Saturday, 28 January 2012

Weekend Homework

Just some weekend work. These are all the Daily setups on my radar currently. The market feels tired and I have stressed this enough of late. We have hit/are testing so many important resistance levels globally. We have begun to see some reversal candles in some markets. Next week will be an interesting one indeed.

S&P500 Daily:
A pop above the pitchfork midline and above the H+S neckline. A Daily close back below this would be a classic pop and drop or climatic spillover as some like to call it. When you combine this setup with all the other markets, it looks ominous to me. 666.5 X 2=1333.

Rally right into overhead resistance and setting up a classic Double Top trade. Price showed a interesting reversal candle on Thursday. The wedge like nature adds to the climatic appeal. Have an entry signal ready to get short.

NASDAQ 100 Daily:
Island reversal pattern right at the top end of the range. This is bearish. Note that this is playing out whilst Apple released blow out numbers. This is exactly the sentiment conditions and socioeconomic backdrop for a meaningful top. I stressed that just because price closed above the previous high, this does not make it a decent  "breakout" trade. I feel the lack of base pattern and the very overextended nature sets this up for a classic bull trap. Look at the ascent of those trendlines- we are clearly in parabolic stage. Is there much more room left?


DAX Daily:
Rally right into the 61.8 Fib retracement level and overhead resistance with price leaving a Doji star on Friday. These Fib levels are my favourite for a turn. I successfully identified the DAX low back in September and October and this served me very well with a bottom shortly following across the board. Please see these posts: AND
I feel that a very similar scenario could play out here to the DOWNSIDE with a top forming.


ASX200 Daily:
We saw a reversal candle on Friday right out of the top end of the range. Look in the past at what has happened in this zone after a bearish reversal candle. I looked for a top last week and originally nailed the A=C high, but after much back and forth trading price finally broke out to the upside. However, I do still think this is all part of a bigger picture Wave 4/consolidation pattern, with a resumption of the downtrend to come.

ASX200 Daily ii:
Very interesting that Fridays reversal was right on the 200day moving average. This line acts as a magnet and look at the past examples labelled here. It has dawned on me that the market needed to get to this line much like the DAX, S&P500 etc. I was bearish early as this was the target for the XJO. Now we are here

Rally right into overhead resistance. To me this really does look all part of a bigger 3 wave move. A reversal candle would confirm a meaningful top.

KOSPI Daily:
Rally right into overhead resistance and the top end of the range. We are seeing some reversal candles begin to form.

In sum, I have no desire to chase the market up here for a bigger picture swing. Keeping it tight and nimble in either direction until we see more confirmation is the play. I think we will see a decent pullback at a minimum in coming days if not a genuine high. We cross that bridge when we come to it.