(UPDATE) 22/3/ 9am AEST: There was no reversal at all from this pattern and thus no trade. This is why I always try to wait for confirmation before trading. See chart below. Move on and focus on the next setup.
Twitter Feed
Monday, 21 March 2011
SPI 5mins- consolidation before a breakout?
Tried shorting SPI twice today and it is just not breaking down. Are we looking at a triangle consolidation pattern?
Asian Morning Thoughts
A quick run down of the setups I am following in Asia this morning. Note that Emini Futures are 6 points higher since Fridays close so it would seem that the recent military intervention is having little impact on the market in early trade. The Middle East had a positive session.
SPI Day June 5mins:
SPI Day June 5mins:
Sunday, 20 March 2011
How will the market react to Libya?
Happy Weekend All,
The title of this post is somewhat misleading. My experience in the market has taught me that ultimately the market is going to do whatever it wants to do. Trying to predict the future course of events is often futile. The best we can do as traders is have a setup, wait for price action to confirm the technical picture, and then execute always keeping the risk/reward in our favour. This sounds simplistic but it is some of the best trading advice I can give.
The market is at a juncture here I believe where it could breakout from a base building process and go on to retest its previous highs. I have been showing how breadth figures have not been supporting the move lower thus setting up a classic divergence. Price has hit some great supports and bounced quite positively across several markets. Equally however, if last weeks supports break, a whole new range of possibilities presents themselves and we have to be flexible enough trade the new setups.
I don't know how markets will take the weekend intervention in Libya. On the one hand it could be perceived as a positive by the market as this will possibly lead to an end of Qaddafi and close the door on recent uncertainty. However, heightened tension and bombs dropping from the sky is hardly the ideal backdrop for a sustained rally. The options are numerous here. Thus I just don't know how the market will take this information and I don't pretend to. Price action as ever will be key. We have some great supports in the S&P500, ASX200 and AUD as shown below. If this is a new leg up, these levels will hold. An ideal bullish scenario would be a gap down with no follow through.
The title of this post is somewhat misleading. My experience in the market has taught me that ultimately the market is going to do whatever it wants to do. Trying to predict the future course of events is often futile. The best we can do as traders is have a setup, wait for price action to confirm the technical picture, and then execute always keeping the risk/reward in our favour. This sounds simplistic but it is some of the best trading advice I can give.
The market is at a juncture here I believe where it could breakout from a base building process and go on to retest its previous highs. I have been showing how breadth figures have not been supporting the move lower thus setting up a classic divergence. Price has hit some great supports and bounced quite positively across several markets. Equally however, if last weeks supports break, a whole new range of possibilities presents themselves and we have to be flexible enough trade the new setups.
I don't know how markets will take the weekend intervention in Libya. On the one hand it could be perceived as a positive by the market as this will possibly lead to an end of Qaddafi and close the door on recent uncertainty. However, heightened tension and bombs dropping from the sky is hardly the ideal backdrop for a sustained rally. The options are numerous here. Thus I just don't know how the market will take this information and I don't pretend to. Price action as ever will be key. We have some great supports in the S&P500, ASX200 and AUD as shown below. If this is a new leg up, these levels will hold. An ideal bullish scenario would be a gap down with no follow through.
Friday, 18 March 2011
(UPDATE) AUDUSD- breakout trade
I am long AUD and I thought I would quickly post the reasons for the trade.
AUDUSD 15mins:
Price completely recovered after breaking the 98c level setting up a possible bear trap/double bottom. This mornings price action and intervention has confirmed the bear trap and a breakout from a clear Flag. Target up at 9950/1.000
AUDUSD 15mins:
Price completely recovered after breaking the 98c level setting up a possible bear trap/double bottom. This mornings price action and intervention has confirmed the bear trap and a breakout from a clear Flag. Target up at 9950/1.000
S&P500/NDX/DOW- bullish patterns developing
Morning All,
I put out a special post in the ASX200 yesterday and I urge you to read this. Yesterday was a great trading day across a number of markets and a number of double bottom setups I highlighted here were triggered and profitable. I believe we are now forming a strong base in US markets and we should be focusing on buy setups with tight risk.
I wanted to begin by talking about the recent breadth figures. I do believe looking at some breadth figures is a very important exercise and offers clues as to the underlying trend. I stated a few days ago that despite price making lower lows, the number of NYSE decliners was not following through showing important divergences. For instance:
I put out a special post in the ASX200 yesterday and I urge you to read this. Yesterday was a great trading day across a number of markets and a number of double bottom setups I highlighted here were triggered and profitable. I believe we are now forming a strong base in US markets and we should be focusing on buy setups with tight risk.
