Weekly Index Reports 22nd March
Australian and US Markets;- DOW and S&P
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US markets early support around the 5-day 50% levels, and along with early resistance around the Risk levels, before heading higher into the close.....
Full Weekly report Later....
Daily charts range bound between Weekly channels......
GBP/USD intraday and 43 pip chart
As per previous report, expectation of any re-test of the 3-day low break from Yesterday and 1.9777 was the area which would provide a double 43 pip up move before Risk increases.
It has completed the first 43 pip range and now the rest of the day has a random outcome until GMT trading hours begin in 2 hours time.....
For full analysis on GBP/USD read previous report.......
Since last post SPI has consolidated under 5202 and now looks to be pushing down towards 5164 (R44 lows 5160)
On the back of weakness from BHP as it pushes down towards March lows.
Note: 5164 has a random expectant support zone, which often plays a supporting role....
don't trade longs below 5164 on a break because of the 2-day reversal pattern playing out....Entry 5201 exit 5180 +21
No more trading today......
Market shuts early for Easter...
BHP up date....
My 2nd banking stock ANZ has been exitted today @ $ 23.26
Average price $ 22.25...
I will do a full analysis on banking stocks over Easter.
But I don't expect too much upside on banking stocks, however I will continue to BUY around lower dynamic levels this year and exit around 50% levels on short-term retracement patterns.
If I can take between 5-15% on trades per Quarter over the next 3 quarters then i'll be happy.
Valid support around the March 50% level and Weekly .618 failed on Wednesday pushing lower and breaking support with the downside target the Weekly channel lows @ 1.9677....
Everything was going a bit quick this morning because of the Expiry of March contracts this morning.
But it could remain choppy around 5202 for a while....
Expiry day and early price action is volatile, but swinging between certain levels in the market.
SPI moved down into the lows and has now rallied up 44 points into the 3-day high range @ 5227...
Now it's an each way bet.... bullish pattern will just continue higher back above the 3-day highs, and could continue higher all day....
Or a failure at the 3-day highs and 44 point top could push down into the lows again....
Short 5226 partial exit 5216 + 10 Stopped 5230 -4
SPI rallied on open and moved into an R22 rejection pattern under 5254, sending the market down into the 5-day 50% level @ 5202..
Any further weakness down towards 5164.
Personally I didn't get filled to short trade down.... bummer hitting a high @ 5253
And went long @ 5202 and stopped @ 5195 -7
Price looks to be pushing lower as part of the 1-2 day reversal pattern after the change of the 3-day cycle.
Yesterday closed above the 3-day highs @ 5227, this is often the first sign that the bottom for March has been confirmed.
However, often when the 3-day cycle changes the market can stall and reverse back down over the next 1 or 2 days before the UP move continues.
Thursday:- If the reversal plays out then 5254 is the upside Risk and expectation that price is pushing down into the 5-day 50% level @ 5202.
Further weakness would see price push down into 5164, which could easily happen.
A 3-day break also signals a bullish price pattern:- Trading above the 3-day high breakout and using 5254 as a Risk level. If price is trading above 5254 then the expectation is price is moving UP towards the 5-day highs (Weekly 50% 5335)
This also aligns with a lower open today and a lower spiral point.
Note: There is no guarantee that 5-day highs will be reached, but they are the only levels above 5254.
In Conclusion:- It's an each way bet today, but the line in the sand on today's direction is 5254.
Even though I have modelled a scenario with a weaker price pattern whilst it's trading below 5254, I won't be shorting the open because it's a lower Spiral point.
The only thing would interest me 'shorting' would be a 22-point rejection pattern under 5254.
Basically the Support zones were valid for a number days until they failed, and then price moves towards the next levels in the market, in this case down towards the Weekly channel lows @ 1.9677.
The daily price action on Wednesday trading below the 5-day 50% level didn't have the follow through and break above, instead pushing price back down
Breakout of the 3-day lows and expectation price is pushing down the next day, with Thursday's 5-day 50% level a resistance zone.
