Day Trading the SPI

A lot of my trading energy of late has been spent day trading the SPI on the SFE (ASX200 futures). I have been registering some really good results of late and I am in the process of writing up a more thorough Day Trading programme for trading this market. This is not just a programme covering trading setups but encompasses the characteristics of our market and the essential skills needed. I think this will be of great interest to many readers here and those on the convore chatroom who are day trading Australian stocks. I genuinely believe that successful trading is all about skill development, having a back tested trading plan, and discipline. This is even more apparent in Day Trading which requires a very particular skillset. It is my hope that my programme builds on all these areas and will be of great value not just to myself, but for others.

I do gain a lot of inspiration from the works and teachings of SMB Capital, a proprietary trading firm in the US that is a real pioneer in trading development and education. Why can't this model be replicated here in Australia? It certainly can. I write this blog to offer educational material and I hope to take these initial steps even further. Yesterday was a great trading day in the SPI. I called out some of these setups on twitter  and missed others. As ever, I find so much value at the end of the day from studying my recorded video via Casmasta and the charts. Look at this 2min chart below and ask yourself how many of these setups are in your trading repertoire? When you combine these setups with strong trading skills and the ability to read the order book, you are on your way for a truly profitable trading career.

SPI 2mins:

1) Fading the morning gap down- these trades play on the herd behavior and panic. Target is yesterdays close i.e. the open gap.
2) Joining the downtrend to get short- the morning rally ran out of steam at the moving averages. Note the bearish reversal candle right at the gap target. Short as supports break.  Higher timeframe trend is firmly down (see 60mins chart)
3) Cover short at previous intraday low- possible low risk Long at these level? Stopped out
4) Buy major support- the SPI is always defended at the round numbers. I called out size on the bid at 4601 and 4600. A real low risk play
5) Breakout play- strong thrust off 4600 with a higher low formed. Buy as price makes a new high thus defining a new uptrend. I called out big offers at the lows 20s- once they lifted we were off back to the 40s.

SPI 60mins Downtrend:

Thanks
Austin

S&P 500 Emini

Seeing a small recovery here in Asia today and the Eminis are holding the previous low of the 18th May at 1316. This pattern here does not look like a bearish breakdown currently. Bear this pattern in mind

Emini 60mins:
This looks like a corrective pattern to me off the May highs and not the beginning of a serious impulsive breakdown. 1315 appears to be a key pivot and looking for a strong recovery off here to confirm.

Bull Trap?

Morning All,

The barrage of weekend headlines certainly appears to have dented this bottoming process and puts a number of scenarios in jeopardy. I expressed this concern in my "Hmmmm" post yesterday morning. As I scan across various markets, some appear to be holding on by a thread whilst others clearly offer great short setups. I am always dubious of making any strong conclusions on a Monday as these trading days are always exaggerated by weekend news flow and the like. We will see  today if this is a genuine breakdown or a stepping process lower.

I thought I would keep this update simple by showing the good, the bad and the ugly.

The Good (well not that good)

S&P 500 Daily:
This market has traded right into the Daily trendline and low end of support. I am sure there are many out there who will be looking at this as a buying opportunity. If we see a bullish closing candle out of here, it would setup a "retracement" trade for many dip buyers.

S&P 500 60mins:
The market never managed to break above the downward trendline I talked about. My initial call at 1325/1320 was a good one but there was no follow through above that trendline. Yesterdays breadth was bearish with a 90% down day registered, but note volume was very low and there was no real intraday movement other than during the open. This could still be a corrective move lower with an ABC down complete, followed by an X up with the final waves unfolding here. That is hugely speculative but I have also seen the usual suspects now calling this a series of 1s and 2s down- my favourite fadeable Elliott count setup.

Eurostoxx 60mins:
The current market concerns are all about Europe and the EUR. However, the Eurostoxx doesn't appear to be breaking down impulsively. In fact, this could be seen as a wedge type pattern. Still early days no doubt but if the market can regain 2800 and the open gap with strength, I think this is a good long setup.

