Bullish Reversal?

Morning All,

Well yesterday the SPI futures exploded out of the blocks and blew away all resistance points cited here. All this within 5minutes and before the cash market had even opened!  Its not often you see that. Obviously there were many traders out there, like me, who were looking to to short the 4200 level and quickly got swept. As ever, keeping your risk and your stops tight is paramount.

Yesterdays rally certainly refutes much of what I said yesterday in the XJO. I talked about that 4250 level in XJO being a key marker and it seems we will pop through this today. Its been a choppy, volatile ride of late and following the intraday trend really has been the only thing that has paid.

So where does that leave us? I will just show you a few charts I am looking at rather than try and make any forecasts at this point. We have a Eurozone meeting going on and really any headlines can pop out of that (although no doubt they will ensure any headlines have a very positive spin to them).

XJO Daily:
The high of my bearish reversal candle is about to be taken out. We are still trading at the top end of the range however. Looks like that upward sloping trendline held in.

XJO Cash 60mins:
Looks like a clear failed breakdown through that support zone. Time to cut and reverse? The overlapping nature of the move lower implies that we could very well have an ABC move off the top and thus this is a new impulse or trend higher with the first target right back at the previous highs.

SPI March 15mins:
A very strong opening candle yesterday and it always pays to follow this momentum. We are now approaching a solid res zone at 4255/4260 which could act as a first stopping point. However, the trend has certainly flipped to up once more and it looks like a clear impulse off the recent low after yesterday. Thus, looking for buy setups/pullbacks into the trend is the play I believe.

As you can see, it all looks quite positive here but certainly we have no new highs in place and are nearing the top end of the range. Furthermore, the S&P500 Eminis are nearly right at their May highs and the Hang Seng had a major reversal yesterday right at my sell zone. Thus this could/should keep a lid on our market in the bigger picture. Not sure. Just have to follow what is at the moment.


Hang Seng Daily:
I showed this chart several times. Yesterday we saw a perfect reversal right out of the res zone. Finally nailed one of these bearish setups! This is the 61.8 Fibonacci retrace off the top and A=C projection off the low.

Hang Seng 15mins:

My SPI range today: 4220 to 4260. Outlier levels 4200 and 4280.

My SPI day trading plan: Given the US public holiday, we have no clear overnight lead. European markets merely played catch up with the dramatic opening yesterday. Im sure everyone will be transfixed on headlines coming out of Europe and that will be the catalyst either way.

The short term trend has certainly flipped back to up. Thus I will be looking for levels and buy setups to get into this trend. The first obvious area of support comes in at 4235/4240 and then down at 4218/4220. I will look for long trades in these zones. Any selling should be capped at the 4200 level given yesterdays momentum. A move below there would be very bearish indeed. On the upside, I will look to short fade that 4255/4260 res zone but only for a scalp trade. If we fail to sell there, look for consolidation patterns/breakout setups to join a push to the previous highs at 4280.

Thanks
Austin

Monday Plan

Morning All

The key focus for me as we start the week, is to focus on this new downtrend in Australia. I have been looking for a turn for a while with mixed success, but when the RBA kept those rates on hold, I just knew it was the catalyst to compliment my bearish technical backdrop. Please see this post: http://swingtradersedge.blogspot.com.au/2012/02/thank-you-rba.html. The SPI tried to retest that 4250/4255 breakdown level post the announcement a few times but failed. Time to switch guns.

The chart below neatly illustrates this change in market profile. We have transitioned from a clear uptrend, into a congestion pattern/topping pattern, and have now broken through support to start a new downtrend. This remains the case unless 4250 XJO (4220 SPI) is recaptured.

ASX200 Cash 60mins:

ASX200 Daily:
We made a lower high right at the resistance zone. This is bearish. We formed a congestion pattern that broke sharply on Thursday and gave bearish confirmation. Stops for longer term traders should now be placed above this candle.

When I look overseas, I see a number of markets that are "testing" the top end of their range or solid resistance areas. At a minimum I anticipate a pullback and this will not help the bulls in Australia. Note how underperformance which is a key tell about the underlying weakness in our market.

S&P500 Daily:
I have shown this chart a few times. We are clearly in a strong resistance area. Sure for now there have been many false dawns and no doubt it has been resilient. That's what the printing presses do. Patience is key. 1370/1375 looks like the next target if we are not there already. Either way, the upside is really limited vs the risk out there. This is a double top trade that you just have to be prepared for.