I wanted to begin by talking about the recent breadth figures. I do believe looking at some breadth figures is a very important exercise and offers clues as to the underlying trend. I stated a few days ago that despite price making lower lows, the number of NYSE decliners was not following through showing important divergences. For instance:
ASX200- Swing low is in
Today's action in the SPI futures and the ASX200 was very positive indeed, completely shrugging off the overnight weakness. I have seen this kind of action a few times in my career and I believe it is a lead indicator for the future direction of this market and indeed global risk markets. Note that the ASX200 bottomed prior to the S&P500 low in July and September 2010. I have been stressing that a climatic low has been forming and having seen the strong double bottom pattern today, I believe this low is in. I am looking for a new trend up and this will be confirmed on breaks of 4600.
ASX200 Daily has shown back to back long wicks at the 61.8 retrace level and Fibonacci fan. Today's close was a solid bullish hammer showing underlying demand. This does need follow through to confirm but no doubt this 4480 level has been strongly defended.
ASX200 Daily has shown back to back long wicks at the 61.8 retrace level and Fibonacci fan. Today's close was a solid bullish hammer showing underlying demand. This does need follow through to confirm but no doubt this 4480 level has been strongly defended.
Thursday, 17 March 2011
Double Bottom Trades- Follow Up
I posted this am about some potential Double Bottom trades lining up. I also highlighted looking for the same setup in the SPI. These have worked very well thus far with the SPI rallying almost 100 pts. AUD is late to the party but I still think this setup is also valid.
Learn these setups and how best to enter as they are great risk/reward trades that will have you taking money away from bears not using their head.
Learn these setups and how best to enter as they are great risk/reward trades that will have you taking money away from bears not using their head.
Double Bottom Trades
I cannot post in length this am. However, I do see a number of potential double bottom plays. On Tuesday we saw climatic lows form in a number of markets. Last night we saw a retest of these lows in Eminis/S&P500 , EUROSTOXX, AUD. This is a great area for a possible trend reversal now back up. Wait for a bit more strength and buy. Good risk/reward trades. Look for similar setups in the SPI at 4760/70. See charts below
New Twitter Function
Morning All
I just wanted to bring attention to the new Twitter function that has been installed at the top of the blog. I think this is a great tool as I can call out ideas, level and trades in real time as they develop. I put on 2 trades last night in AUD and FESX Futures (Eurostoxx) that were both documented and profitable. If you like my work and this commentary, I urge you to sign up and follow. A big reason why I decided to start this blog was to communicate with other Asian Traders and share ideas- please get involved.
Here is the AUD 5min trade I took last night. I noticed that AUD was struggling at 9950/9960 in European Trade with bearish divergences forming. The previous day AUD had made a new momentum low (60mins timeframe) thus our trade is to sell the first rally. It became clear that AUD was in a rising wedge and breaks of this pattern would lead to a retest of 98c. I got short on the break of the pattern at 9910 and I put this all on the twitter feed. I covered the position somewhat prematurely at 9830.
AUDUSD 5mins:
I use all timeframes in my trading and I believe this is important for profitability. The key is understanding the setup and how best to trade the pattern in front of you. Sometimes there will be opportunities for establishing longer term positions at key turning points- e.g. if AUD closes below this 98c level on the 60mins/Daily. However, these trades come along rarely and until they do, I like to trade 5min charts to pay rent and exploit the smaller moves.
As it stands, I think we may actually be in a great Double bottom area. The 98c support level dropped but there has been a sharp recovery. If we can regain 9860 I think this is a possible swing buy up to 9960 minimum. Note the bigger picture is bearish thus if this bounce fails and we see a 60min close below 98c, get short and join the momentum down for a bigger swing
AUDUSD 5mins:
I just wanted to bring attention to the new Twitter function that has been installed at the top of the blog. I think this is a great tool as I can call out ideas, level and trades in real time as they develop. I put on 2 trades last night in AUD and FESX Futures (Eurostoxx) that were both documented and profitable. If you like my work and this commentary, I urge you to sign up and follow. A big reason why I decided to start this blog was to communicate with other Asian Traders and share ideas- please get involved.
Here is the AUD 5min trade I took last night. I noticed that AUD was struggling at 9950/9960 in European Trade with bearish divergences forming. The previous day AUD had made a new momentum low (60mins timeframe) thus our trade is to sell the first rally. It became clear that AUD was in a rising wedge and breaks of this pattern would lead to a retest of 98c. I got short on the break of the pattern at 9910 and I put this all on the twitter feed. I covered the position somewhat prematurely at 9830.
