I received a very flattering email last night from a reader and I thought I would re-publish here to start the post:
"I’ve been following your Blog mate and it is so impressive.The content and presentation are first class so well done and I hope your analysis is paying dividends.
Why am I writing? – I’m not really sure other than to say how impressed I am with the huge amount of work that clearly goes into it each and every day. I will certainly recommend it to those who deserve it!
Well done old boy."
Thank you. Receiving emails like that really makes writing this worthwhile. I started this blog first and foremost to help my trading by structuring my ideas and setups. I also wanted to reach out to others who trades these markets in Asia. No doubt trading can appear a rather insular world at times. By communicating with others and by relating experiences, I believe traders can gain enormous value not only to improve trading but to alleviate a lot of the loneliness associated with trading. We live in a social networking age thus we should be using this to our advantage.
And to the markets. This morning the SPI is indicated at 4735 which is almost at the open gap at 4740. Thus the Eminis and SPI have reached my first target levels. There are an array of targets from here all the way up to 4850 for this bounce. My plan is to focus on this uptrend as I really don't know how high or how quickly this move will materialise. Bear these levels in mind and look for possible reversal candles for short term scalps only. The bigger picture is bullish for now and let the experiences of the move off the Feb/March low be a guide.
ASX200 Daily:
These are the Bollinger bands I showed the other day which were a major source for my contrarian bullishness. As you can see, once a BUY signal is given (a close back into the bands), price has a habit of snapping right back to the other side of the upper band. This would coincide with roughly 4800+ currently
SPI Futures 60mins:
I believe the major target is 4800 which is the big round number and the former breakdown level. Note the 61.8 retracement level also comes in at 4850. All these are reasonable targets for this move.
SPI 15mins:
Today note there is resistance at 4740 i.e. the open gap, and former highs from 4770 to 4780.
My plan today: We are looking at a 20 point gap up from yesterdays close at 4711. Thus my Gap strategy is in play this am. I will wait for the first 15mins to trade and buy or short breakouts from this morning range. Certainly, we have risen quite rapidly over the past few days so price may need to consolidate or fill the gap before moving higher. However, let price action do the talking. I will also be looking for possible fade reversal trades at 4770/4775 and I will be looking to buy support at 4710 and 4700. Any ST consolidation patterns should be used to get into this trend.
Just as a reminder, the chart below shows how the rally manifested itself in March this year. No pattern ever plays out exactly but I show this to show the importance of following the TREND once it becomes clear we are in a new phase. We do have target levels but they are merely that. Never let your eyes off the underlying price action
SPI 60mins March 2011:
I have some other interesting charts across various Asian indicies. Got to hop now but will post later
Thanks
Austin
