Month End

Morning All

In my recent posts, I talked about taking some time away from the markets to re-group and relax. The feedback I have received has been overwhelming. Its great to hear other peoples stories and situations. Pls read through the comments field over the last 2 days as there is some fantastic personal accounts. I feel so much better having voiced some things and trying to focus on some new directions.

I thought I would share some setups here today. I will not be trading these with any size BUT the setups look very clear to me and I am sure there are many who could benefit from this. Equally, I just want to put my analysis out there to prove to myself that I do have an edge.

Bottom line, I see a tradeble short term low in place. I believe in the next few days we will see a good bounce that will take us back up to the highs in some markets. No doubt, this coincides with month end "window dressing" so please be prepared for all kinds of shenanigans.

Firstly to the S&P500. Last night I talked about shorting the Eminis in the 1400/1405 region and looking for a low in 1380/1385: http://swingtradersedge.blogspot.com.au/2012/03/morning-thoughts.html.
The high was made at 1404 and the low was put in at 1386.50. I think we will now see a continuation of this move higher back up to 1415 and possibly higher.

Emini S&P500 60mins:
Low right on the 38.2 Fibonacci retracement. A higher low has formed which is bullish. I think this completes a potential ABC type flat pattern with a move higher coming. The Daily trend is still very much up.

S&P500 60mins:
You can see this higher low and potential flat/triangle type pattern forming here.

Emini S&P500 15mins:
This is the clearest chart for the short term trader. Failed breakdown through 1394/1395, bullish divergences in place and a strong rally into the close. Get long down to 1394, stops below 1385, add to the position if we see confirmation of a breakout above this trendline in the 1400s. There are only so many times a market "tests" a trendline before it gives way. Once its obvious, it will no longer work. Thus I anticipate a breakout

For confirming evidence, we have the DAX in a perfect low risk BUY zone.

DAX 60mins:
ABC off the top into the 61.8 fib retracement and the gap target. Obviously the sell off looks "sharp" for now but that is how C waves are supposed to look. Bottom line, if it is going to turn it will be right now. Look on a Daily chart and you will also see a perfect hit of the Daily trendline.

The AUD is also right in the buy spot with a retest of its recent lows. I have no idea if this does actually double bottom but it is right in the zone for a bounce with a failed breakdown last night.

AUDUSD June 60mins:

To Australia. Simply I think you have to be looking to buy this first retest back into the previous breakzone. This is 4330/4325 in the SPI.

SPI 15mins:
Yesterdays low was 4340 and we are indicated there this am. I think it is possible that we see a bit of early weakness and look to get long into the BUY zone labelled here.

Also note that most of Asian markets were in free fall yesterday with the Hang Seng and China registering -1.5 to 2% falls. However, the SPI was rangebound and held in with only a small sell off late in the day. I think this is indicative of underlying strength.

XJO 15mins:
This is a simple chart to me. A clear base pattern below 4310/4300 and breakout. I think you have to focus on this uptrend as long as 4310/4300 holds. The targets are 4350 (which was hit yesterday) BUT more importantly up at 4380. Note I think that we are also in somekind of 4th wave type consolidation pattern.

My SPI range today: 4335 to 4385 (bullish I know). Outlier levels 4320/4325.

My top ideas:

i) BUY a retest of 4335/4330. We are indicated at 4340 early which is yesterdays low. If we see an early break, I will look to get long into the low 30s, tight stops.

ii) BUY a deeper pullback to 4225/4220. If the initial support zone doesn't hold, I think you have to try one last time to get long into 25/20. Stops below 20. If we break through here, we are indeed a lot weaker than anticipated so be prepared for a breakdown/trend lower

iii) SHORT FADEs at 4262/4265. This zone was offered yesterday and look to get out of any initial longs into this zone. I will short fade here for scalps only. I will then flip to breakout trades targeting the 80s if it does break but I obviously have no idea if it will.

Good luck
Austin

Morning Thoughts

Morning All

It was great to get so much feedback on yesterdays post. Honestly, thank you very much for the comments and it really is interesting to hear about other traders experiences and personal journeys. Sometimes it is a good thing to just let things out and voice situations. I had some of the highest hits I have ever received in yesterdays post so no doubt relating personal experiences rather than just trading setups strikes a chord with many. Here is the link for yesterday if you didn't read:  http://swingtradersedge.blogspot.com.au/2012/03/relax.html

I intend to keep narrative to a minimum today. I wanted to write something however given the interesting moves that happened yesterday in Australia as well as overnight in the S&P500.

