Trading The SPI - NON-Gann Techniques

[professor_frink]

Updated chart from post #972. 6000 has now been breached. Under normal circumstances, you would expect this to be a fairly important psychological level. Expecting another gap down from the SYCOM close on Monday morning followed by a run back at the 6000 level pretty soon after the open.

I'd be very careful if anyone wanted to get short the market for a swing trade at these levels. We look very oversold right now, and if we see a short squeeze soon, it will probably be pretty vicious. A 100 point intraday rally wouldn't surprise me in the slightest on Monday, especially if we see other Asian markets being bought up after the opening gap.

 

[>Apocalypto<]

Updated chart from post #972. 6000 has now been breached. Under normal circumstances, you would expect this to be a fairly important psychological level. Expecting another gap down from the SYCOM close on Monday morning followed by a run back at the 6000 level pretty soon after the open.

I'd be very careful if anyone wanted to get short the market for a swing trade at these levels. We look very oversold right now, and if we see a short squeeze soon, it will probably be pretty vicious. A 100 point intraday rally wouldn't surprise me in the slightest on Monday, especially if we see other Asian markets being bought up after the opening gap.

Morning Frink,

I tend to agree with u, A short squeeze is a logical move. General Indicators are very heavily oversold now due to the speed of this sell off.

This is not a dig, what makes you think we are oversold and cant not lose another 60-90 on Monday?

I am not short or long right now just waiting to see a clear move to take. unless its intraday I never trade against the trend, well not for now anyway.

cheers

 

[kerosam]

the Dow Jones is not doing too well either... I think Monday might be fall again on ours. China seems indifferent to the Dow Jones though. Anyone can confirm that? Or is it that ripple effect has yet to reach the chinese?

http://www.bloomberg.com/apps/news?pid=20601103&sid=aCylGnrk3oS8&refer=us

 

[professor_frink]

Morning Frink,

I tend to agree with u, A short squeeze is a logical move. General Indicators are very heavily oversold now due to the speed of this sell off.

This is not a dig, what makes you think we are oversold and cant not lose another 60-90 on Monday?

I am not short or long right now just waiting to see a clear move to take. unless its intraday I never trade against the trend, well not for now anyway.

cheers

I'm not referring to any specific indicator saying we are oversold- more of a general comment based on us losing nearly 450 points in a week.

If you go back and have a look at a chart of the XJO/XAO, you'll be struggling to find an instance of us falling like we did this week where it continues on for more than 3 or 4 days of closing on it's lows, before we at the very least pause before heading lower.

Having said that, there is absolutely no reason why it can't gap down and spend the entire day heading lower.

 

[professor_frink]

the Dow Jones is not doing too well either... I think Monday might be fall again on ours. China seems indifferent to the Dow Jones though. Anyone can confirm that? Or is it that ripple effect has yet to reach the chinese?

http://www.bloomberg.com/apps/news?pid=20601103&sid=aCylGnrk3oS8&refer=us

afternoon kerosam,

I don't really follow China too closely. I think it's pretty irrelevant in the grand scheme of things. Outside of everybody caring about what happened in Feb, nobody seems to care about the day to day movement of the mainland index. It may come back into the spotlight the next time the media need to explain a large selloff

 

[Trembling Hand]

afternoon kerosam,

It may come back into the spotlight the next time the media need to explain a large selloff

Exactly

 

[porkpie324]

It's interesting to note that during this bull run which started March 2003, during this period there has been 14 corrections I have completed some analysis as follows:-
Each advance averaged 11.13%
Each correction averaged 4.80%
Each correction as a % of last advance averaged 56%
We are in the 15th correction now, as of Fridays close the ASX200 down 350 points 5.44%, just above this bull runs correction average.
A 44.25% correction of the last advance, below the advance correction average.
The bull trend line is still in place, the ASX 200 index has to break below 5750 and fail to break the last advance high to enter a bear phase.porkpie

 

[>Apocalypto<]

It's interesting to note that during this bull run which started March 2003, during this period there has been 14 corrections I have completed some analysis as follows:-
Each advance averaged 11.13%
Each correction averaged 4.80%
Each correction as a % of last advance averaged 56%
We are in the 15th correction now, as of Fridays close the ASX200 down 350 points 5.44%, just above this bull runs correction average.
A 44.25% correction of the last advance, below the advance correction average.
The bull trend line is still in place, the ASX 200 index has to break below 5750 and fail to break the last advance high to enter a bear phase.porkpie

Great Post.

