Monday, 5 March 2012

Monday Plan

Morning All

Looking like a relatively quiet open first thing this morning in Asia. There is a headline that has just hit the wires which states: "ECB says Greek PSI participation may fall short". Currencies haven't moved on this but it is early in Asian trade and  the big boys are not around yet. I'm sure this whole week is going to be dominated by confusing and misleading headlines as we approach the PSI deadline which will play havoc with the algos.

The focus for me in Australia today will very much be on this 4245/4250 level in the SPI futures. We continue to under perform overseas markets and the attempted move above 4300 was swiftly beaten down. Despite a positive lead on Friday morning, we popped and drifted lower for the rest of the session. Quite simply, we have a great breakdown trade here if this 4250 level does break looking for a gap fill at 4200 and possibly lower.

SPI 15mins:

SPI 60mins:
Are we looking at a failed breakout and a possible Head and Shoulders building on the 60mins timeframe?

AUD 60mins:
AUD continues to respect the levels with precision. I showed a great low risk short setup on Friday night into the 1.08 level futures. AUD hit a high of 1.0799 and then sold off for the rest of the session. Also a clear climatic reversal pattern, a failed "test" or rally, and now we are testing supports once more. If 1.07 breaks, this should really begin a new trend lower.

My SPI day trading range: 4233 to 4290. Outlier levels 4220 and 4205.

My SPI day trading plan: As I state every Monday, it is something of a lottery trying to call where we are going to open first thing. Fridays SYCOMM session indicates us at 4262 but no doubt we will deviate a small bit from this. I anticipate a retest of 4250 at a minimum. Quite simply, I will continue to buy 4245/4250 with very tight stops for scalps trades only. If we fail to bounce meaningfully from here, I will be very quick to look for the breakdown targeting 4230 initially and then as far down as 4200 (I doubt we see that today). This is the trade where the money will be made I believe. On the upside, Fridays highs at 4290 will be a great short fade level with stops above 4300. All action in the middle of this range is noise so pay heed to the price action and candles.