Hang Seng Daily:
I put this up on Friday and it worked a treat. The Hang Seng has rallied right into the 61.8 Fib retrace off the high, a potential A=C target, and an open gap. This should be a formidable short zone at 21500 to 21700.

DAX Daily:
Price remains capped right at the A=C target.

My SPI range today: 4150 to 4200. Outlier levels 4130 and 4220.

My SPI day trading range: Monday mornings are always difficult to call given the weekend news events etc. Currencies have opened up quite strongly vs Fridays close and the S&P500 was up small overnight. Thus I imagine we will open anywhere from 4180 to 4190 and right into the short fade zone. I will look to short early with stops above 4200. I will try and short again more aggressively at 4220 if this bounce is stronger than anticipated. On the downside, 4150 held firmly on Friday and this should be the first obvious area to cover shorts. The bigger target is 4120/4125 but I doubt we see this level for a few days. As per my notes above, my plan is to focus on this downtrend with the appropriate risk. We have seen new momentum lows and a clear break of a consolidation range. If this proves to be a bear trap, so be it.


SPI March 60mins:
Clear res zone from 4180 to 4190. Round numbers often also act as target points.

Thanks
Austin

Australia Continues to De-Couple

Morning All

I don't seem to be having much luck currently in the US markets. I thought a correction was likely underway and was looking for a retest of the mid to high 40s to short. We got that and more. I said here yesterday:

"Supports are stacked everywhere from 1330 to 1337 and thus I anticipate we will hold in short term......I am looking to short a retest of 1350."

The Emini S&P500 hit a low of 1334.25 and then surged as the cash market opened. The first big pullback into support in an uptrend always gets bought. I had bids in from 1333 and didn't get filled. I had offers in to get short in the high 40s and did get filled. My stops for this short is above 1360. Not really liking the look off it so far as certainly the rally appears stronger than anticipated. If you pull up the chart of APPLE, it seems the whole market is moving in tandem with that one stock! No new highs anywhere from what I can see and much of what I said yesterday is still valid I believe: http://swingtradersedge.blogspot.com.au/2012/02/correction-likely-underway.html

S&P500 Eminis 60mins:
I have this chart labelled on my screens and thus far, the market appears to be attracted to these zones. Yesterdays strong bounce probably opens up a push to that upper trendline in the low 60s.

What is working for me is my Australian analysis. I said in my morning SPI report:
"I feel we could be looking at a genuine break and trend lower into 4140 and then 4125. Thus I will look to short at around 4170/75 if those 80s drop"

Given Westpacs results, we sold off sharply through 4180 straight out of the blocks and trended lower for most of the day, making a low of 4130. This despite some bullish jobs numbers. All does not appear healthy to me despite US markets continuing to grind higher.

XJO Daily:
The top end of the range proved solid resistance as I called for. A sharp breakdown candle yesterday. Focus on this new downtrend as long as the highs of yesterdays candle are not taken out. That simple. That upward sloping trendline may mean something in the short term although I doubt it.

SPI March 60mins:
A new momentum low and break of the support zone. Thus, our highest probability trade is to short the first pullback looking for a retest of 4130 at a minimum.

My SPI initial range: 4160 to 4190. Outlier levels 4125/4130 and 4200.

My SPI day trading plan: We are indicated at 4180 given last nights rally in the US. This is right into yesterdays highs. Straight up I would be looking to short fade this level with stops above 4190. Any move above 4190 is likely to be capped at 4200 and thus I would look for short fades again up here. On the downside, 4160 should be the first target zone for any shorts and I would look to cover there. Breaks of 4160 open up a move back down to yesterdays lows of 4130 but i doubt we push that low today.

As a sidenote, the Hang Seng will open today right into a major sell zone. Keep this on your screens if you see a gap up and reversal. This sell zone is the open gap, an A=C target and the 61.8 Fibonacci retracement off the top. Should be a big one indeed.

HSI Daily i:

HSI Daily ii:
The 61.8 Fib in more detail

Correction Likely Underway

Morning All

I know what you are thinking- calling the top after 1 down night is foolish! Well hear me out.