GBP failed to break the 5-day 50% level and has drifted back down into the 3-day lows, and Weekly .618
Both the Weekly .618 and monthly 50% levels are still major support zones.
GBP intra-day charts
Currently supported and consolidating above the 3-day lows.
Bearish pattern is a break below both the Weekly .618 and the 3-day lows on Wednesday.
GBp/USD Daily and intra-day charts
GBP pushing up from the Weekly 50% level and the target remains the 3-day highs....
Read previous report to see the level that needs a confirming move above the 5-day 50% level....
Once again 95-110 pips UP move and Risk increases
Both the DOW and E-mini have moved towards their 3-day highs, and are trading around the Weekly .618 highs.
In fact US markets aren't that far away from the March 50% levels, and it won't take much to push them above those highs, especially with the March contracts expiring this week.
Note: we can see the 3-week dynamic high channels as shown in both charts above....
DOW 12674 and E-mini 1375
Since the start of this year, US markets and along with the Australian market havn't been able to trade and close above those trailing Weekly levels.
So those upper levels will be important reference points, but they will shift higher with each proceeding Weekly timeframe.
SPI hovering around the higher Spiral top 5276 , and still looking for the down move into the 5-day 50% level.. simply using the spiral pattern as Risk play...
Entry 5273 partial exit 5267 + 7 trailing $ stop breakeven @ 5279
Note: today is the last day of March contract trading, so everyone should be trading June contracts as of tomorrow...
coming into the last 100 minutes of trading and volume should be picking up soon, but the direction is unknown.
Market pushed down close to 5227 (50% level), and now trading upwards into an R44 high.
I've been sitting in a short position in 5274 (partial exit 5269) and running a $ dollar breakeven stop @ 5278)....
It's either going to take out my stop and climb higher into the close, or hopefully continue down into an R44 low and the 5-day 50% levels into the close......At this stage it's an each way bet into the close, but today the market has opened above the 3-day cycle high 5222, and looks to be closing above the 3-day high, the first time in many weeks......
GBP is supported above the March 50% level and Weekly .618, and there was an expectation that Tuesday would have an UP bais, but the range would be a consolidating trading day.
My next view was that Wednesday was going to be defined by the Weekly 50% level, as long as Tuesday closed above it, I would favour Wednesday moving higher.
So far this is what has occurred.....
Within the 5-day pattern Wednesday is trading below the 5-day 50% level, so it's hard to have a forgone conclusion that Wednesday will move higher, certain things need to happen to verify the UP move, because when we look at the chart on the left the market looks choppy.
An UP move should be verifed with a break aobve 2.0166. and a target of the 3-day highs @ 2.0267, and then the 5-day highs @ 2.0424.
Looking at the ranges on the right (43 pips), traders can use the trend bias of yesterday's breakout @ 2.0045, with any upside target based on the 3 and 5-day highs.
Note: there is no high- probability trade on Wednesday because of where price is trading in relation to the 5-day 50% level.
Trading longs below 2.0045 on Wednesday is high risk...
Exit 5273.... +27 (10:15)
Breakout of January (Crash pattern) and move down into March lows.....
"And with our market hitting the March lows yesterday and bouncing, this probably looks like the we are close to hitting a bottom in this Quarterly timeframe, and hopefully markets begin a rise upwards in the new Quarter, helped with a rise of March contract Expiry this week."....Yesterday's morning report
Now looking for a rotation back towards the April 50% levels.....
Monday was about trading down into the March lows, and Tuesday was about trading up from lower spiral points, with the expectation that the bottom had been set by Monday's trading.
Today:- higher daily open and expectation that the market will come down and fade back into the 5-day 50% levels (44 points down)
We have seen constantly over the past few weeks, that any higher open and price trading above the 5-day 50% levels, the market will just continue lower.
There was only a brief trading period in late January that on both occassions when the market opened above the 5-day 50% level there was a rally into the 5-day highs. (both Friday's)
Today will be interesting because after the gap closure down, traders should have a fair idea about the direction of the market and whether the market will begin a move back towards the 5-day highs and Weekly 50% level.
