Monday, 6 February 2012

S&P500 Update

Given Fridays blowout jobs number, the S&P500 obviously surged to yet another high. My double top fade vs the previous highs at 1330 (Emini futures) did not work but as I write, the Futures have pulled back to this level and I have decided to close my short at breakeven for now.

Obviously the continued strength in the US markets has thrown me off course somewhat, although I have managed to trade around some key levels with mixed success. To me this market is still to be treated nimbly. Certainly this market is overbought with the RSI of the Nasdaq 100 Daily at 78.55 and the S&P500 at 74! This is in very lofty and scary territory. But does the market care? Of course we will get a correction at somepoint but my ideal levels have been breached. Thus, I really dont know and I will now just sit back and watch the US unfold. I am looking for either a Climatic reversal pattern to form or a bearish candle reversal on the Daily. We dont have either. What we do have is a new momentum high on the lower timeframes thus I am looking to buy the first pullback for a short term trade. 

Emini S&P500 60mins:
The consolidation pattern I showed broke to the upside. I dont position ahead of major numbers. We had a strong number and before you could really capitalise, the market was trading at 1333 to 1335. We now have a new momentum high in place, and a retest of the previous high. I think this is a short term buy at around 1330, stops 1325, target 1340/1345. 

Emini S&P500 60mins ii
Interestingly, I showed these base pattern under the 1320 level the other day. If we take the width of this base pattern, and add it onto the neckline of the breakout level, we get a projection to 1342 which was hit on Friday night. I would like to see a retest of that level that fails before calling this done.

S&P500 Daily:
A strong candle on Friday. The saying "bull markets climb a wall of worry" seems more apparent everyday. In the bigger picture, we are now up against another host of resistance levels. Thus I still remain cautious up here. I don't know where this reverses. Here seems as good as any but price has no interest at the moment. 

DOW Daily:
Still in the Double Top zone. The small head and shoulders pattern did not play out on the lower timeframes. Once again, we now await a candle reversal.

EUR Futures 60mins:
A very interesting rounded reversal pattern here to me on the lower time frame. For now we are at the low end of the range and support. However, keep this one on your radar if it does crack.

In sum, it seems that many technicians continue to look for a top that just has not materialised. I guess I have been guilty of this although I have advocated  trading around the edges. Will this week and the full moon bring anything different? I really don't know. We bump from one resistance level to the next. If I see a reversal pattern, you will be the first to know. For now I don't.

Monday Plan

Morning All

I will put up a more detailed post on global markets a bit later. I just wanted to write out my plan for the ASX200/SPI here before the open.

My SPI Range: 4260 to 4285. Outlier level 4300

My SPI Day Trading Plan: I was looking for a retest of the previous highs in my past few posts. We are here today with the SPI indicated at 4275 early given Fridays strong move in the US. I will look to short fade 4280 and 4285 with stops above 4290. Longer term traders should wait for confirmation. I will look to scale out of shorts in the low 60s if we do get a move lower. 4255 could provide potential Long Scalping opportunities today. I will only look to get long and join this uptrend if we see some consolidation and holding of this morning gap up. Then I will join a breakout should that play out.