The sell off in the S&P500 was sharper and deeper than I anticipated. Is this a sign of a more meaningful high and pullback? Note that the recent high was made on euphoria regarding comments from Ben Bernanke and the potential for more easing. That's how highs should be made- on bullish euphoria. However, also note that we are approaching month end and end of quarter- in my experience, I would anticipate a lot of "window dressing" into this period i.e. a potential rip fest.

Looking at the charts, I can see a few setups.


Emini S&P500 15mins:
Last nights 1405/1407 support zone did not hold and we saw quite a sharp thrust lower. This erased almost all the gains post Ben Bernankes speech which is bearish. However, the low was put in right on an upward trendline and ABOVE the 1385 zone i.e. a higher low. Thus I think the trade here is to sell a retest of 1405 with tight stops, flip to long if we see strong candles above this zone. I would BUY a retest of 1385/1380.

SP500 Cash 60mins:
It is quite difficult at this juncture. I could count this a complete 5 wave advance into the high with a double top pattern with bearish divergences. However, the clear alternative would be somekind of ending wedge type/3 Indians pattern with a further grind higher. It is a bull market and thus you just have to be prepared for this trend to continue.

SP500 Cash 60mins Count:

This is the one for the bears. Clear overthrow of the upper trendline which is indicative of a climatic top. Too early to call it but must be noted.

EURO Futures 60mins:
This is one of the most interesting patterns I am looking at right now. Remember Europe? This is a huge base pattern for the EURO under the 1.33 neckline (futures) and it is trying to breakout. Any failure to do so would be indicative of a FAILED pattern and bull trap. I think any move under 1.3250 would be bearish indeed.

To Australia, Strong breakout yesterday above 4300. Finally. However, how many false breakouts have we had both up and down? Bottom line, I would buy the first retest and if this fails, flip to short for a false breakout. Binary but it is what it is.

XJO 60mins:
Clear breakout above resistance. However, this market is just so frustrating. Could we be looking at a complete 5 wave move off the recent low to trap the bulls? I just don't know. BUY the first retest to that previous resistance zone first.

XJO 15mins:
Note that there was no real pick up in momentum behind yesterdays move. Certainly a reason to be cautious.

MY SPI range: 4320 to 4360. Outlier levels 4300/4305 and 4380/85.

Trade ideas:
1) BUY a retest of the neckline at 4330. Stops 4325

2) BUY a retest of the lower end of the neckline and fib retrace at 4320/4322. If this cannot hold, look to flip to short and look for the potential failed breakout.

3) SHORT a retest of 4360.

RELAX

Two days in a row I have let good trading days slide into negative ones. Analyzing these days, it is clear to me that I have let emotional and personal problems get on top of me. These manifested themselves in some reckless trades, a loss of discipline, and has no doubt left me thinking "how could I be so stupid?" The solution is probably clear- time to relax. Time to breathe. The market will always be there.

These are not losses that will take me out of the game. However, I am more upset at myself given the progress I have made throughout the month in my day trading only to watch it vaporise as we draw to the close. I am upset at the lack of professionalism. Does this sound familiar to anyone? As traders, I am sure we all go through this. And this is why trading is just so difficult. It puts you on the spot everyday as a performance field. If you are not prepared, if you dont bring the right mindset, you will get found out.

As this is my blog, I feel I can write this. The simple truth is that I had my heart broken by someone recently. There I said it. You know that feeling- the regrets, the anguish, the sleepless nights. It is truly horrible. I wish I could just get these thoughts out of my head but you can't will them away. The whole experience can't be explained. I know I am too intense as a person and thus this all boils up.

A friend of mine used to say to me "it's horse time" whenever I was down money. This is one of those times no doubt although not in the trading sense. Time to really get some exercise, focus on my hobbies outside of trading like surfing and music. All the old cliches of "it takes time" ring true and you can either wallow or just try and battle on.

