Thursday, 9 February 2012

Thursday Plan

Morning All

The S&P500 opened weak last night, found a low in the first hour of trading, then grinded higher for the rest of the day. Sounds familiar right? I haven't talked about the S&P500 Eminis for a few posts, but my recent trade idea played out well. To recap:
" 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."

This was the chart I put up and explains the trade idea and outcome:

S&P500 Eminis 60mins:
Price made a new high above 1330 post the jobs number, and momentum also made a new high. Momentum making a new high is the key here. Thus, our highest probability trade is to buy the first pullback. The pullback into the low 1330s provided this opportunity. Scaling out of longs into the 40s is/was the target.

So where to now? I really don't have much of a target for this move as there are multiple areas for this move. We could be close. We could trade as high as the previous highs at 1370. I just don't know and until we see a climatic reversal candle or pattern, I will sit and wait and be nimble.

S&P500 Daily:
Sure there is a resistance zone here. We are way overbought. This corresponds to a clear res zone in the DOW Industrial. However, the trend is very much UP and it will top when it wants to.

DOW Industrials Daily:

S&P500 Cash 15mins:
I thought this was interesting. This is the move off the most recent swing low. I have tried to make this very simple and show the number of waves within this move up. Clearly we are now in the 9th wave which would imply that this impulse move is ending. Sure we could have yet another extension :)

To Australia today. Yesterday my cited plan was great with a recommendation to sell the SPI in the 4255 to 4260 zone. We made a high of 4255 early and sold off. However, there really wasn't much follow through at all. In fact it was desperately quiet and volume was woeful. I myself trading horribly thinking that we would breakdown through the lows only to watch the market grind higher and higher throughout the course of the day.

My resistance zone today is 4260 to 4265. We really should sell off early from here if I am right with my recent bearish call

SPI 5mins res zone:

SPI 15mins:
I didn't realise the importance of this trendline yesterday. Note how many times price hit and respected this. If we see a strong bearish move below this, perhaps that is the signal that we are about to trend lower.

My SPI range today: 4235 to 4265. Outlier levels 4275/4280 and 4200.

My SPI Day Trading Plan: We are indicated at 4260 this morning given the SYCOMM sessions.  I believe there should be solid resistance at 4260/4265 therefore I will look to short here early with tight stops. Look to cover shorts into the low end of yesterdays range at 4235/4240 and wait for confirmation/breakdown patterns if this is a genuine move lower. If 4265 lifts to the upside, that opens up a retest of 4275 and 4280. Only if price can clear these levels will I look to join the trend higher and potential buy setups. Note that RIO was very strong yesterday and this seemed to buoy the SPI. Thus, keep RIO up on your screens today to see if there is more follow through. Perhaps this Glencore/Xstrata merger is keeping these miners well bid.

Thanks and Good Luck