First things first. The S&P500 made a new high and then swiftly reversed. The DAX and the DOW Industrial both failed to breach their highs which is a bearish divergence. EUR continues to trend lower and AUD once again failed to challenge it previous highs. Despite the S&P500 making new highs, NYSE advancers hit a high of 2000 (vs previous highs of 2600) before closing at 1220.

Yesterday I said that the higher low on strong volume in the S&P500 was indicative of more strength to come and a move above 1350 should be expected. We got that and then dramatically reversed. In fact, it was a classic pop and drop with a number of stop orders going off only to be met with no genuine buying. That is a failed breakout pattern. The lack of follow through and strong reversal is a key tell that the nature of this market is changing. Luckily I covered my short at breakeven (almost) during Asian hours before the big rip. I am now looking to get short once more in the mid to high 40s with a stop above last nights high.

Emini S&P500 15mins:
Failed breakout. Remember failed patterns are the best. Supports are stacked everywhere from 1330 to 1337 and thus I anticipate we will hold in short term. Trend followers should buy these supports with tight stops. I am looking to short a retest of 1350.

Sometimes you have to keep it simple. These Daily charts couldn't be more clear.

DOW Industrial Daily:
Right in the Double Top zone. A candle reversal pattern is building.

Want an example of these Double top Daily trades? Look no further than the S&P500 in 2010:

S&P500 Daily 2010:
This Double Top trade led to a 50pt pullback

Nasdaq 100 Daily:
I showed a great chart the other day with the Nasdaq 100 RSI at 85: http://swingtradersedge.blogspot.com.au/2012_02_10_archive.html. One of the most overbought readings I have ever seen. Last night we saw a huge bearish reversal candle right out of 2600. That reversal candle is indicative of major exhaustion!

There are also some clear wave counts to support an end to this impulse:

S&P500 Cash 30mins:
I showed this in the past and now it is complete. We have a clear 9 wave advance out of the last major swing low. I have kept this very simple noting all the major highs and low. Last nights squeaker high completes the sequence and impulse. Correction now underway.

If you want more specifics, this count couldn't be more ideal:

S&P500 Cash 30mins:
A complete 5 wave advance with peak momentum readings in the 3rd of 3rd zone which they should be. The higher low on Wednesday was the C leg of a 4th wave pattern and last nights failed breakout completes the 5th wave.

One more bit of evidence is the AUD which I have talked about a lot recently:

AUD March 60mins:
This sure looks like a topping pattern to me with clear boundaries. The first test of support always holds in uptrends. Any retest of that neckline will result in a strong breakdown to me. Risk markets arnt going to fall unless this one does. Once again, note a new S&P500 high with AUD still well off its recent highs.

Now I am not saying this is the TOP TOP of the market and we are set to crash. I am saying that I think a correction is underway. I have no idea the shape, form, magnitude of this. As a trader we can never predict the outcome of a trade. All we can do is manage the position after the trade has been made and monitor the markets behaviour. To emphasise once more, as a swing trader the main goal is to minimise risk. The low risk trade is either to buy supports in the 1330s with v.v.tight stops or to get short back into the mid to high 40s with stops above 1358. Given the Daily picture and the charts I have shown, a bigger pullback is the more likely scenario. Everyone will probably be expecting the S&P500 to hit that 1370 previous high but the market is never going to play out in the obvious way.


Despite seeing US markets on a tipping point, Australia appears to be right on the low end of its range. Very simply, if the SPI doesn't hold 4180/4190 early, then we are looking at a major breakdown to 4125 first target at a minimum.

SPI March 60mins:

My SPI Range: 4140 to 4220. Outlier levels 4125 and 4230. This range implies that the 4180/4185 zone does not hold. I have no idea if it will to be honest.

My SPI day trading plan: I will look to BUY supports straight up at 4180 to 4185. This is a major zone of support and thus we have to buy it first and only get short if it drops. This is a low risk trade. If we do not hold in immediately, I feel we could be looking at a genuine break and trend lower into 4140 and then 4125 (unlikely today). Thus I will look to short at around 4170/75 if those 80s drop. The first 30mins will be key in shaping the course of the day.

Thanks
Austin

What Was That!