The Bad

ASX200 Cash 60mins
No follow through from the ending wedge pattern on the 60mins setting up a bull trap. However, are we looking at the final 5th wave down? I do not know but the market tried to bounce out of 4650 and failed spectacularly. Day trading this market has been great, swing trading a nightmare.

AUDUSD 60mins:
Holding...just. The final stages of an "e" leg or about to breakdown? I don't have much conviction unless that downward sloping trendline breaks to the upside.

The Ugly:

Shanghai Composite Daily:
That is a strong down day breaking through good support and the recent base building. I have showed this chart countless times and this was my do or die area- well looks like it died. I would only consider this on the long side if yesterdays highs get taken out. I talked about consolidation patterns a week back- this consolidation pattern has ended

MSCI Singapore Daily:
Attempted breakout and failure. Strong down candle yesterday, looking for lower prices

EURUSD Daily:
Breaks of 1.40 open up lower prices to 1.35 possibly. This is my biggest concern for the market

In sum, there are dislocations everywhere and unless the market can stage a herculean rebound today, I think we may be set for a tough time. At first glance, it seems that the market has been caught long trying to pick a low. Any more weakness will open up some genuine selling. Stick to the clearest setups and the plan- don't let the emotions get to you in these volatile markets especially in no man's land.

Thanks
Austin

Hmmmmm

Morning All,

For those of you who enjoy their reading, John Mauldin's latest on the unfolding EUR crisis is a must: http://www.johnmauldin.com/images/uploads/pdf/mwo052011.pdf. I hope to do a summary of this piece today and offer my own thoughts. Some of this is grim reading indeed and the contrarian in me wants to view this as a timely reminder that a low may be forming. However, no doubt there are many very real and valid points in this argument that will come home to roost. At some point, the markets will say enough is enough. We just don't know when that point is.

One of the main reasons I have always used charts as my primary trading tool, is that they offer a complete summary of price action and what the market is actually doing. The breakup of Europe (or the ejection of certain member states) may be a very solid fundamental argument indeed but you can't time the markets using this. You have to wait for the market to confirm your scenario. I have been calling for a potential bullish turning point based on some strong areas of support holding and some initial price confirmation, but we are now very close to this being invalidated. The next 2 days will be key. It is one of those horrible binary moments as a analyst and trader where all I can say is if it holds we are going higher, if it breaks get short.

EUR Daily:
I showed the pitchfork in my FX summary last week. The low end of this channel must hold otherwise we could be looking at a steep decline indeed. Note that we have seen a bearish break of a small flag pattern on the Daily. This action looks eerily similar to November 2010 where the EUR fell from 1.43 to 1.30 in a sharp ABC move down where A=C on the low. If the market breaks here, we are looking at a possible move down to 1.35 based on the same pattern and relationships.

EUR 60mins:
No real follow through from my ending bullish pattern. A clear range has been established now from 1.40/1.405 to 1.43. Trade the range and if the low end breaks, get short targeting 1.35.

AUDUSD 60mins:
The triangle pattern that I postulated is still playing out. Need to see the 1.055 level hold and a break of the downward trendline.

SPI 15mins:
The SPI is set to open at around 4700, a 40pt drop from Friday's close. There is a big area of support from 4690 to 4705 based on an open gap, fib relationships, and the psych 4700 level. I am buying support first, shorting below. Keep it simple.

XJO Cash 60mins:
Breakout of the Ending wedge pattern is still in play. However, the market must hold in the next 2 sessions to keep this valid.

Copper June Daily:
Copper has always been a strong benchmark for risk appetite. We have an A=C retracement pattern in play and a failed breakdown through 4.0. A solid close back above 4.10 would be a strong long signal. However, I am certainly weary of a potential bearish flag here thus we need to see follow through promptly.

In sum, in bull markets you keep buying supports until they drop. Have we reached a point now where the market is telling us enough is enough? It is still early but the market needs to quickly recover and hold support for me to keep my conviction. I am sure the market is focusing on the EUR very intently indeed, so keep those levels on your radar.

