Please Read the Weekly reports before continuing.
My Philosophy is simply about trading support and resistance. I Buy support and sell resistance. I trade down into support, and trade up into resistance. I fit the profile of a swing-trader and a momentum-trader. I simply chart read. I analyse from the top down. I determine trends and cycles using Monthly and Weekly charts and then day-trade the direction of the trends.
I’m extremely comfortable selling higher opens against the trend, and buying lower opens against the trend....
My trading:- position trading blue chip stocks. (not interested in Day-trading)
Bread and butter:- day-trading SPI Index futures for primary income....
US Index Futures and GBP/USD 1 or 2 good trades per week for directional plays using the Weekly timeframe as support/resistance. Being a Sydney based trader I don’t want to trade any other global markets unless there is a high probability pattern. This gives me 1 or 2 good set-ups per week in other markets, which often puts me into position before US markets open.
I look for higher probability patterns using levels in the market that often repel price. I work with price ranges that often have a huge influence during the trading day. (spiral-points)
Last Week….
If you modelled a downward weekly pattern why didn’t you short it?
I did short the market last week:- twice. Once on the higher open on Tuesday, and once on the lower open on Wednesday. On both occasions the market moved in my direction 22 points before reversing. There was no follow through.
In fact, every trade last week moved from support and into resistance before reversing, which often was around 22 points. Most of my trades last week didn’t have any follow through, after my first exit.
The over all trends based on higher timeframes were bullish :- above Monthly and Weekly 50% levels. And there were no 44-point spiral tops. Those who know my trading style I work with certain ranges to minimize risk, whether short-trading or going long.
There is a big difference trading trending markets as price moves from one level into the next, and consolidating markets. ‘Consolidating’ markets are completely different, and last week is a perfect example. I expect certain levels in the market will once again play important roles, but ‘follow-through’ is going to be like last week. And I expect the markets in Australia to be like this for the next 3-weeks.
I’m not one to guess how the markets will behave in the next few weeks (yes I am), but as long as I trade using support, resistance, and spiral points, then hopefully I can minimising any 'Risk' in markets reversing intra-day trends, as they follow Weekly trends.
Some days will follow through, and other days will be like last week.
Monday:-
With a lower Weekly open, there is always an expectation that price will swing back towards the central levels, and 3-day highs, before resuming the trend, and I think this will be the case with December contract expiry on Thursday.
Normally I would look for a major upswing on Monday because of the ‘gap’ open, but when we analyze the Ranges, there are no gaps. This suggests more downside on Monday, or at least a ‘small range’ day before any upswing occurs from Tuesday. The only gap is Monday @ 6463.
Every lower open in November and 2-day UP swing occured from the 5-day lows, in this case the 5-day lows are much further down. The 5-day breakout on Friday often pushes price towards the extreme of the forward timeframe before the reversal occurs, which is towards the lower 5-day range @ 6394.
Even though I've modelled an UP week, this might not occur on Monday.
Once again I'll trade support/resistance and use Spiral points on the way UP or on the Way down. Hopefully this time I get 1 day follow through.
For US traders who read this blog, the SPI futures can often provide high probability trades in your evening hours. However Monday isn't one of those days.
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