My trend risk for today is 5205
Note: In the Banking 'stock report' I mentioned that my trading position on CBA will be exitted @ 42.40, I have moved that upwards to $43.90.
Other banking stocks exit zones on trading positions will remain as last report.
I was hoping there was going to be more weakness in CBA this week so I could enter a 3rd lot around $35.40, but I don't think that's going to happen.
Tuesday's price action is the first sign that the worse could be over, but it is now the follow through into the end of the trading week that I would like to see continue, with a breakout of the Weekly .618 and continuation towards the March 50% levels.
Expiry of March contracts this Thursday will provide a helping hand.....
GBP has continued higher and has moved into an extended high zone, which was my view of the range for Tuesday.
Rest of the Trading day has a random outcome, but a good sign to be rising up from the support zones on Tuesday:- Weekly .618 and Monthly 50% level
US markets range bound within the Weekly channels, and coming into March Contract expiry this Thursday.
Yesterday's price action in the overall mayhem of the Bear Sterns collapse was a sign that in the short-term the worse could be over.
There is no pattern that suggests the worse is over, that will be confirmed with the break of the 3-day highs and trading back above the Weekly 50% level, but the resulting UP day in a market that was saturated with bad news can't be ignored.
Risk level in US markets are shown above (red line), and Support is a critical level on Tuesday if it gets down that far today.
Currently US markets are pusing upwards, with the DOW moving up from the 5-day 50% level, if this continues higher before the market opens, then the Weekly 50% levels are viewed as higher resistance in early trading and I'd would like the market to come back down and test support.
If the markets are hovering around RISK when the markets open, then the view is that price is rising up into the Weekly 50% level.... before deciding on whether US markets continue to rise higher into Thursday.
Basically use the levels above for intra-day trading. There is no major set-up for today.
Bearish pattern is a break of support.
GBP Daily and intra-day charts
Since the previous report this morning GBP has rising off the Weekly and Monthly critical support zones (read previous report), and it's a good sign that price is now above 1.9999, and I hope it stays above it.
I would like the see Tuesday be able to close above the Weekly 50% level, and then hopefully continue higher on Wedneday.
Risk always increases around 110 pips off the lows.....
Price is pushing back down into the lows taking out my trailing stop + 5.
Afternoon market has got two options:- move down into a 2nd R 44 Spiral low @ 5063 around 14:36 and attract buyers into the close.
Or it's going to head down into the lows and the March 5056 once again...
SPI moved up into 5119 and rotated back down. 5119 was this morning's 'sell-zone', but I didn't short trade down, because i'm leaning towards the markets rising.
SPI reversed down into another R44 low....
Entry L 5077 Added 5086 (R11 reversal)
Partial exit 5099 + 13
Looking for an an R44 move upwards and hopefully a continuation into the 5-day 50% level.
Next exit 5106 (+ 29) and holding 1 lot into close of the 5-day 50% level....5160
Trailing stops @ 5082
GBP has come down into the March 50% level and has found support around the Weekly .618 range low.
The previous report I mentioned that price looked to be coming down on Tuesday into the Weekly .618 low and this low is a critical level on the March trend.
In an UP trend, you are going to get 3- day reversals, but those reversals should be supported at critical timeframe support levels, and both the Weekly .618 and March 50% level are those critical levels.
Monday's trading was about the 3-day lows, and started with a 110 pip rally before reversing down and breaking the 3-day lows.
As expected the 3-day lows became resistance and pushed down into the 5-day lows.
The only conclusion I can see is by the current price action, which is finding support.
I can't see a major reversal upwards on Tuesday, all I can see is a small range day with an UP bias, but any UP move should continue higher on Wednesday.
A break of the Weekly .618 low, and price looks to be pushing back down towards 1.9740.
SPI has risen up from the R44 lows and probably move into a sideways range, hopefully it will continue higher into the close or towards the 5-day 50% level, as per morning view of markets finding their lows.