Good Luck

Turning Point Confirmation

Morning All,


Asia had a strong session yesterday that was followed by a strong trading day in the US overnight. Yesterday, I saw a number of bullish patterns lining up and posted about a bullish turning point in Equity markets: http://swingtradersedge.blogspot.com/2011/05/turning-point.html. Last night's follow through triggered many of these patterns and I am looking for more gains in days to come. Advancing issued closed 3.5:1 vs declining issues which I believe confirms this tradeable low. If this is the genuine deal, Asia should go from strength to strength as we close out the week.


S&P 500 60mins:
Price traded back above the 1330 breakdown level confirming the A=C down pattern. Look for breaks of this downward trendline to add, targeting back up to the Daily highs at 1370 and beyond.

S&P 500 June Eminis 60mins:
This 3 Lower Peak pattern worked a treat last night. 3 lower lows in price with 3 higher highs in the momentum indicator are strong indications of a change in trend.

Nasdaq 100:
The upward trendline held and the bearish break of the flag looks set to be a bear trap. Since the liquidity driven bull run began in 09, bearish flag patterns and the like have FAILED to play out. In fact, the trade has been to fade these classic patterns once a confirmation signal has been given. If price recovers from the previous break, get long. There was a v.interesting post the other day by Peter Brandt who highlighted a number of bearish flags: http://peterlbrandt.com/flags-flying-at-half-mast-–-a-sign-of-death/. I stated in the comment field that such flags have actually been very poor performing patterns and great setups to actually do the opposite of anticipated.

EUR 60mins:
The EUR has also broken out of the downward sloping trendline confirming a possible transition from downtrend into a new base/uptrend. Look for breaks of 1.43 for more strength up to 1.445/1.45

Asian Equities are primed for a strong thrust higher here. If this doesn't work, then I fear this market really is tired.

SPI June 60mins:
This is the ending wedge pattern I have been showing for a while. We are set to breakout today

SPI June 15mins:
This morning we are indicated at 4725. As you can see, short term res comes in right here at 4725/4730. Look for breakouts of this zone for a move up to 4760 and then 4785+. I think we will be well bid on any dips down to 4715/4710.

BHP Daily:
I showed this upward sloping trendline off the 08 lows a few days ago. The stock tried to breakdown but has recovered very strongly and formed an Island Reversal candle pattern. Once again note that the intal close below the trendline may have trapped many bears and people calling for a crash etc. Failed signals are often the best trading patterns. This is a GREAT risk/reward trade to get long above 45.

Finally, China is putting in a solid low here with follow through. This has been my area for a long while and finally price is beginning to confirm the setup.

Shanghai Composite Daily:

In sum, I believe that we are on the cusp of good tradeable bounce here in many markets. I am not sure yet how high this can go and for how long. This should not be our concern as we trade first, ask questions later. Certainly, there are some indices that are looking toppy and there are concerns out there as ever. However, the doom and gloomers have been at it again but this market is still clearly in an uptrend and we are now breaking out of consolidation patterns. When an edge appears and setups align, you have to be willing to pull the trigger and go for it.
Thanks
Austin

Turning Point

Morning All,

Unfortunately this will be a very brief post but will update later in they day.

On Monday I talked about a great target box and buy zone for the S&P 500: http://swingtradersedge.blogspot.com/2011/05/consolidation-or-top.html

I said, "I think we will see more weakness before a meaningful low ensues. An ideal bullish scenario would be a break of 1330 down to 1325 that fails to follow through. Any strong hammers or strength back above 1335 would be a good initial signal to get long, adding above the downward trendline in place. Note there is an open gap at 1320 and a potential A=C projection at 1319/1320". 
Last night there was certainly more weakness that went all the way down to the low end of the target at 1319. The strong reversal off the low I believe is indicative of the beginnings of a bottoming process. This is a GREAT risk/reward area to be getting long. No doubt there are dislocations everywhere but it is important to focus on the setup. 




