Monday, 7 May 2012

Monday Morning Panic=BUY?

Morning All

Well I had a whole host of things I wanted to write this morning but I will throw most of this out of the window having seen where the Futures have opened. There is no point dwelling on what HAS happened, but rather an action plan for today and going forth. This post will focus on the shorter term outlook. I will update Daily scenarios in due course.

It all looks very ugly out there. However, these are the exact times to keep a cool head and be planned. It is also often the time to fade the crowd and do the uncomfortable thing. Looking through the charts today, I actually think we hold in here but I would be surprised to see a genuine bid until the Europeans and US step in. Asian traders will really need to be patient and perhaps sit on the sidelines or take low risk long trades with tight stops.

Emini S&P500
We have gapped down over 10handles right into the A=C target of 1345. If I see some bullish reversal candles, I will look to get LONG. A break back above 1355 is needed for confirmation. If this level doesnt hold then look for support in low 40s. I will not be shorting down here.

EUR 60mins:
Gapped down right into support BUT hanging on a thread. Possible bear trap but only if we see real bullish reversal candles.


SPI 60mins:
These are the support levels I have identified today. I think the bigger zone of support will be 4300/4290 and I will look for confirmation down there to get long. Note a minor support level at 4322 which is the 61.8 Fibonacci retracement.

XJO 60mins:
Looking like a gap down into the previous breakout zone. Keep this chart on your screens today. Should be a formidable buy zone after 3 days of weakness. 

XJO Daily:
Note that 200day moving average comes in today around 4300.  In the bigger picture, this double top pattern concerns me especially given the fact we topped right on the day of the 50bps cut- a bullish climatic event.


Nikkei Daily:
The Nikkei will be back online today. They will certainly be hit with a bit of a shock. Note the 2 major target levels I have labelled here. Once again, waiting for confirmation to get long is the right play. No need to fight this breakdown for now.


HSI 60mins:

A-Shares 60mins:
Still in a wedge like pattern with 2500/2480 key support. My target range was not hit but note the res level on the Daily chart underneath. 

A Shares- Daily:

Bottom line, there is a lot of panic out there given the European headlines and markets are coming into some solid supports. I do think we will hold in but waiting for confirmation is key. No need to jump the gun. If this keeps falling and spiralling out of control- fine, let it do so. However, the best risk/reward shorts are not in this zone and if you are going to join this breakdown, you have to keep it nimble or have very wide stops. In the bigger picture, I could certainly make a bearish scenario but lets focus on the here and now.