So no charts today. No analysis. I do intend to go over my trading diary today for the month past. Pour over the good, the bad, and the areas for continued improvement. Give it all voice. I just need to get my freshness back before I can trade effectively once more I feel.

I'm sure this is something all traders can do more of. Taking time away from screens, focusing on hobbies, spending time with loved ones and friends etc. Recharging. Trading truly is a performance field and you can get found out very quickly if you are not on your game.

I would be intrigued if some of these words resonate with my readers. How do you bounce back whether it be in trading or in life?

Thanks
Austin

In Ben We Trust

Morning All

Yesterdays breakout trade in the Emini S&P500 played out perfectly. By now I am sure everyone realises that the real move begins about 2 hours before the S&P500 cash open. I don't think you have to be a genius to figure out why this happens.

I got out of my long position from the 1380s into the previous highs at 1408 this morning, only to watch stops go off and a further surge into the close. Hindsight is always a great thing but I try to remind myself that I am a Trader and not a Fund manager. Here are the details of the swing buy position as it played out over the last few days: http://swingtradersedge.blogspot.com.au/2012_03_23_archive.html AND http://swingtradersedge.blogspot.com.au/2012_03_26_archive.html. I always like to go over all my trades to internalise successful patterns as well as identify things that just aren't working for me. I had been fighting this market for a while previously and clearly I was wrong.

The headlines today will all be about the Bernank today but clearly these setups and patterns all appeared before any "catalyst" came. This is why I use the technicals. I always stress this. You just have to anticipate.

Emini S&P500 15mins:
Last nights breakout trade to add to initial positions.

So where does this leave us now? Obviously it is difficult to make a forecast here given the strong move overnight and the frothy sentiment levels. However, I think you just have to keep on focusing on this uptrend. I really don't have any targets/meaningful resistance until 1440/1450. The FED couldn't be more clear that it will do all it can to keep liquidity awash and keep a bid to risk assets. I have tried to fight it at points and it just doesn't make for good trading. Of course at some point the whole things unravels but the market is sending a loud message it doesn't care. Also remember that we have managed to shrug off all weakness despite quite a serious turn date.

To the charts:

Emini S&P500 60mins:

It seems I made a mistake by getting out of my long trade. Clearly we have broken out above previous highs and thus I think the best trade here is to BUY a retest back to 1410/1407, stops under 1400.

Now I don't want to get ahead of myself here, but this is the weekly chart I have had on radar since the 1370 level broke to the upside. The next meaningful target zone to me is 1440/1450.

S&P500 Weekly:

What makes me concerned? Certainly one could count a possible 5 wave move almost complete off the recent lows. Also note that the DOW Industrial have not made a new high yet although I believe it is only a matter of time before they do. Furthermore, clearly sentiment is as frothy as I have seen it which never makes me too cosy.

S&P500 Cash 60mins:
This is in the back of my mind and not tradeable for now unless we see a real meaningful reversal.

To Australia. I came in bullish yesterday and got some of the initial move to 4300 only for the rally to be shot down. I failed to recognise this underlying weakness intraday and certainly my market bias effected my trading. As a day trader, you just can't have a bias and I continue to learn this day by day. In particular, the Australian market has had these amazing ability to frustrate bulls and bears alike so being flexible is paramount.

Today I could make a case for a strong breakout. I could also make a case for a pop and drop. Nice and binary hey.

SPI 15mins:
Key res level today is 4330. Breaks of this open up targets to 4348/4350 with 4380 a big outlier level. Note that I could easily label this a 3rd wave up move but we would need to see genuine strength for this to be the case.

XJO 60mins:
Here are a host of resistance levels the XJO needs to overcome for a "breakout". Bull markets climb a wall of worry and this certainly is a wall indeed. However, the more times this tests these levels, the more likely it is to actually breakout.

My SPI range today: 4310 to 4350. Outlier levels 4305 and 4380

My SPI day trading plan: We are indicated at 4320 early and thus almost right at the previous contract highs at 4330. I think any early dip down to 4310/4305 would be a gift to get LONG with stops under 4300. On the upside, clearly 4228/4330 is the short term target and aggressive traders could fade this early with very tight stops especially given the size of the early morning gap. After the intial 30mins of trade, I will look for strong 5min candles above this 4330 level to get long for a breakout, targeting 4350 and possibly beyond. We will soon know early if this is going to be a genuine move higher or a pop and drop scenario.

