Wednesday, September 26, 2012

Whats Your Plan Tonight?


My observations below should be viewed as general advice and may not be right for you.

So the market has now given back most of the euphoric gains post the announcement of QE3. On first take that would appear to be rather bearish and a classic "buy the rumour, sell the news" event. 

However, as I have continued to highlight in my reports, the S&P500 is in a strong uptrend having broken above the April 2012 highs. Thus as long as the market holds this key 1420 key marker, I believe traders could continue to focus on retracements into this uptrend. I have no idea if this is the "top". All I can say is markets take time to transition from strong uptrends into new downtrends. We will soon learn if the character of this market has genuinely changed if we cant hold in here. 

So coming into tonight, I see a key zone of support in the 1430 to 1435 area in the Emini S&P500. I think the ideal setup would be a bit more panic into this area come the open with a swift bullish reversal. 

The major warning sign to me is the Eurostoxx Daily chart which could be a potential ending wedge type setup. The key support area there is 2530 with 2500 a line in the sand (similar to my 1420 S&P500 level)

So here are the setups I am looking at tonight:

Eurostoxx Dec 60mins:
Price couldn't breakout above that downward trendline overnight. The pattern still appears to be a triangle type setup and price is now testing the low end of the range at 2530. Short term traders could look for buy setups into the low end of the range if we start seeing confirmation. 

Eurostoxx Cash Daily:
Potential ending wedge type pattern. However, 2500 remains key short term support. 

Emini S&P500 15mins:
A potential ABC type pattern into key support. Look for bullish hammers and confirmation out of this zone. 

S&P500 Daily:
Trendline support coming into tonight

And here are the FX setups on my radar: http://fpmarkets.blogspot.com.au/2012/09/fx-report.html

Thanks
Austin
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