 

[Trembling Hand]

The bull trend line is still in place, the ASX 200 index has to break below 5750 and fail to break the last advance high to enter a bear phase.porkpie

Yes I agree but I just wonder what damage the break of the last 3 month consolidation has had on the way people will play from now on. All of those corrections have been at the end of an advance. Taking out the Johnny's come last, this one has hurt everyone that has got in since the start of April. That is a change isn't it?

 

[porkpie324]

A change possible yes until the bear phase happens we won't know. But also interesting to note that when the market corrected during May / June last year the same things were said, ie the bull mkts ended, the commodities bull run is finished, all the bear comments were said and what happened the correction happened and went then everyone forgot it.porkpie

 

[>Apocalypto<]

A change possible yes until the bear phase happens we won't know. But also interesting to note that when the market corrected during May / June last year the same things were said, ie the bull mkts ended, the commodities bull run is finished, all the bear comments were said and what happened the correction happened and went then everyone forgot it.porkpie

Porkpie I agree with u in regards to the sentiment, also feb this year was a cracker for the bears coming out.

Last may was a very big correction with a band that followed. the main difference in the two bands June-aug 06 was a support touch band this last band was a resistance touch band.

TH raises a good point this did not have a rally into the selling it floated in with not much push. the DOW on the other hand really drove up hard but ran out of push very quickly.

But I am with until you until it proves bearish Its got as much chance to go up as down.

 

[professor_frink]

didn't get the gap down from the SYCOM close- flat open followed by a run straight at 6000. The nikkei opened down and recovered 80 points before the SPI opened, so it wasn't too surprising that we blew through 6000 without even pausing.

6034 now. Already up 44 from the SYCOM close. Wouldn't be surprised if this got up to 70-80 this morning.

 

[Sean K]

didn't get the gap down from the SYCOM close- flat open followed by a run straight at 6000. The nikkei opened down and recovered 80 points before the SPI opened, so it wasn't too surprising that we blew through 6000 without even pausing.

6034 now. Already up 44 from the SYCOM close. Wouldn't be surprised if this got up to 70-80 this morning.

Is this the dead cat?

 

[professor_frink]

Is this the dead cat?

never know. It could have a few more lives left yet

ES is already moving up in response to Asian trade so far. Usually it's pretty well flat until the end of the Asian session/beginning of the European one.

After last week's action, a wicked short covering rally worldwide wouldn't be unusual.

 

[professor_frink]

It looks like it's breaking down already, and hasn't even reached yesterday's lows

 

[>Apocalypto<]

didn't get the gap down from the SYCOM close- flat open followed by a run straight at 6000. The nikkei opened down and recovered 80 points before the SPI opened, so it wasn't too surprising that we blew through 6000 without even pausing.

6034 now. Already up 44 from the SYCOM close. Wouldn't be surprised if this got up to 70-80 this morning.

Excellent call Frink,

Now big Q. is can we hang onto the lead by close.

 

[Trembling Hand]

The little Aussie market showing some spine. Will be cautious of a 2:00, 2:30 margin call sell off on the cash. Will be interested to watch the open interest on the SPI has been a good tell, last Thursday as we started to meltdown it rocketed up 21,000 contracts before any other market reacted. Biggest jump in more than a month the market was in hindsight obviously getting very short before the rest of the world wide meltdowns.

 

[professor_frink]

Gap now covered Nik and ES are slowly heading south. Can't see us going too much higher without other Asian markets doing the same. Might be time for the longs to bank some profits.

 

[porkpie324]

The ASX bottomed this morning at 5980 thats a 452 point drop 7.03%, or 57% of the last increase which is the average for this bull run, porkpie

 

[>Apocalypto<]

Hats off to you Frink looks like you have called it to just about the price as well.

well done!