Trade Ideas:

1) BUY 4310 early. Stops under 4305. Yesterdays resistance was 4305 and I think 4305/4308 should now act as a decent support level.

2) SHORT FADE 4330/4335. Very tight stops. I will not hang around with this one but I think you have to look for a short fade into the previous highs in case there is no follow through. Be prepared to flip to long if it doesn't sell to join the trend higher.

3) BREAKOUT TRADE above 4330. I will be looking for somekind of consolidation pattern/range in the first 30mins to hour of trade under this 4330 level, and then I will buy a strong 5min candle above this zone.

Going back up to the highs?

Morning All,

Friday's trading plan in the Emini S&P500 worked nicely. I have been patiently waiting for a setup in that market and finally it appeared. I wrote on Friday's post:

"I will be looking to see how price reacts at the clear resistance and neckline at 1393/1395. I will short with very tight stops there and if it fails to sell, flip to long targeting right back up to the previous highs. I will have bids down in at 1380 as per the 60min chart."

During European trading, the Eminis made a high of 1395.50 and sold off quite aggressively all the way down to a low of 1380.50. Then the usual 1hr before the US cash market open ramp job began. Nice. I had bids in the mid 1380s but unfortunately was not filled for me full size at 1380 as the low was 1380.50.

Emini S&P500 15mins:
Bulls strongly defended the low 1380s. I think we now have completed an ABC pattern off the high and thus a breakout of 1395 opens up a move all the way back up to 1410 and possibly beyond.

Emini S&P500 60mins:
I am sure many will be looking at this pattern as a Head and Shoulders Top. Perhaps, but they are personally my worst trading patterns and I think they are very fadeable. Clearly we have back to back bullish reversal hammers out of the 1380s and I think this is indicative of a short term swing low. Look for breakouts above 1395/1400 for a move back up to the high and beyond. Only if price trades back down into the mid 80s would I be more cautious/nervous.

In sum, there is a clear range building from 1380 to 1395. We are testing the upper end of this range right now. Look for breakouts above this for a move back up to the highs and beyond. If we fail to move higher in the next 24hrs, we could be looking at a bigger picture topping pattern but this is the less likely scenario. Only breaks of 1380 would be bearish to me.

Another bullish pattern appearing is the AUD. I have been bearish this market for a while but finally price has failed to move lower.  As per the chart below, price failed to breakdown through that 1.03 level futuers. Furthermore, I can see bullish divergences forming and a potential "3 Indians" move into the low. Looking like a potential bear trap here as long as price holds above 1.03. Only a move back down below 1.03 would make me bearish here at this point.

AUD 60mins June futures:

AUD Continuous Futures Daily:
Low right on the 38.2 Fib retracement.

To Australia. Last week, we had two attempts to breakdown on Wednesday and Friday but price held in. A clear double bottom trade formed in the XJO. Thus, as we begin this week, I think we are also looking at a potential bullish breakout pattern targeting the previous highs and beyond.

SPI 15mins:
On Friday we gapped down, made a low in the first 15minutes, and then grinded higher all day. Clearly this 4250/55 level has been strongly defended. The top end of the range is 4295/4305 and I anticipate a potential breakout in coming days.

My SPI range today: 4270 to 4320. Outlier levels 4250/55 and 4330

My SPI day trading plan: The Emini S&P 500 has opened slightly stronger as has the AUDUSD. Thus I envision the SPI will open somewhere around 4280/4285 first thing. Some trade ideas I have for the day

i) BUY 4270/4275, stops 4265. As per the above, price action has been strong intraday over the last few sessions despite weak overnight leads and weak trading in Asia. I think any dip down to this 70 level should be bought early if we get it.

ii) SHORT FADE 4295/4300, stops 4305. This is a quick short fade and for the nimble only. We can never know if a market is actually going to breakout thus the best trade I have as a short term trader is to sell resistance first, flip to long is we fail to sell.

iii) BUY BREAKOUT above 4300. If I see a strong 5min closing candle above 4300, I will buy a breakout, targeting 4220/4230, stops under 4295. You have to follow this uptrend.