S&P 500 60mins:
A=C and the open gap was hit last night. Strong recovery off the lows. Look for breaks back above 1330 to get long adding above the downward trendline. These 3 wave type moves down into support are one of my favourite reversal plays. Stops below last nights low. 

S&P 500 Eminis June 60mins:
3 lower peaks with 3 higher highs on the momentum indicator. This is a potential ending diagonal in the making and look for a bullish breakout

ASX200/SPI 60mins:
Yesterday the SPI shrugged off the overnight weakness and held the previous days lows at 4650. I believe we will see more strength today. There are bullish divergences forming and price is holding in at the area of the 61.8 retrace. The bigger picture is a potential ending wedge on the 60mins and thus look for a breakout of this pattern. Short term resistance levels are 4690 and then 4720/4725. 

Shanghai Composite Daily:
This market attempted to breakdown yesterday but staged a positive recovery also. We are building a short term range right at the low end of this triangle pattern. Need follow through NOW to confirm a low. 

Good Luck

FX Update

There has been a lot of volatility in the FX markets over the last couple of weeks and I expressed this in my post about trading bias: http://swingtradersedge.blogspot.com/2011/05/bias-in-trading.html. I am seeing a number of interesting developments currently and thus I thought this would be an opportune time to post.

Firstly, the USD index certainly seems to have put in a meaningful low on the Daily chart. The recent move has been strong and impulsive, with a sequence of very strong wide-ranging candles implying a shift in trend. The initial trade is done however. No doubt there is a huge short base out on this index and this really is the driver currently as positions are being unwound. Similar to March 09 in Equities, this is going to go as high as the short base determines. I don't know when that is.  I do have short term levels and potential targets coming in here but the key is understanding the shift in momentum in the bigger picture.

DXY Daily Continuous:
The break of the December 09 low proved to be a strong bear trap. Price has regained the 74/74.5 breakdown level with real strength. This is a strong, big-picture Double bottom pattern

DXY Daily Continuous:
Zooming in, the strong thrust off the low looks a lot clearer. Note the bullish divergences that formed prior to the low and the subsequent price confirmation. Price has formed a clear V bottom and broken out of a downward trendchannel. We have hit a target at the 38.2 but it remains to be seen if this is meaningful.

DXY 60mins:
This is the first bit of evidence I look at to suggest that the rally may be cooling somewhat. Price has made 3 higher peaks with my momentum indicator making 3 lower highs. This is a major warning sign and an ending pattern I see time and time again across markets. See USDCHF on the 5th May on the 60mins as an example of a 3 peak ending pattern.

EURUSD 60mins:
This is the similar pattern for EURUSD. It is still early days and we need to see confirmation from price given the downtrend. However, price is looking good for a reversal here especially at the major psychological 1.40 level. In the bigger picture, I would be looking for a good bounce back up into the 1.44/1.45 level to short but that is someway off yet. For now, focus on this potential breakout trade.

EURUSD Daily:
Price is also coming into potential channel support on the Daily. The mid line served to be a very accurate area for the recent high and now we are entering the low end of this channel.

I am seeing some signs of life from AUD which add weight to a slowing of this USD move. AUD has held the 1.055 level on several attempts and I believe this is a tradeable bullish area for nimble traders. Note the strong bullish divergences in place. A bigger picture triangle pattern may be forming so being nimble around here is key until 1.075/1.08 lifts.

AUDUSD 60mins:

AUDUSD Daily:
Price topped recently on peak momentum. In my experience and in my extensive studies, markets very rarely top on peak momentum readings. There is often a subsequent "test" or a failed breakout leading to bearish market divergences. This has not happened yet. Price has retraced to the 38.2 retracement level and hit the rising 55 ema. I think this is a good area for swing longs. I don't think this is cooked yet in the bigger picture.

GBPUSD Daily:
In quite opposite fashion to AUD, GBPUSD appears to be very weak indeed. After months of building a range under 1.63, price initially broke out only for higher prices to be violently rejected. Momentim has gone nowhere. This is a failed breakout and I will be looking for failed rallies and bear flags over the coming weeks to get short.

