Tuesday, 13 March 2012

Turnaround Tuesday

Morning All

A lacklustre session overnight in the US. In fact, that was some of the lowest volume I have seen in the NYSE. I guess you could call it "consolidation" after such a strong run up over the past 2/3 days, but to me it does not suggest we are in teh middle of a strong trend up.  Either way, the S&P500 is now approaching the previous highs and double top area with the pending FOMC minutes a sure catalyst.

In terms of trade setups, short term traders could look for one more push higher into that 1377/1380 res area for potential short fade trades. Probably best to wait for confirmation first given that this trend has been quite strong. However, this is how trends change i.e. a retest of a previous high that fails to move higher. I have no idea if it fails or just keeps pushing. Certainly this is a mjor res zone but I have called this forever and the market just doesnt seem to care. The next stop would be 1400 BUT I would want to see a clear consolidation pattern before getting long.

Emini March S&P500 60mins:
Clear target and resistance at the 1377 level and previous highs. A bearish setup would be an overthrow of this level and then bearish reversal candles. On the downside, we have minor support at 1365/1367 and more importantly down at 1357/1360. I would probably buy a retest of that 1357 level with tight stops.

To Australia. We didn't see any real follow through from the early weakness yesterday and a sideways day followed. However, I still view this as a great low risk short area and a number of my setups I showed yesterday are beginning to play out.

XJO Daily:
Retest of that trendline yesterday and failure. Short with stops above 4250.

XJO 60mins:
My 55exponential moving average was hit yesterday and price reversed. Need to see more confirmation before calling a top in obviously but this is the first real pullback into the downward trend after a momentum low- a low risk short trade with tight stops.

SPI March 15mins:
These are the clear resistance levels coming into today. Friday highs at 4220/2, the 505 Fib retracement at 4227 and the previous breakdown zone at 4245/4250.

AUDUSD also completed the move I have been talking about:

AUDUSD 60mins:
Price retested the 1.05 level overnight. This could complete a 5 wave move off the top or we could still be within a bigger pciture wave 3 type move lower. Small divergences are beginning to appear. Tough here as this setup suggests a possible double bottom pattern which is bullish for risk. For me, I would wait for some bullish 60min candles to confirm a possible bullish turn. Bigger picture, 5 waves down suggests a major trend reversal?

My SPI range today: 4180 to 4225. Outlier levels 4165 supp and 4245/4250 res.

My SPI day trading plan: Tuesdays are the day when I often anticipate a trend reversal or strong move either way. Don't ask why but it is just a pattern I have seen over and over. If my analysis is correct, I think any early pop up to 4220/4225 should offer a great shorting opportunity with stops above 4230. I will fade this level aggressively. Any failure to sell out of here opens up a potential move to 4245/4250 so be prepared. I deem this the less likely scenario. Yesterday, price chopped around the 4195/4200 level so look to cover any shorts into here once more, re-iniate if it drops. I think the best area to get long is down at 4180 for long scalps and more aggressively at 4165. We have business confidence and home loans at 11.30am today. Note that SPI future rolls are also taking place and this often has an impact on price with some "random" moves so be careful.