Thanks
Austin

Friday Plan

Morning All,

Last night the Eminis broke down through my 1393/1394 support shelf and we saw a quick 10pt slide. Yesterdays short trade setup with a target down to the low 80s worked well. See the 15min Emini Chart here for the setup: http://swingtradersedge.blogspot.com.au/2012/03/thursday-plan_22.html.

So now we are entering into the first real swing BUY zone. I am fully aware that the market appears overextended and is selling off right into a very interesting seasonal turn date. However, you just have to buy that first dip back into the breakout zone in teh shrot term as shown in the Emini S&P500 chart below.

Emini S&P500 60mins:
The neckline of the breakout was 1370/1375. I will be buying at 1380 which is the 38.2 Fibonacci retrace, stops below this neckline. The target would be back up to the 1400 region and possibly higher.

If we look at the 5min cash chart, I can count a possible A=C move off the top complete into yesterdays lows. Thus, we may not see my 1380 level in the Eminis.

S&P500 5mins

If we look at the DOW Industrial, I can also see a clear A=C down off the high which is now right back into the breakout neckline. A great low risk buy zone.

DOW Indu 15mins:

DAX 15mins:
Retest of the neckline breakout AND a clear A=C off the top. A great low risk buy setup. Note there is also a gap fill target within reach at 6900 if we do see just a little more weakness. Stops should be under there.

I think this is the clearest chart demonstrating the possible trade setups at this point:

Emini S&P500 15mins:
The low may already be in at 1383 overnight. Thus, I will be looking to see how price reacts at the clear resistance and neckline at 1393/1395. I will short with very tight stops there and if it fails to sell, flip to long targeting right back up to the previous highs. I will have bids down in at 1380 as per the 60min chart.

To Australia today. Writing down my trading ideas for the day has been helping my day trading enormously. It forms an action plan for the day ahead, highlights targets and profit levels, and most importantly it spells out an alternate action plan and "what if" scenario when my ideas are clearly wrong. For instance, one of my ideas yesterday was:

"SHORT a bounce into 4272/4275. This is the overnight SYCOMM highs and an inflection point in yesterdays trade....If price doesn't sell here, look for a grind back up to 4290."

I shorted in the low 70s and the market failed to sell and there were clearly some strong 5min candles. Thus, I flipped to long and ran a long position into the 90s just before the PMI. This proved nicely profitable. Being flexible is key.

SPI June SYCOMM 15mins:
The SPI is indicated around 4250 first thing which is below the recent support and lows of 4255/4260. This is bearish.

SPI June 15mins day session chart:

If we see a clean break through this 4255/4260 zone, this opens up a potential move down into 4220/4225. This is the 61.8 retrace off the recent low and a potential A=C pattern.

My SPI range: 4225 to 4265. Outlier levels 4200 and 4280

My SPI day trading ideas today:

i)SHORT fade 4260. This has been the clear support over the last 2 sessions. If we are looking at a genuine move lower, price should fail here. I will keep this tight early as we are looking at quite a gap down. Potential targets are 4240 then 4225, stops 4266. IF there is a strong 5min candle above 4260, I will flip to long targeting 4275/4280. 

ii)SHORT 4278/4280. If there is no sell off early, I will look for short fade this level aggressively. 

iii)BUY 4220/4225. If we do see a trend lower, look for buy setups into this zone. This will be for scalp longs only.

Note there is potential support at 4240 but this is not particularly clear to me

Thanks

Austin

Thursday Plan

Morning All,

The key event today will be the China PMI at 1.30pm Sydney time. China has managed to get itself in the front news again given recent comments from BHP and no doubt there will be a lot of attention on today's data. As I have shown recently, Asian markets are on the cusp of some very meaningful levels, so any adverse number or reaction could see quite a sharp breakdown. It is make or break time.

The S&P500 continues to hold support but no doubt in the short term each bounce appears to be getting weaker and weaker. The inverse head and shoulders target was met, and no price is consolidating in a range. There looks to be a trade building here as the charts below illustrate.

S&P500 15mins:
The 100% projection from the inverse Head and Shoulder pattern was met at 1410. Price is now building a short term range but is looking increasingly vulnerable. It we see a break of that 1398/1400 support level, this opens up a sharp move down to 1380/1385. I would look to BUY a move into the latter zone.