Sometimes this game just isn't fair. I woke up at 6am this morning to check the Emini S&P500 and see them trading 1337. My short from the high 40s was sitting pretty. One final check before I leave home at 7am and it looked like the market was going to close on its lows. Its going to be a good start to the day. I get into the office some 30mins later and I see them 10handles higher! In 30mins! WOW

What can you do? It is what it is. Yes its a bull market and yes the trend is up and thus when you do try to pick turning points, this can happen. You can cry about rigged markets, the plunge protection team etc etc, but if you want to play this game then you are susceptible to whatever the market throws you.

My main goal as a trader is to minimise risk rather than maximise reward. I can never predict the outcome of a trade but picking low risk spots is the only way to get a free look. You can then manage the position based on the markets behaviour.

That move was on some serious volume in the futures. Ive seen these end of day squeezes before and they don't just happen for no reason. They often lead to some genuine follow through. Do you remember the S&P500 bottom on October 5th 2011? A similar thing occurred when the market traded from 1080 to 1120 in the final 30minutes. Have a look! The market never looked back.

Now I'm not saying this is the bottom of another massive leg higher however I expect we will now see more strength in the coming days. Time to probably bail out of shorts in the interim if 1350 breaks. And if you want a marker- then last nights low is it! If the market gives up those gains and trades back down through 1337, then you know this is a genuine top.

S&P500 Cash 15mins:
A higher low was formed. Are we looking at a potential ABC flat and a new impulse higher now into 1370? Ill be looking for breakout trades above 1350.

If there is one shining hope for the bears, it is in Currency land. I talked about some interesting divergences yesterday with currencies all failing to challenge their highs which was bearish. And then the Moodys downgrades hit! AUD retested the target zone and held in this morning. However, are we looking at a potential Head and Shoulders topping pattern? I hate these patterns as they never really work for me. However, support is support so if this level drops, take heed. The Daily is still bearish to me.

AUD March futures 60mins:

EUR continues to languish. Price is now in a clear short term downtrend and has re-entered the previous consolidation range. This is bearish and shows a clear failed breakout.

EUR March futures 60mins:

To Australia today. My target for this move was in the 4180 to 4190 zone. Please see: http://swingtradersedge.blogspot.com.au/2012_02_13_archive.html. We hit 4195 yesterday and reversed. Urgh. Are we now also building a higher low? Its been so whippy and choppy over the past few weeks that trying to make a prediction is futile. Following that intraday trend has been key.

My SPI range today: 4190 to 4230. Outlier levels 4180 and 4250.

My SPI day trading plan: We are indicated at 4210 after the late squueze in the eminis. In the bigger picture we are at the low end of the range and thus I will be looking to get long at selective buy spots such as 4195/4200 and then at 4180. On the upside, I will be looking to short fade 4220/25 and then more aggressively at 4250. The key over the last few days has been to follow that intraday trend once the morning range gives way. Keep this at the top of your mind today.

SPI March 60mins:
We missed my target zone yesterday. Will we get one more shot at it? The market never makes it easy.

Reversal Tuesday? Ha I Wish

Morning All,

Firstly its great to see so many comments on the blog and some good discussion is developing. Paul, Ollie, Senate, Ronald and everyone else- good work and pls keep it up. Senate just calm it down on the bull chat :)

Well yesterday I was looking for a potential low to form in Australia but the market has a lovely way of making it difficult to actually participate. We opened a lot higher than my ideal buy zone, sold off and then ripped in the afternoon from nowhere. This now leaves us bang slap in the middle of the range once more in Australia.

SPI March 15mins:
As you can see, price has now rallied right into the middle of the range. There is minor resistance coming in at the dashed line of 4255 and then major resistance at 4275/4280 at the previous highs. No doubt this is looking something of a triangle or consolidation pattern which implies higher highs in coming days. I'm not sure just yet so just trade the charts!

There were no new highs overnight in the US but certainly the market seemed to shrug off Fridays weakness. Volume was one of the lowest I have seen in a long while in the NYSE. Resistance in the S&P500 Eminis remains 1350/1352 and breakouts above this would likely trigger a move to 1365/1370. For now, focus on that 1350 resistance level. If this is a genuine topping process, that level will hold. I am still short for now, but will be willing to cut and reverse if I see some solid 60min green candles.

S&P500 March Eminis 60mins:
Fridays sell off did not even reach the first target zone which shows that bulls are still firmly in control. We still have solid resistance at 1350/1352 and breakouts would open up 1365/1370.

