Monday, 9 January 2012


Seeing the ASX200 cash market come right into the 4100 level at midday. I am thinking this may complete the recent sell off and am looking for a bullish turnaround here. Bottom picking so tight stops.

ASX200 5mins:
A complete 5 down right into 4100. Note the small "breakdown" which could well be a false one.

ASX200 5mins:
Bullish divergences forming here

Monday Monday

Morning All

A rather lacklustre session on Friday night in the US despite the positive jobs number. The Eminis spiked up to the recent highs at 1280 but was met with firm selling, with price closing well back into the range. In my last post, I talked about the possibility of a move up to 1293/1300 before a meaningful top. This is still my central case and will be looking for a potential Tuesday reversal. The range remains 1265 to 1280 and the Eminis are in a clear consolidation range for now so trade accordingly.

Emini 5mins:

Australia has been a lot weaker than I expected which raises the possibility of a false breakout. Certainly there was a very large seller in the Futures market on Friday and we cracked 4100 with relative ease. Interestingly, the low of 4078 was right on the 61.8 Fib retracement. Right now I could make a case either way for this market and hopefully the direction will become clearer now that many traders have returned from their holidays. The charts below illustrate my current thinking and trade setups:

ASX200 Daily:
The low end of the range held but that strong breakout candle has almost been completely filled/retraced. That is not healthy. Ultimately, each bounce is getting weaker and weaker.

ASX200 15mins:
A false breakout from the recent range. Are we looking at an ABC up complete and now a new downtrend once more?

SPI March 15mins:
Note that the sell off from the recent highs does not look impulsive and a low was made right on the 61.8 Fib retracement. This market cannot go lower than here for the bull case to remain valid.

SPI March 5mins:

My range today: 4080 to 4120. Outlier levels 4050 and 4140.

My plan today: Currencies have opened slightly weaker but are recovering. Thus this points us to an open around 4090 I believe. We have sold off 3 days in a row and thus today I will be looking for a potential turnaround/support to hold. I will be scalping 4080/4078 from the long side with tight stops. It is bearish indeed if this level drops. I will look to get out of any longs in the 4100 region and more aggressively short fade at 4120. Very simply, today I am trading the range with a bullish bias until more evidence emerges.

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