In sum, USD appears to have put in a major low but is potentially running out of steam in the short term. Some markets like EUR and GBP appear to have put in major tops whereas AUD could well have another assault at its highs and beyond. I think this is all in line with a major market topping process and dislocation as we approach the end of QE2 come June. These mixed signals across asset classes and the strength in the US 10YR imply real dislocation. Trading each market based on its own individual merits and setups is more important than ever now I believe.

The Top or Consolidation?

Going through my charts this weekend, I saw a number of consolidation patterns forming across a number of Equity markets. Certainly, the sell off in some assets such as EUR, Silver and Crude Oil does look impulsive indeed. Yet, Equities seem surprisingly resilient in the face of this. Dislocations like this are not a healthy thing no doubt and thus it could be argued that the equity market will be the last shoe to drop. I don't think we are at this point yet. The consolidation patterns I am looking at imply yet another surge higher and I believe this will coincide with even more dislocations and divergences similar to 2007. Either way, this will be quite a key week for markets as the low end of the range and supports will be tested. This need to hold.


S&P500 Daily: 
A simple Daily chart of the S&P500 shows 2 vanilla trendlines coming in right here. I have marked a target box here illustrating this potential zone of support from 1320 to 1330. The 55 exponential moving average is rising and also comes in right at this area. If we can see a bullish reversal out of here, I will be looking for a potential move up to the 1400s which may set up a "3 Indians" or 3 peaks topping pattern of some sort.

S&P500 60mins:
Short term, price is testing the low end of the recent range. I think we will see more weakness before a meaningful low ensues. An ideal bullish scenario would be a break of 1330 down to 1325 that fails to follow through. Any strong hammers or strength back above 1335 would be a good initial signal to get long, adding above the downward trendline in place. Note there is an open gap at 1320 and a potential A=C projection at 1319/1320.

Nasdaq 100 Daily:
The Nasdaq has been holding up remarkably well and I believe this is a strong bullish indication. We are building a short term consolidation pattern or flag at the top end of the range. Buy the breakout or short the breakdown. Simple as that and WAIT for your signal.

And to Asia. It appears to me that many markets are also tracing out consolidation patterns or triangles of some sort. Indeed, there has been no urgency yet in any of these markets to go higher or lower in fact. These patterns all imply more work to do before we can confirm that the uptrend is healthy once more.

BHP Trendline

BHP Daily 2009 to Present

Friday's lows right on the trendline. Zoom in to see how well this was respected. Kinda key?

Bias in Trading

I haven't posted in some while. To be honest, this is because I have been plain wrong of late with most of my bullish setups and scenarios swiftly wilting away. Some of my support areas have worked but the bounce thus far has been anemic. In perfect hindsight, this is one of those moments as a trader when you say to yourself "I should have caught that move" or "that was so easy, why did I miss that?" And this got my thinking of a great post that no doubt happens to us all- the bias we fight as traders. Not just bias in regards to the way we view the market whether bullish or bearish, but also hindsight bias with our desire to seek patterns and order in retrospect. No doubt this delves into Trading psychology which is not my speciality, but I believe it makes for interesting reflection.

First things first. I was looking to buy pullbacks into the trend in a number of markets- AUD, the ASX200, and the Emini S&P500 etc. I saw markets breaking to new highs on strong momentum, I saw markets shrugging off countless bearish news headlines which implied genuine strength, and I saw this price action coupled with good underlying breadth. Thus, when presented with 2-3 day pullback into the Daily trend, you bet I was looking for the retrace trade and pullback trades. I spelled this all out here: http://swingtradersedge.blogspot.com/2011/05/dont-fight-trend.html and http://swingtradersedge.blogspot.com/2011/05/asx200spi-bullish-pattern-developing.html

I focus here on AUD but similar events happened in the Eminis and the ASX200. AUD went from 1.10 to 1.08 and I looked for the bottom. I looked for hammers, flags etc to get into the trend. All I was thinking was bullish bullish bullish despite the 60min trend being firmly down. We bounced and failed. 1.07 was the next stop and still I looked for that bullish turn. This level lasted for a couple of hours before once more we cracked lower to a low of 1.055. All the while I was looking for that low and we had fallen almost 500 points! Thus my bullish bias had actually kept me from following the short term trend and making significant money on the downside. And by the time AUD hit 1.055, I had completely given up and suddenly thoughts of an AUD top entered my mind. No doubt that was the low and I was not prepared to make that long trade anymore. I didn't lose any money here other than perceived opportunity costs. I was not so fortunate in the Eminis where I stepped in only to be viciously stopped out.