I did find the move in Currencies overnight very interesting. Note that EUR actually sold off all session despite US equities pushing higher, and AUD also failed to challenge its previous highs. This shows interestesting divergences. FX is the biggest market in the world and they aint stoopid like us Equity folk :)

EUR March futures 60mins:
There was a strong breakout above 1.32/1.3220 but price failed to push on. Now price is actually trading back into the previous zone which implies a fake breakout and bull trap. EUR sold off all night as soon as the Europeans came in. A vote of confidence?

AUD March futures 60mins:
Yesterday I stated that AUD had hit the first target zone and a bounce should be expected. Interestingly, AUD topped out at the 61.8 retrace last night and failed to challenge its previous highs. I showed an interesting topping pattern on the Daily and now we are seeing a clear failed rally on the lower time frames. Potential Head and Shoulders forming here??

To Australia today. We are indicated unch vs yesterdays close. Certainly yesterdays afternoon breakout appeared strong and the key pivot was 4230/4235 in the SPI futures. As stated above, price is now right in the middle of the range thus its difficult to make any strong forecasts here. The likely scenario is a retest of those highs given the overlapping and corrective look of this whole pattern.

SPI March 60mins:
Consolidation above previous resistance which is actually quite bullish. Only a move back below 4180 would decisively turn this trend down.

My SPI range today: 4230 to 4265. Outlier levels 4210 and 4275/80.

My SPI day trading plan today: As shown in the 15min chart, we have first Minor resistance coming in at 4255 first thing. I will look to short fade this straight up with stops at 4260. Breakouts above this open up a move 4275/4280 so be prepared to join the uptrend up to there which would then be an aggressive short. Any move down to yesterdays pivot of 4230/4235 should present a good buy spot and a great opportunity to join the short term uptrend. Note it is Tuesdays and these are often my strong trending days. There has been so much see-sawing around in this market that it has actually been quite difficult. Could we be looking at a fake move yesterday and a complete reversal of those gains?? Or is the day that we trend higher and make new highs? I am really not sure, just have to be flexible and follow the price action.

Austin

Monday Monday

Morning All

Lots of press over the weekend regarding the new Greek bailout package, the new wave of austerity measures and the current parliamentary vote to get it through. I'm not going to give you my take on it all as I don't want to sound like a cynic and it really isn't my area of expertise. One article that I did agree with and found itneresting was written by El-Erian and can be found here: http://www.businessspectator.com.au/bs.nsf/Article/Greek-deal-fate-debt-bonds-ownership-credit-ECB-au-pd20120210-RBVN2?OpenDocument&src=sph.

So the S&P500 gapped down on the open, made a low in the first hour, then rallied all day. O wait, no it didn't! Finally. The S&P500 sold off on the open, made its low in the first hour but then went sideways for the rest of the session. Have we witnessed a small change in the character of the market or can we just put this down to a bit of nervous Friday jitters with all these macro issues looming? Way to early to tell, but some of my short setups have been triggered and that's all there really is to it. Looking across the charts, it does appear like the anticipated correction is underway. Some markets may make a new squeaker high but the process is underway I believe. Here are some recent posts I have put up detailing these setups:
http://swingtradersedge.blogspot.com.au/2012/02/tfif.html
http://swingtradersedge.blogspot.com.au/2012_02_09_archive.html

Firstly to the DOW Industrial:

DOW Industrial Daily:

This was the setup I posted on Friday morning and the short trigger was given overnight. Simply, a new high was made above the double top zone, and a short order was placed below the low of the previous candle. A low risk short entry for this Double Top trade.

Emini S&P500 60mins:
My 3 Indians/Ending wedge pattern was triggered and price sold off to the first target zone. I do believe that this pullback will be deeper in price and time. Stops for shorts should be placed above 1355. We may see a retest of that 1350 level although I deem this the less likely scenario.

What I found interesting was the move in AUD on Friday night. Sure we can once again put this down to nervousness ahead of the weekend but the move was really quite impulsive to me. More importantly, all of the gains post the RBA interest rate announcement were completely given up. This is bearish price action. If markets are going to turn, this one should follow suit. Well the script is now playing out.

AUD Continous Futures Daily:
We now have a clear candle reversal pattern out of the top end of the range and overhead resistance. I have shown a similar example here of such candle reversal patterns which occurred right on the July 2011 high.

