Monday, 23 January 2012

A New Week, Same Message

Morning All

(UPDATE: Eminis are trading 1313 and I have just gone short, 1/2 size. This is the exact breakout conditions I was hoping for and will put on the other 1/2 if this sells off back down with some bearish 60mins reversal candles)

Well this really is it. Every single chart I look at looks overextended and perilious. I wish I had a better message but I don't. I wish I could be more positive. I have traded for many years, I have studied many price charts, and I believe this experience all boils down to these few moments. I have no idea if this will be "the top" or just an intermeadiate high, but either way I want to be ready. Tuesdays are my reversal days. If I see one more push higher today, I will really begin to position myself. Options could really be the play here.

I will keep my message clear and simple as I always try to do.

S&P500 Daily:
Surging right into the overhead resistance. I have found the mid-point of these pitchforks to often be great targets and turning points.

Nasdaq 100 Daily:
Right into the double top zone.

Dow Industrials Daily:
Also surgin right into the Double top zone. You just have to be getting out of longs into this.

S&P500 60mins:
The market continues to grind higher in a wedge with waning momentum. We could be looking at the final subdivisions of a C wave here. Note that an A=C target off the Novmber lows comes in at 1310-1317

AUD Daily:
Right into overhead resistance.

Rally and reversal right out of the overhead resistance. I have shown here how every bounce out of the October bottom has got weaker and weaker. Our latest bounce (which I have labelled the "E" leg) is overlapping and a clear 3 thus far- not a new impulse higher.

So price is right in the zone for a pullback at a minimum. Breadth continues to diverge since December peaks as I have shown in previous posts. In terms of sentiment, I red the other day that the latest bullish sentiment reading of the AAII Sentiment Survey came in at 49.1%. This is the highest reading registered by the survey since Feb 10 2011 (cast your eye back to what happened to the S&P500, ASX200 or any equity index subsequently-collapso).

Thus, I am still in short mode. An ideal scenario would be somekind of "bullish" ovethrow or stop hunt that quickly gets sold into come Monday night. I am sure there are many out there who are now saying this is a "breakout" above 1300- puurrrlease.

My SPI Range today: 4190 to 4225. Outlier levels 4180 and 4235

My Day Tradig Plan today: Modays are always tought to call. AUD has opened small positive which gives us a positive lead. We have solid res in the 4230s and I will continue to short this with tight stops. Any move above there could trigger a potential "breakout" and I will have to join although I do believe this will be short lived. Support comes in around 4190 to 4200, and I will look for scalp longs there only.

SPI 5mins