Emini S&P500 15mins:
As you can see, we have had 3 tests of a clear support line. Price needs to bounce and NOW otherwise a break lower is the likely play. I will look to short if this plays out, targeting 1380s for a quick trade only. For now, price is still in a range but each bounce is getting weaker.

AUD 60mins:
The AUD continues to grind lower and is now testing the last of my support zones. I showed a count a few days ago calling for a possible 3rd Wave or C wave move lower: http://swingtradersedge.blogspot.com.au/2012_03_20_archive.html. This continues to play out. The EUR looks very toppy to me here as well on the 60mins. If this is the real deal, then price will just keep going lower and lower. Support will fail. However, as a short term trader, I believe the BEST trade here is to BUY support first, and only short if it drops.


To Australia. 3 days in a row we have sold off despite rather positive overnight leads. My 38.2 Fib retrace was clipped to a tee yesterday and a strong rally ensued only for it to be beaten back down late in the day. Bottom line, after a 3 day sell off into supports, we may see a bounce but the short term trend is down. I intend to play the levels until a clearer picture emerges.

XJO 15mins:
Yesterdays support zone held but the rally did not hold.

SPI June 5mins:
There are the clear levels and boundaries to trade

My SPI range today: 4250 to 4280. Outlier levels 4238/4240 and 4290.

My SPI day trading plan: Rather than give a narrative here, I thought I would just highlight some of my key day trading ideas. I have been writing these down everyday in my journal and it has worked great for me as an action plan. I think it would be interesting to share these with you. We are indicated at 4265 early.

1) BUY 4258/4260 with stops at 4254. This is right into yesterdays lows and the support shelf. Price has to bounce early so keep it tight. Look for 7 to 10pts out of this.

2) SHORT a bearish 5min closing candle below 4260. Very simply, if we fail to hold early, look for this downtrend to continue into 4250 and possibly as low as 4240. Use the appropriate risk management. You just have to follow the trend lower and price action if we fail to bounce out 60. The key for me is waiting for a strong 5min closing candle below yesterdays lows as confirm. The old cut and reverse.

3) SHORT a bounce into 4272/4275. This is the overnight SYCOMM highs and an inflection point in yesterdays trade. Late in the day there was quite an aggressive seller who was hitting 74/75. If price doesn't sell here, look for a grind back up to 4290.

Hope this helps.
Thanks
Austin

Autumn Equinox

Morning All,

Yesterday marked a seasonal date for many of the "timing" experts and Gann followers out there, as we hit the Autumn equinox and the 161 week window for the entire market off the March 2009 low. More importantly for me is the price action into this window. Yesterday we saw a reversal right from the open in Australia and other Asian markets grinded lower for the session. AUD clipped my resistance zone and sold off all day and is languishing on its lows. Are we on the cusp of something more meaningful here? I wrote about interesting divergences going on under the hood in Asia in this post, http://swingtradersedge.blogspot.com.au/2012/03/asian-daily-setups.html, and now we are beginning to see small confirmation.

Lets have a look at some of the setups:

Hang Seng Daily:
We are now beginning to see more bearish reversal candles out of my resistance zone. I have labelled on the chart 3 noticeable bearish candles of late. Clearly this uptrend is tiring and this confluence of resistance has proved very meaningful thus far. Note that this is occurring while US markets have gone higher and higher.

HSI 60mins:
On the lower time frame, there are a number of lower highs in place. Yes this could possibly be a triangle forming of somekind but I think the inability for this market to push higher is bearish. As labelled here, we could be on the cusp of somekind of bigger C wave down. If we open weak today, don't hang about. At a minimum, I think we will retest the previous lows at A.

A Shares 60mins:
This chart is self explanatory. A clear triple top with a very strong sell off. Price has tried to rally out of support but looks to be failing in a clear flag type pattern. If we see more weakness today, this should be a great short setup with stops above the high of the flag pattern. Given that this whole pattern off the low looks like an overlappig wedge, I would anticipate any move lower to be sharp and quick. That is the nature of wedges.