AUD March Futures 60mins:
There was also a clear 3 Indians/Ending Wedge pattern here that resulted in the sharp pullback. We have now fallen into the first target zone so no doubt price could hold in for the short term. However, the bigger picture target still comes in some way lower as shown.

So today a lot of attention will be given to this Greek parliamentary vote. I am under the impression that voting begins around 10am AEST time and I have no idea how long it will go on for. Its pretty much a given that they will get this through but as ever be prepared for the unexpected.

Australia has now sold off to my first major target zone. I see a confluence of support coming in at 4180 to 4195 so I would not be surprised if we hold early with even a potential strong rally later in the day. Obviously if we fail to hold, this is bearish indeed.

SPI March 60mins:
Here is my first target zone at 4180/1495. This comprises the 38.2 Fib retrace from the high to the recent swing low. You can also see that this is an area of previous support/spike lows etc. The deeper target for this move ultimately is down at 4120/4140.

SPI 15mins:
Just giving this area more attention. We have a 38.2 Fib retrace as per above; we also have open gaps; we have spike lows; and we have a potential A=C extension coming in at 4185. Bottom line, there is a confluence of support in this zone of 4180 to 4195.

My SPI range today: 4180 to 4225. Outlier levels 4140 and 4230/35.

My SPI day trading plan: We are indicated at 4199 early but really anything can happen on Monday mornings especially with these macro overhangs. I will be looking for any early panic down into the low 4180s for potential long trades with tight stops. The key will be waiting for somekind of bullish confirmation out of here before getting long. The short term trend is down and thus I will be looking to get short and join this trend if we see any bounce into 4220. I will be also shorting if I see a clear consolidation pattern around 4180/4190 that breaks to the downside with a target down to 4140 (although this is unlikely to get hit today)

Thanks
Austin

TFIF!

Morning All

Excuse the expletives in this mornings post. But Jeez it feels like its been a long week. Yesterday's trade in Australia was very volatile and I certainly experienced the full array of emotions yesterday. I think many traders thought that we were looking at a genuine breakdown, only for price to hold in and savagely reverse. When we failed to go lower, no doubt there was a whole host of short squeezing going on. That first big dip in an uptrend always gets bought. Urgh.

Anyway, the S&P500 sold off in the first hour or so, made a low, then rallied all day to erase all losses and close up. Sounds familiar right? I put that on the blog yesterday right? It is what it is. Yes its a bull market. Yes the trend is up. But you need to somehow characterise the market and "frame" it. As I said to one of my readers this morning, with the market in this position I have to either i) Wait for a climatic reversal pattern to short or ii) Wait for a consolidation pattern and buy a breakout. That's it it to me. Up here, you have to be nimble. That's my trading style. I'm not an investor. Read the label on the tin :)

So let me, again, show you some charts and information that continue to "frame" my perspective up here.

Firstly, lets have a look at breadth. We know that price has made successive highs over the last week or so. Now lets see what closing Advancing NYSE issues have done:
2nd Feb: 2473
3rd Feb: 2347
8th Feb: 1751
9th Feb: 1235

So price is making higher highs, and breadth is just not following through. Volume continues to decline. Bullish? Or is this telling you that the trend is actually weakening?

You might think that I sound like a broken record. Well my last S&P500 trade idea was actually a LONG at 1330 looking for mid 40s. That played out. Now I am looking at what is in front of me here.

Chart time.

DOW Industrials Daily:
Double Top zone. No doubt. Linda Bradford Raschke used to trade these setups as reversal patterns and called them "2Bs". Basically, wait for price to make a new high above the double top zone, then put a sell order below the low of the previous daily candle. That simple.

DOW Industrials Cash 15mins:
Not breaking out above the previous high but wedging= bearish. You can use the low end of this trendline as a short trigger when/if it breaks.

S&P500 Emini 60mins:
Looks pretty wedgie to me as well. We now have bearish momentum divergences and not new momentum highs.

NASDAQ 100 Daily
I put my hand up- I have been spectacularly wrong in the NDX view of late. I don't trade it but I use it for my analysis of markets and to help my trade ideas. This is a very very simple chart showing how overbought we are currently. The RSI hit 82 yesterday! WOW. I havent seen a reading like this since the Flash crash. I drew vertical lines here showing everytime the RSI has trade above 75. Correction at a minimum coming. Yes longer term peak RSI readings are actually indicative of a strong trend but that is much much longer term stuff.

