Friday, 23 March 2012

Friday Plan

Morning All,

Last night the Eminis broke down through my 1393/1394 support shelf and we saw a quick 10pt slide. Yesterdays short trade setup with a target down to the low 80s worked well. See the 15min Emini Chart here for the setup:

So now we are entering into the first real swing BUY zone. I am fully aware that the market appears overextended and is selling off right into a very interesting seasonal turn date. However, you just have to buy that first dip back into the breakout zone in teh shrot term as shown in the Emini S&P500 chart below.

Emini S&P500 60mins:
The neckline of the breakout was 1370/1375. I will be buying at 1380 which is the 38.2 Fibonacci retrace, stops below this neckline. The target would be back up to the 1400 region and possibly higher.

If we look at the 5min cash chart, I can count a possible A=C move off the top complete into yesterdays lows. Thus, we may not see my 1380 level in the Eminis.

S&P500 5mins

If we look at the DOW Industrial, I can also see a clear A=C down off the high which is now right back into the breakout neckline. A great low risk buy zone.

DOW Indu 15mins:

DAX 15mins:
Retest of the neckline breakout AND a clear A=C off the top. A great low risk buy setup. Note there is also a gap fill target within reach at 6900 if we do see just a little more weakness. Stops should be under there.

I think this is the clearest chart demonstrating the possible trade setups at this point:

Emini S&P500 15mins:
The low may already be in at 1383 overnight. Thus, I will be looking to see how price reacts at the clear resistance and neckline at 1393/1395. I will short with very tight stops there and if it fails to sell, flip to long targeting right back up to the previous highs. I will have bids down in at 1380 as per the 60min chart.

To Australia today. Writing down my trading ideas for the day has been helping my day trading enormously. It forms an action plan for the day ahead, highlights targets and profit levels, and most importantly it spells out an alternate action plan and "what if" scenario when my ideas are clearly wrong. For instance, one of my ideas yesterday was:

"SHORT a bounce into 4272/4275. This is the overnight SYCOMM highs and an inflection point in yesterdays trade....If price doesn't sell here, look for a grind back up to 4290."

I shorted in the low 70s and the market failed to sell and there were clearly some strong 5min candles. Thus, I flipped to long and ran a long position into the 90s just before the PMI. This proved nicely profitable. Being flexible is key.

SPI June SYCOMM 15mins:
The SPI is indicated around 4250 first thing which is below the recent support and lows of 4255/4260. This is bearish.

SPI June 15mins day session chart:
If we see a clean break through this 4255/4260 zone, this opens up a potential move down into 4220/4225. This is the 61.8 retrace off the recent low and a potential A=C pattern.

My SPI range: 4225 to 4265. Outlier levels 4200 and 4280

My SPI day trading ideas today:

i)SHORT fade 4260. This has been the clear support over the last 2 sessions. If we are looking at a genuine move lower, price should fail here. I will keep this tight early as we are looking at quite a gap down. Potential targets are 4240 then 4225, stops 4266. IF there is a strong 5min candle above 4260, I will flip to long targeting 4275/4280. 

ii)SHORT 4278/4280. If there is no sell off early, I will look for short fade this level aggressively. 

iii)BUY 4220/4225. If we do see a trend lower, look for buy setups into this zone. This will be for scalp longs only.

Note there is potential support at 4240 but this is not particularly clear to me