AUDUSD 5mins:
I use all timeframes in my trading and I believe this is important for profitability. The key is understanding the setup and how best to trade the pattern in front of you. Sometimes there will be opportunities for establishing longer term positions at key turning points- e.g. if AUD closes below this 98c level on the 60mins/Daily. However, these trades come along rarely and until they do, I like to trade 5min charts to pay rent and exploit the smaller moves.
As it stands, I think we may actually be in a great Double bottom area. The 98c support level dropped but there has been a sharp recovery. If we can regain 9860 I think this is a possible swing buy up to 9960 minimum. Note the bigger picture is bearish thus if this bounce fails and we see a 60min close below 98c, get short and join the momentum down for a bigger swing
AUDUSD 5mins:
Wednesday, 16 March 2011
AUD Update
One of my major concerns currently is AUD and in particular AUDJPY. AUDJPY has been a benchmark for the carry trade over years and major turns in this pair have often coincided with major market tops. Currently, I think AUDJPY is breaking down through an ending wedge pattern and yesterday's close confirmed this pattern on the Daily. There is an interesting parallel scenario with the current setup and that in 2008. Please see the charts below.
Asian Morning Thoughts
Morning All,
Quick run down of the markets I follow this morning and my plan.
SPI
The SPI has bounced superbly off yesterdays lows at 4470 this morning but now is coming into some overhead resistance at 4550/4560. I am setting up a twitter account on this blog so I can quickly call out these trades as they materialise.
I think the easy money for today has been made and I think short term caution is warranted here for short term traders. Position traders once again need to see a strong close today to confirm a low. Note that today's low is just short of the 61.8 retracement on the Daily. I have been stressing that a climatic low is forming but we need confirmation first. Today looks like it could be that day.
Quick run down of the markets I follow this morning and my plan.
SPI
The SPI has bounced superbly off yesterdays lows at 4470 this morning but now is coming into some overhead resistance at 4550/4560. I am setting up a twitter account on this blog so I can quickly call out these trades as they materialise.
I think the easy money for today has been made and I think short term caution is warranted here for short term traders. Position traders once again need to see a strong close today to confirm a low. Note that today's low is just short of the 61.8 retracement on the Daily. I have been stressing that a climatic low is forming but we need confirmation first. Today looks like it could be that day.
US Market Summary
Morning All,
The S&P gapped down on the open, made its low in the first 5mins of trading, and grinded higher for the rest of the day closing just off its highs. I think we should be very careful to call any kind of low yet as we need to see more base building I believe but this was certainly good price action given the panic earlier in the day.
It is also important to highlight the breadth readings. Yesterday NYSE decliners closed at 2379 vs a high of 2833 registered in the morning- a very significant intraday reversal. This closing figure also shows important divergences with prior days in this current downtrend:
22/2/11: 2729 NYSE decliners
10/3/11: 2524 NYSE decliners
16/3/11: 2379 NYSE decliners
The S&P gapped down on the open, made its low in the first 5mins of trading, and grinded higher for the rest of the day closing just off its highs. I think we should be very careful to call any kind of low yet as we need to see more base building I believe but this was certainly good price action given the panic earlier in the day.
It is also important to highlight the breadth readings. Yesterday NYSE decliners closed at 2379 vs a high of 2833 registered in the morning- a very significant intraday reversal. This closing figure also shows important divergences with prior days in this current downtrend:
22/2/11: 2729 NYSE decliners
10/3/11: 2524 NYSE decliners
16/3/11: 2379 NYSE decliners
Tuesday, 15 March 2011
End of Day Summary
Evening All,
Today was a truly volatile day and ultimately it shows the importance of being prepared, trading the levels, and most importantly the need for good risk control. Certainly I was not expecting the ferocity of today's sell off but I did have a plan to join the momentum when the cited levels broke. This was all highlighted in my Asian morning thoughts. If I could give any advice in these kinds of situations it is to not panic, be very aware of your own personal sentiment, and step away until a good setup materialises.
I wanted to split this post into 2 main parts. Firstly, I wanted to discuss some of the setups today, how these were tradeable and improvements going forth. Secondly, I wanted to analyse the charts and see where today's action leaves us.
Today was a truly volatile day and ultimately it shows the importance of being prepared, trading the levels, and most importantly the need for good risk control. Certainly I was not expecting the ferocity of today's sell off but I did have a plan to join the momentum when the cited levels broke. This was all highlighted in my Asian morning thoughts. If I could give any advice in these kinds of situations it is to not panic, be very aware of your own personal sentiment, and step away until a good setup materialises.
I wanted to split this post into 2 main parts. Firstly, I wanted to discuss some of the setups today, how these were tradeable and improvements going forth. Secondly, I wanted to analyse the charts and see where today's action leaves us.