Another thing I have found interesting of late is the DAX. I put this A=C pattern up on the Twitter feed the other day and so far it has coincided with the current high.

DAX Cash Daily:
A=C target. We are beginning to see some small reversal candles. Obviously more work to do but this coincides with the res levels shown above.

Use whatever confirm you want. I am putting on small short positions in the S&P500 eminis here and will add if i see confirm, stops above 1260.


Australia today. I will not dwell on this for too long. I thought the breakdown through 4235 yesterday would really open us up and put the nail in the coffin. Instead, we hit the first target at 4210, held, and then rallied very sharply all day. The way this moved off the low implies that we may actually see more highs to come! Indeed, the move off the recent high is just not an impulsive move but a series of "3"s implying some kind of triangle pattern/consolidation pattern.

XJO Cash 15mins:

My plan today in the SPI is very much based around this chart.
SPI 15mins:

My SPI day trading plan: I will be looking to short into 2 resistance zones namely 4260/4265 and then 4275/80. Yesterdays move off the low was very strong as I said thus I will be looking to get into this short term uptrend and buy at 4235/40. An outlier level comes in at 4220 and wait for bullish confirmation down there.

My SPI range today: 4235 to 4275. Outlier levels 4220 and 4280

Thursday Plan

Morning All

The S&P500 opened weak last night, found a low in the first hour of trading, then grinded higher for the rest of the day. Sounds familiar right? I haven't talked about the S&P500 Eminis for a few posts, but my recent trade idea played out well. To recap:
" We now have a new momentum high in place, and a retest of the previous high. I think this is a short term buy at around 1330, stops 1325, target 1340/1345."
http://swingtradersedge.blogspot.com.au/2012/02/s-update.html

This was the chart I put up and explains the trade idea and outcome:

S&P500 Eminis 60mins:
Price made a new high above 1330 post the jobs number, and momentum also made a new high. Momentum making a new high is the key here. Thus, our highest probability trade is to buy the first pullback. The pullback into the low 1330s provided this opportunity. Scaling out of longs into the 40s is/was the target.

So where to now? I really don't have much of a target for this move as there are multiple areas for this move. We could be close. We could trade as high as the previous highs at 1370. I just don't know and until we see a climatic reversal candle or pattern, I will sit and wait and be nimble.

S&P500 Daily:
Sure there is a resistance zone here. We are way overbought. This corresponds to a clear res zone in the DOW Industrial. However, the trend is very much UP and it will top when it wants to.

DOW Industrials Daily:

S&P500 Cash 15mins:
I thought this was interesting. This is the move off the most recent swing low. I have tried to make this very simple and show the number of waves within this move up. Clearly we are now in the 9th wave which would imply that this impulse move is ending. Sure we could have yet another extension :)

To Australia today. Yesterday my cited plan was great with a recommendation to sell the SPI in the 4255 to 4260 zone. We made a high of 4255 early and sold off. However, there really wasn't much follow through at all. In fact it was desperately quiet and volume was woeful. I myself trading horribly thinking that we would breakdown through the lows only to watch the market grind higher and higher throughout the course of the day.

My resistance zone today is 4260 to 4265. We really should sell off early from here if I am right with my recent bearish call

SPI 5mins res zone:

SPI 15mins:
I didn't realise the importance of this trendline yesterday. Note how many times price hit and respected this. If we see a strong bearish move below this, perhaps that is the signal that we are about to trend lower.

My SPI range today: 4235 to 4265. Outlier levels 4275/4280 and 4200.

My SPI Day Trading Plan: We are indicated at 4260 this morning given the SYCOMM sessions.  I believe there should be solid resistance at 4260/4265 therefore I will look to short here early with tight stops. Look to cover shorts into the low end of yesterdays range at 4235/4240 and wait for confirmation/breakdown patterns if this is a genuine move lower. If 4265 lifts to the upside, that opens up a retest of 4275 and 4280. Only if price can clear these levels will I look to join the trend higher and potential buy setups. Note that RIO was very strong yesterday and this seemed to buoy the SPI. Thus, keep RIO up on your screens today to see if there is more follow through. Perhaps this Glencore/Xstrata merger is keeping these miners well bid.

Thanks and Good Luck
Austin