Friday, 16 March 2012

Asian Daily Setups

The market has gone rather quiet and thus its rather a perfect time for me to write and update some of the Asian Daily setups I am looking at. We all know that US markets and the DAX are going from strength to strength. Quite simply, that's whats happens when central banks pump trillions of $$$ into the system- it just has to find a home somewhere. It has been rather a different story here in Asia. Most markets are still way off their May 2011 highs and are showing an interesting disconnect here. I guess the million dollar question is whether we play catch up right here or are Asian markets actually signalling a more meaningful turn ahead?

China to begin with.

A-Shares Daily:
A bearish reversal candle that comes after a clear overlapping wedge type pattern. Interestingly the recent high materialised right on the intersection of those trendlines. For what its worth Jeff Greenblatt states that this top occurred in the 610 day window off the bear market peak from a few years ago. Do what you want with that. That candle to me is what really matters and I anticipate a continuation off this move lower at a minimum in coming days. China is the engine behind global growth right?

Hong Kong Daily:
The market high still coincides with the 61.8 Fibonacci retrace off the top, the A=C level off the low AND the gap target. A significant zone of resistance. I showed this chart a number of times and price still has not moved higher. I anticipate this market to also move lower in coming days/weeks if my china scenario plays out.

Australia Daily:
This has been the real dog of the region. The elevated $AUD has made our market a natural deterrent for most overseas investors. Clearly we are within a consolidation pattern and once again testing the top end of the range. There have been many false breaks both ways. However, the central point is that every time we get up here, we have been slapped back down. Keep trading that until it stops working.

And the one market that has genuinely caught a bid due to government intervention is Japan. Interestingly, that market is now also right at the top end of the range and into a major resistance zone right on the 1 year anniversary of the Tsunami. I am not suggesting shorting this market as clearly the others are weaker and we are dealing with a strong uptrend here. However, the point to stress is that it is right into its target zone.

Nikkei Daily:

So in sum, Asian markets have been capped thus far at significant resistance zones. The S&P500 could obviously keep pushing higher and thus provide a catalyst for our markets to breakout. However, clearly right now there is a disconnect going on for whatever reason. It pays to heed the message of the underlying market. If we cant go up despite the S&P500, NDX, DAX all soaring, then surely the path of least resistance will be down.

We will see in coming days. March is always a very interesting month


Friday Plan

Morning All,

I thought I would keep today's post pre-open short and sweet. There are a number of Daily charts in Asia that I am looking at that I find very interesting indeed and I will put these up later in the day.

The XJO short term trend remains up and pullbacks over the last few days have been shallow. However, we still have not hit the first target yet at 4315/4320 and I believe we will do so before any meaningful pullback ensues.

XJO 60mins:
Clear resistance zone coming in at 4315/4320. This is the obvious target for now and this is the area to lighten up longs if u managed to catch this move especailly into the weekend. Support is down at 4260/50 but I don't think we will see this before the top end of the range is clipped.

XJO Cash 5mins:
Today we will retest Wednesdays highs at 4295. Any failure to sell out of here early opens up a push into the res zone at 4315/4320.

My SPI June Range: 4290 to 4335. Outlier levels 4280 and the moon.

My SPI day trading plan: The SPI June is indicated at 4310 early. Given the roll, my continuous charts are somewhat out of sync and there is not enough data/volume yet to show meaningful chart levels for the June. Thus referencing that XJO cash chart will be paramount over the next few days/weeks.

The Intraday range has been relatively small for the past 2 days and fading at strategic spots has worked well. Given the small range, there is the possibility we breakout today to test those previous highs. Thus my plan today is to short fade 4315 out of the blocks with tight stops. If we fail to sell there then I will look to flip long and target those cash highs which correlates to 4330 in the June contract. Up there I will look for candle confirmation to short fade once more. On the downside, I will look to buy 4300 with tight stops. Any break of 4300 opens up a potential retest of 4280 but I doubt we trade this low today.