Asian Morning Thoughts
Last night I summarised the setups I am watching in Asia: http://swingtradersedge.blogspot.com/2011/03/end-of-day-summary.htm. Doing your homework after the close is a key part of successful trading I believe. I wanted to now update my plan going into today's session.
SPI is indicated at 4605. If we are to see a continuation of yesterdays move off the low, 4585/4590 needs to hold in the first hour of trading. If we see a bullish reversal off these levels, I will be looking to trade the long side and adding above 4620 targeting 4650. Note that the hourly trend is still down and we must respect this. Thus, if there is no bounce in this first hour, we may be looking at a retest of yesterdays low down to 4560/4550 before a more meaningful low can form. This is a trading environment currently and not one for new longer term positions I believe.
In Taiwan, the key levels remain 8500/8450. As I said yesterday, this market is in a clear range thus we must trade the ranges. Breaks of 8650 are bullish but we may not see that today. If yesterdays lows break we should join the momentum down.
MSCI Singapore key supports are 3555/3550. Get short on a break of this level and join the momentum targeting 3490/3500 and possibly lower. I maintain that this is only a long swing above 3650 and I doubt we will be reaching these levels today.
I will keep you posted through the day. Good luck
SPI is indicated at 4605. If we are to see a continuation of yesterdays move off the low, 4585/4590 needs to hold in the first hour of trading. If we see a bullish reversal off these levels, I will be looking to trade the long side and adding above 4620 targeting 4650. Note that the hourly trend is still down and we must respect this. Thus, if there is no bounce in this first hour, we may be looking at a retest of yesterdays low down to 4560/4550 before a more meaningful low can form. This is a trading environment currently and not one for new longer term positions I believe.
In Taiwan, the key levels remain 8500/8450. As I said yesterday, this market is in a clear range thus we must trade the ranges. Breaks of 8650 are bullish but we may not see that today. If yesterdays lows break we should join the momentum down.
MSCI Singapore key supports are 3555/3550. Get short on a break of this level and join the momentum targeting 3490/3500 and possibly lower. I maintain that this is only a long swing above 3650 and I doubt we will be reaching these levels today.
I will keep you posted through the day. Good luck
US Market Summary
Morning All,
My old mentor used to say to me that Tuesdays are reversal days. I feel that today could be a very interesting session indeed given the setups I am looking at globally.
My old mentor used to say to me that Tuesdays are reversal days. I feel that today could be a very interesting session indeed given the setups I am looking at globally.
Monday, 14 March 2011
End of Day Summary
Evening All,
Today was a very interesting day indeed. We certainly saw more weakness than I was anticipating on the open but ultimately there was no strong follow through. I stressed the importance of respecting the risk/reward for new shorts and I hope this message was heeded.
The SPI gapped down through Fridays lows and opened at 4612. Price failed to stage any real bounce and we soon saw a sharp thrust down to 4561 in the first 45minutes. This was just short of the 4550 level I cited on the Cash Index and right on the 50% retracement off the high. This proved to be the low for the day and we soon reversed with a relatively strong move higher for the rest of the day. Note the engulfing 5min reversal candle off the low that led to the rally. The Cash index closed with a bullish hammer candle right out of strong supports. Lots of great intraday trading opportunities but position traders should still be on the sidelines/covering shorts.
Today was a very interesting day indeed. We certainly saw more weakness than I was anticipating on the open but ultimately there was no strong follow through. I stressed the importance of respecting the risk/reward for new shorts and I hope this message was heeded.
The SPI gapped down through Fridays lows and opened at 4612. Price failed to stage any real bounce and we soon saw a sharp thrust down to 4561 in the first 45minutes. This was just short of the 4550 level I cited on the Cash Index and right on the 50% retracement off the high. This proved to be the low for the day and we soon reversed with a relatively strong move higher for the rest of the day. Note the engulfing 5min reversal candle off the low that led to the rally. The Cash index closed with a bullish hammer candle right out of strong supports. Lots of great intraday trading opportunities but position traders should still be on the sidelines/covering shorts.
Asian Morning Thoughts
Morning All,
Following on from the analysis presented last night, I wanted to highlight the setups and the technical picture here in Asia.
Following on from the analysis presented last night, I wanted to highlight the setups and the technical picture here in Asia.
Sunday, 13 March 2011
Weekend Observations - The Majors
Happy Weekend All,
This is my first post on this new site and it couldn't have come at a more interesting and opportune time in the marketplace. I really hope you enjoy some of the analysis presented here and I would really value any feedback going forth.
This is my first post on this new site and it couldn't have come at a more interesting and opportune time in the marketplace. I really hope you enjoy some of the analysis presented here and I would really value any feedback going forth.
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