) during Asian hours before the big rip. I am now looking to get short once more in the mid to high 40s with a stop above last nights high.

Emini S&P500 15mins:
Failed breakout. Remember failed patterns are the best. Supports are stacked everywhere from 1330 to 1337 and thus I anticipate we will hold in short term. Trend followers should buy these supports with tight stops. I am looking to short a retest of 1350.

Sometimes you have to keep it simple. These Daily charts couldn't be more clear.

DOW Industrial Daily:
Right in the Double Top zone. A candle reversal pattern is building.

Want an example of these Double top Daily trades? Look no further than the S&P500 in 2010:

S&P500 Daily 2010:
This Double Top trade led to a 50pt pullback

Nasdaq 100 Daily:
I showed a great chart the other day with the Nasdaq 100 RSI at 85: http://swingtradersedge.blogspot.com.au/2012_02_10_archive.html. One of the most overbought readings I have ever seen. Last night we saw a huge bearish reversal candle right out of 2600. That reversal candle is indicative of major exhaustion!

There are also some clear wave counts to support an end to this impulse:

S&P500 Cash 30mins:
I showed this in the past and now it is complete. We have a clear 9 wave advance out of the last major swing low. I have kept this very simple noting all the major highs and low. Last nights squeaker high completes the sequence and impulse. Correction now underway.

If you want more specifics, this count couldn't be more ideal:

S&P500 Cash 30mins:
A complete 5 wave advance with peak momentum readings in the 3rd of 3rd zone which they should be. The higher low on Wednesday was the C leg of a 4th wave pattern and last nights failed breakout completes the 5th wave.

One more bit of evidence is the AUD which I have talked about a lot recently:

AUD March 60mins:
This sure looks like a topping pattern to me with clear boundaries. The first test of support always holds in uptrends. Any retest of that neckline will result in a strong breakdown to me. Risk markets arnt going to fall unless this one does. Once again, note a new S&P500 high with AUD still well off its recent highs.

Now I am not saying this is the TOP TOP of the market and we are set to crash. I am saying that I think a correction is underway. I have no idea the shape, form, magnitude of this. As a trader we can never predict the outcome of a trade. All we can do is manage the position after the trade has been made and monitor the markets behaviour. To emphasise once more, as a swing trader the main goal is to minimise risk. The low risk trade is either to buy supports in the 1330s with v.v.tight stops or to get short back into the mid to high 40s with stops above 1358. Given the Daily picture and the charts I have shown, a bigger pullback is the more likely scenario. Everyone will probably be expecting the S&P500 to hit that 1370 previous high but the market is never going to play out in the obvious way.


Despite seeing US markets on a tipping point, Australia appears to be right on the low end of its range. Very simply, if the SPI doesn't hold 4180/4190 early, then we are looking at a major breakdown to 4125 first target at a minimum.

SPI March 60mins:

My SPI Range: 4140 to 4220. Outlier levels 4125 and 4230. This range implies that the 4180/4185 zone does not hold. I have no idea if it will to be honest.

My SPI day trading plan: I will look to BUY supports straight up at 4180 to 4185. This is a major zone of support and thus we have to buy it first and only get short if it drops. This is a low risk trade. If we do not hold in immediately, I feel we could be looking at a genuine break and trend lower into 4140 and then 4125 (unlikely today). Thus I will look to short at around 4170/75 if those 80s drop. The first 30mins will be key in shaping the course of the day.

Thanks
Austin