Exit 5107 + 38
SPI very slow and choppy this morning, I was hoping that the SPI would hit 5119 to short-trade down into an R44 low (high 5115).
And now around the R44 low there isn't any buying support atm.
looks to be pushing down into the March lows again...
Long 5074 stopped 5067 -7
long 5069 partial exit 5078 +9
For the amount of negative news on Financial stocks coming out of the US, the FED move along with the market discounting the bad news with an UP day, says a lot.
And with our market hitting the March lows yesterday and bouncing, this probably looks like the we are close to hitting a bottom in this Quarterly timeframe, and hopefully markets begin a rise upwards in the new Quarter, helped with a rise in the week of March contract Expiry.
Today:- Higher open and higher Spiral point
Hard to go long with a Spiral point @ 5119.
I would like to see a down move on open, complete the R44 lows, and then rise upwards into the 5-day 50% levels.
But like most rallies on the Australian market lately, a double r44 range nomally stalls and drifts lower.
Maybe with March lows being reached this might change.
Note: Yesterday my view was for the Market to head down towards March lows. This was completed yesterday, therefore I'm leaning to UP moves this week because of the contract expiry and what transpired in the US on Monday.
But everything needs to be verfied i.e move back above the 3-day highs and Weekly 50% level.
With all the negative news out, I would have thought that the 5-day 50% level would have stopped Monday rising. It did for most of the trading day, but a late rally into the close does set-up for an interesting trading week.
This Week is expiry week of March Contracts, and there is a tendency to push the market higher into Expiry.....
GBP/USD Daily and intra-day charts
Over 6 hours since the last report and GBP has remained Range bound between the 3-day range lows.
At this stage with the breakout of the 3- day lows and re-test and failure (3-day breakout), it looks like it will push down on Tuesday into the Weekly .618 low.
Then it becomes critical on how valid the UP trend in March is going to be....(full report later)
GBP/USD Daily and intra-day charts
Earlier Report was looking for a rise upwards from the 3-day lows and looking for an exit zone. The rise upwards was 110 pips before reversing back down and taking out the 3-day lows.
When looking at the Daily charts there is a lot of support around this level, but we would need to see where GBP closes today.
At this stage it looks range bound for the rest of the day, trading below the 3-day low break on Monday.
DOW and E-mini Daily charts.
US Futures have moved down into the Weekly lows during the night session.
Keep in mind that this report is being written at midnight US time, and over 8 hours before the markets open on Monday. (day session)
Weekly lows are Risk levels for Monday, which can support the market early, but I think price will continue down on Monday, with the same pattern of heading down towards March lows.
In Sunday's trading US markets rallied, with the DOW futures rallying up from 11919:- Support.
Now on Monday we have a break of Sunday's support and the expectation that US market's are pushing lower into the Support levels on Monday.
In conclusion:- Early support Weekly channel lows, as shown in the Daily charts
Resistance 5-day 50% levels in both Markets, which matches the break down of Sunday's support.
And a push down into Support levels, as markets move down towards March lows in both the DOW and S&P.
This is the price action that I wanted to see occur, a test of the 3-day lows and buying support to come into the market. already there has been a +43 pip rise off the lows...
Trend bias:- 2.0145 (continuation)
A wild day on the markets, and it's a good sign to see major buying support coming in around the March lows.
Now it depends on how US markets will react on Monday.
Full US report later.....
GBP is trading around the Quarterly 50% level, and above all other higher timeframe 50% levels. At this stage GBP is expected to head higher this month, however I would like GBP to come down and re-test the Weekly 50% level to verify the trend....
GBP is trading around the 5-day 50% level, and in Sunday's trading price went down and tested last week's breakout. Therefore there could be a rise UP on Monday back into resistance around 2.0303.
I would still like to see GBP to come down test the Weekly 50% level and 3-day lows for the next UP move to begin the next day.
At this stage I see any UP day on Monday as a stalling day into resistance.