There are a few things to gauge from this. The simple fact is that when markets become exceptionally volatile (which they certainly have over the last week), they make large moves. Large moves to traders appear like incredible opportunity and naturally, we get angry at ourselves when our results don't reflect this opportunity. We begin to regret our actions and express our frustration via "should have" and the like. As humans, we inherently try to make sense of the world. However, the key thing to understand is that markets are highly unpredictable and ambiguous. Really anything can happen and no edge or strategy or setup will work every time. Thus, missing a 500 point move down in AUD is not necessarily a bad thing if this is not in accordance with your trading plan. And I have realized it wasn't. There wasn't a clear topping pattern, there wasn't a process of distribution, the Daily had made a new momentum high and I don't fade these type of moves. In strong bullish trends, I look to buy the retrace. I have made the retrace trades countless times throughout this bull market and they have been highly profitable. It is not going to work all the time and thus I shouldn't be getting upset.

One of my favourite quotes by Brett Steenbarger so eloquently sums what I am trying to say here: "Given the limits of what we know and what is ultimately knowable, not all movement is opportunity. The  key to trading success is finding the patience to capitalise on those things you do know and the wisdom to except what is uncertain". 

In regards to market bias, no doubt this clouds ones ability to see other setups or price action that is the antithesis of what is expected. Indeed, whilst I was busy anticipating my AUD and Emini long setup, I completely missed a breakdown trade in EUR which was a very valid setup in my trading plan. I don't often put on pair trades and a short EUR position didn't fit with my bullish AUD outlook. I doubted whether the breakdown was genuine and thus I passed. The irony is that I was given the EUR signal before anything else! Now this is poor trading and this was the genuine mistake throughout this all. This was an opportunity and I failed to follow through. Not following the gameplan is the undoing of most traders I believe.

And once again this brings us back to Brett's point. If we can develop a plan through research or experience, then this is the genuine key to success. If we can accept that the market can do anything, if we accept that we are not going to catch every major move in every market, then there is nothing to fear. The best we can do as traders is devise a methodology based on exhaustive research and experience- and follow it!

In sum, I am sure there are many elements here that strike a chord with most traders out there. We have a natural tendency to kick and question ourselves after the move has happened. We think we can catch every move. However, really the question we should be asking ourselves is did that trade fit with the trading plan? Be honest. If it did, what plans and procedures can we take to condition this setup. How can we control our emotional biases when trading going forth? For me, instead of beating myself up I need to condition the EUR pattern once more. Writing this down helps. I also need to print the trade out and go over it again and again. I need to go over all my breakdown trades in the past. Most importantly, I need to associate following the plan as a good thing and the key to success.

EUR 60mins:

Support Areas

Looking across the screens I see weakness across a number of risk assets. I just wanted to throw out a number of great support areas for traders to bear in mind coming into Asian Trading. Support levels are one thing, but waiting for price to respect and reverse out of these levels is another. I always use confirmation when entering a position as it keeps one out of trouble and increases the chances of a profitable trade. No doubt I have been looking for a low in the ASX200 the last few days but my trigger timeframe for position trades, the 60mins, has not given me an entry signal so this has kept me out of trouble. If I could give any advice it would be this- Price should confirm the  direction indicated by the setup before taking a position. If your setup indicates a long position, you should require the market to move up in some specified manner before you should be comfortable taking a position. Whether it is the market taking out a previous high/low, a strong reversal candle, consecutive follow through candles etc etc, you must must have a predefined way to enter the market that confirms your setup. This is an expensive lesson I have learned through the years and I really hope you can use this to improve your own trading.