AUD June 60mins:
I put this up yesterday and it proved to be a great short setup. The A=C zone was clipped almost to a tee and a strong reversal ensued. We are now at the low end of the range and coming into supports so this should be the first area to cover. I think it is too early for the bears to get too excited but note this could possibly also be the onset of a Wave C or 3 type move. Perhaps the rally has not had enough "time". More importantly, just look to cover into those supports and re short if it drops.

And so to Australia today. Yesterday my range and outlook could not have been more wrong. However, I actually managed to make money by heeding that bearish open and by following my alternative "what if" scenario. I have no intention of gloating here but my point is to stress the importance of having action plans and alternative scenarios for when the market is doing something you don't expect. The best traders I have seen are the ones who can be truly flexible. I said yesterday:

"I will be looking to BUY any retest of yesterdays lows at 4305 with stops under 4300. Any break of 4300 opens up a potential move to fill the gap into 4285/4290".

I bought 4306 and was stopped out immediately. The opening bars on the 5min candles were solidly bearish and thus I flipped to short and covered into 4290. The rest of the day was about getting into that downtrend and good risk/reward spots.


My SPI range today: 4260 to 4305. Outlier levels 4240 and 4315


My SPI day trading plan: 2 days in a row Australia has bucked the overnight lead. I believe this is a sign that this uptrend is tiring. We did not hit my "ideal" target spot but I can't fight this price action for now. The key zone of support today is 4275/4280 and we are actaully indicated right on this at 4275.  If there is no bounce immeadiately, look to short targeting 4265/4260. Down there I will look for buy setups once more. On the upside, I will look to short fade 4290 with tight stops. Breaks of this open up 4300 to 4305 and this should be well offered and thus I will short more aggresively up there. Much of my attention will be on the open of the Hang Seng and the A-Shares this afternoon given the key support levels those markets are testing.

SPI June 15mins:
The importance of 4278/4280 early. If this drops early, I am looking for a gap fill target at 4260/65.

XJO 15mins:
Some key support zones coming into today shoudl we break yesterdays lows.

Good Luck
Austin

Tuesday Plan

Morning All

I am not going to be presumptuous and head the post "Tuesday Reversal"- last week I did that with rather disastrous consequences. Another good move off the lows in the US overnight sees a small positive gain for the Australian market today. As we saw yesterday, we are grinding up against some serious overhead resistance here in the short term after an extended move off the low. There will be many false breakouts as we grind into this zone. They say that bull markets climb a wall of worry. Nowhere does this seem more apparent than in the Australian equity market (although I would not call this a bull market down here, but certainly overseas).

The below chart shows a number of obstacles our market has to overcome which should be formidable. At any of these junctures, we could certainly stall and reverse this uptrend. That is why it is just so difficult here right now to make any kind of forecasts and it is best not to. I continue to keep my trading in Australia tight and intraday. The US market goes from strength to strength but we are just not following through for now.

XJO 60mins:
Multiple overhead resistance points namely 4315/4320; 4335 and then 4363 as shown on the chart. No doubt the short term trend is up but its a very difficult area to get too bulled up

XJO 60mins ii
We fell short of my first target area yesterday. Rather lacklustre follow through despite positive leads from overseas. Another positive overnight lead should see us attempt to retest that 4315/4320 level at a minimum. Keep following that uptrend for now.

An interesting thing to note which should have a direct bearing on Australia is the AUD. This currency remains one of the key risk assets and a good lead indicator for global markets. It continues to languish in the short term vs overseas equities. I have managed to successfully navigate this one of late and now we are clearly bumping up against some major resistance. Be on the lookout for a potential reversal into here.

AUD March 60mins (this was my count before the contract expired)
Coming into overhead Resistance which is the previous Wave 4 pattern and a potential A=C off the low. I had this as a 5 wave move down off the top and there are a number of wave and momentum relationships that came in at the low.

AUD June 60mins Updated:
Res zone is 1.05 to 1.0550 in the June futures.

My SPI range today: 4305 to 4335. Outlier levels 4290 and 4350.

My SPI day trading plan: Yesterday attempted breakout above 4315 was slapped right back down and we grinded lower for most of the day. It is very difficult in this zone after such an extended run up. We are indicated at 4315 first thing and I do think that we have to give this short term uptrend the benefit of the doubt and thus look for more retests of the highs. I also have a potential short term breakout pattern on the 5min chart as shown below.

From the open, I will be looking to BUY any retest of yesterdays lows at 4305 with stops under 4300. Any break of 4300 opens up a potential move to fill the gap into 4285/4290 so I will be prepared to buy once more down there. On the upside, 4328/4330 was quite significant resistance yesterday so I will look to short fade this level once more for a scalp only as the trend is up. If it fails to sell there, this opens up a cut and reverse trade for a move higher. I do believe it is key to keep an eye on that cash chart at all times as 4315/4320 is my primary target for now until we see any meaningful bearish reversal.

SPI June 5mins:
Potential base pattern here under 4315. Price is forming a flag type pattern right on the neckline which could be the prelude to a breakout of some 40 to 50pts.

Thanks
Austin

Monday Monday

Morning All

As part of my Monday routine, I like to scan the Weekly Charts of major Equity Indicies. As I look at the weekly charts of the US markets this morning, I see pretty strong closing action above the significant 1370/1380 resistance zone. Thus, last weeks lows of 1366/1370 should become a line in the sand for Bull and Bears alike.

One of the main reasons for my bearish stance of late was a  confluence of a major resistance points coupled with waning breadth and volume. This resistance zone comprised  the May 2011 highs at 1370; a previous breakdown zone in 2007 at 1370; and the final major Fibonacci retracement level at 1380 (the 78.6 fib level). See the chart below. If the market was going to turn, for me it was going to be into this low risk short area. We did see a small pullback of some 30pts but ultimately this proved to be short lived and the market went from strength to strength after this event. Once this level broke, we saw a rapid short squeeze up into the 1400s. It sounds so binary but resistance is resistance until it is no more. I think some of our best market information comes from good trade ideas that don't work out. If you think the market should be selling but its not, the market is sending a loud message.

S&P500 Weekly:
1370 to 1380 level decisively broken with a strong closing candle.

DOW Industrials Weekly:
A similar zone of importance was broken. Does this now open up a retest of that internal trendline and possibly the highs?

At a simple glance, you could now say that the break of this zone opens up a retest right back up to the previous 2007 highs! Now I am not going to forecast this far out as this is just not my timeframe. However, my real point is that I now have no interest in fighting this trend higher nor have I tried to since 1370s broke. I tried to short and it didn't play out. This market is going to go where it wants to go- it could top at 1450, 1550 or catch most people off guard and top here right now. For me, only if I see a major price reversal that took out the lows of last weeks candle would I be looking for short setups once more. In the meanwhile, continue to look for pullbacks into the trend on your timeframe.

As we start the week, the S&P500 seems stretched in the short term and testing minor resistance at 1405/1410. There are many "timing" experts out there who are highlighting the importance of the Autumanal equinox adn thus a potential turn- do what you want with this. I will be looking for pullbacks into my 1385/1390 support zone for buy setups first.

To Australia today. Price is clearly consolidating in the short term and I anticipate a breakout early this week to challenge the recent cash market highs and possibly beyond.

XJO 60mins:
Price has still not hit my target zone at 4315/4320. Into this zone I would be looking to scale out of longs and get on the sidelines. I doubt we will suddenly breakout after such a strong run up without some further consolidation first.

XJO 15mins:
A clear flag type pattern over the past few days. We will test the top end of this flag today at 4300 and breakouts would open up the 60min target into 4315/4320.

My SPI range today: 4300 to 4335. Outlier levels 4280.

My SPI day trading plan: We are indicated at 4315 given the SYCOM session. As ever, the match on Monday can be something of a lottery given the influence of weekend news and events. As per above, I do think we have the possibility of breaking out of this recent tight range and test the previous cash market highs (possibly beyond). Thus, I will be looking to buy any dip to 4305/4300 early with tight stops. If this fails to hold, then potentially we could be looking at another dip down to the 4280 support zone. On the upside, the June previous high was 4315 so this should be early resistance. Short term traders/scalpers should be looking to short this with tight stops for a fade only. Ill be looking for a strong breakout candle on the lower timeframes above this to join the trend higher targeting 4330/4335.


SPI Continous June 15mins:

Thanks
Austin