And so to the levels:

ASX200/SPI:
4700- Pshycological round number; market indicated here on open
4690- Open gap from the 24th March
4685- 61.8 retrace level

Thus there is a good confluence in the 4685/4700 region. An ideal long signal would be a break of 4700 on the open with a sharp spike into the 90s that is completely recovered and 4700 level regained. Look for hammers out of here to confirm.

Nikkei June Futures:
9800- previous breakout level on 60mins
9700- open gap and a confluence of moving averages on the Daily

S&P 500 Emini:
1338/1340- previous breakout level and the 38.2 retrace from the last swing low


Shanghai Composite:
2825/2850- Trendline off the lows; previous major swing lows; the 61.8 fib retrace off the last major low


AUDUSD:
1.07- Round number and previous consolidation area prior to the strong breakout

I will be looking to play a number of these levels today. In a number of markets, we have traded from high to low on 3 consecutive days- this now sets up the potential for a bullish reversal

Good luck
Austin

UPDATE: Shanghai Final Levels

Shanghai Composite Daily:
There are the final support levels for this market. This is key to the health of the region I believe

Asian Setups

Here are a few Daily charts of the various Asian markets I trade. Certainly this rally has been stalling somewhat over the past week which has taken me by surprise. Some markets such as Singapore and Taiwan are testing key support areas whilst other such as India have already broken down. It is going to be an interesting few days that will decided the overall fate of the region I believe.


MSCI Singapore Continuous Daily:
The rally out of the recent flag pattern failed to gather momentum. 3650 is the key support level and price needs to hold here to keep my bullish scenario intact. The reversal out of the recent high does look bearish but until supports break, I want to follow the strong base pattern and the trend by looking for buy setups.

MSCI Taiwan Continuous Daily:
Taiwan looks the strongest market in the region with a bullish inverse Head and Shoulder pattern in place. The low of the recent strong candle at 3100 should offer short term support. I am still looking for a retest of the Daily highs

Nifty Continuous Daily:
The Nifty has sold off strongly since hitting the downward sloping trendline. Price is now testing the previous breakout level. For short term traders, look to get long against this level with very tight stops and join the momentum lower should this area break. The recent range on the 60min chart has broken down and this is bearish for now.

Nifty Cont 60mins:

Shanghai Composite Daily:
Price is beginning to hold at my 2850/2900 support area. If price can trade above the highs of the recent strong down candle, I believe this is a bullish development. In the big picture, this market is still in a sideways consolidation pattern with not clear trend yet

In sum, it certainly does feel like some of these Asian markets are losing momentum. However, as long as the supports identified hold, I will continue to focus on the uptrends in place.
Thanks
Austin

ASX200/SPI Morning Thoughts

Morning All,

Yesterday in the Australian market there was no follow through from Monday's strong bullish reversal. As I stated yesterday, position traders should continue to look for long swings only ABOVE 4840. In the short term, the trend remains down and we are indicated at 4755 in early trade, below yesterdays lows. I do have a strong target area at 4745/4750 for this down move and this really must hold to keep my bullish scenario intact.

SPI 60mins:
4745/4750 is an open gap, an A=C target, the low end of a parallel trend channel, and the 50% retracement level. Thus, this should be a strong confluence of support. However, as ever, wait for price action to confirm and look for price to regain 4765+ as a trigger

SPI 15mins:
We are indicated below yesterdays lows. Look for bullish reversal candles out of 4745/4750 to get long or wait for price to regain 4770. The short term trend is down so use tight stops and be prepared to short and join the momentum if we cannot hold

I must also stress that yesterday was a rather choppy session for the SPI. Indeed, for the first time in several days, every time I hit the new intraday low price failed to follow through to the downside. This shows to me that these levels are being defended and momentum to the downside is slowing. We will soon see today if this is the case once more.

I will post some other Asian setups shortly
Thanks
Austin