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Danville

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U.S. stock indices closed sharply lower overnight on concerns over a potential default from Chinese property developer Evergrande on its $US300B pile of debt and nerves ahead of upcoming event risk.. The S&P500 closed at 4358 (-1.70%), the Dow Jones closed 614 points lower at 33970, and the Nasdaq closed at 15012 (-2.10%). At the start of September, our base case for the S&P500 was for a pullback towards trend channel support 4435/25, which worked out well. However, the break and acceleration below trend channel support add a new layer of complexity and volatility. Despite the lure of a 5% pullback, there are no firm signs the pullback is complete. As such the preference is to wait for signs of basing to emerge to indicate a low is in place and a recovery is underway. Or alternatively wait for the S&P500 to reclaim resistance at 4460/90.

 

 

 

The ASX200 closed 155 points lower yesterday at 7248 on broad-based weakness. Aside from the big iron ore miners, the most notable falls were in the Uranium and Lithium names that have attracted a lot of speculative flows in recent sessions, including Paladin (PDN) -16.5%, Pilbara (PLS), -9.61%, and Orocobre (ORE) -8.60%. Our base case for the ASX200 for the past four or so weeks has been for a pullback towards trend channel support at 7300, which worked out well. However, the acceleration below 7300 yesterday indicates a new layer of complexity and volatility. I prefer to wait for signs of basing to emerge to indicate a low is in place and a recovery is underway. Alternatively wait for the ASX200 to reclaim the uptrend at 7300. The ASX200 is expected to open 109 points lower this morning at 7137. Resistance on the day is expected at 7175, and support viewed at 7100.

 

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try 7100ish support for asx200, if market just have a pull back, 7100 should be hold !! imho though!!

 

 

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After a volatile session, the S&P500 and the Dow Jones closed lower as investors wait to see how the Chinese government will respond to the Evergrande fiasco and ahead of tomorrow morning's FOMC meeting. The Fed is expected to provide advanced notice that tapering is coming, paving the way to announce the start of tapering at its November meeting. At the start of September, our base case for the S&P500 was for a correction towards trend channel support 4435/25, which worked out well. The break below the trend channel support at 44235/35 is viewed as part of a deeper correction, and despite the lure of a 5% pullback, there is no firm evidence the pullback is complete. As such, the preference is to wait for signs of basing to emerge to indicate a low is in place and a recovery is underway. Alternatively wait for the S&P500 to reclaim resistance at 4435 and then 4460/90 to indicate the uptrend has resumed

 

 

The ASX200 closed 25 points higher yesterday at 7273, encouraged by the absence of sellers willing to panic/chase the market below horizontal support at 7200. Our base case for the ASX200 has been for a correction towards trend channel support at 7300, which worked out well. The break below 7300 is viewed as part of a deeper correction and the bullish reversal candle that formed yesterday indicates buyers stepped up to take advantage of lower prices. However, to confirm the correction is complete and the uptrend has resumed, the ASX200 needs to reclaim the broken uptrend currently at 7340 The ASX200 is expected to open 27 points lower this morning at 7246. Resistance on the day is expected at 7290, and support viewed at 7220.

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U.S stocks closed sharply higher after the Fed confirmed that tapering would begin soon (November), and it would end around mid-2022 as expected. Building on the recovery that started in the Asian time zone yesterday after a significant liquidity injection from the Peoples Bank of China eased fears over Chinese property developer Evergrande. The decline from the early September 4549.50 high is viewed as a corrective pullback. While the overnight rally goes some way to suggest the correction is complete at this week’s 4293.75 low, further evidence is required. Firstly in the shape of a move back above the breakdown level at 4425/35, followed by a close back within the trend channel 4465/85ish. Until then, a retest of the 4293.75 low cannot be ruled out

 

 

The ASX200 closed 23 points higher yesterday at 7296, as fears continued to ease over Chinese property developer Evergrande, allowing a bounce in the energy and materials sector. The decline from the mid-August 7632.8 high is viewed as a corrective pullback. While the rally over the past 48 hours goes some way to suggest the correction is complete at the 7191 low, further evidence is required. Specifically a daily close back within the broken uptrend at 7350ish. Until then a retest of the 7191 low cannot be ruled out. The ASX200 is expected to open 17 points higher this morning at 7313. Resistance on the day is expected at 7355, and support viewed at 7285

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U.S stocks closed higher for a second day as investors embraced the latest FOMC meeting despite its hawkish overtones and as concerns over Chinese property developer Evergrande continued to ease. The S&P500 closed at 4449 (1.21%), the Nasdaq closed at 15317 (+0.92%), while the Dow Jones outperformed to close 507 points higher at 34765 (1.48%). The decline from the September 4549.50 high in the S&P500 is viewed as a corrective pullback. The overnight close above the breakdown level (4425/35), is a good indication the correction is complete at this week’s 4293.75 low. However, a close back above the uptrend at 4480/85ish is the final confirmation needed to confirm a return to trend. Until then, a retest of the 4293.75 low cannot be ruled out

 

 

The ASX200 closed 73 points higher yesterday at 7370, driven by gains in the IT, as Afterpay (APT) stormed 4% higher and the health sector. Former index heavyweight News Corp also in the news as it closed over 8% higher after shareholders voted to double the size of the share buyback. The ASX200’s 6% decline from the August 7632.8 high has been viewed as a corrective pullback, not a trend change. Yesterday’s daily close above the broken uptrend at 7350ish is a firm indication the correction is complete. A second consecutive daily close above 7350 would result in a positive bias, looking for a push towards 7800 into year-end. The ASX200 is expected to open 12 points higher this morning at 7382. Resistance on the day is expected at 7418, and support viewed at 7350.

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In the S&P500, the decline from the September 4549.50 high is viewed as a corrective pullback. Last Thursday's close above the breakdown level (4425/35) was an initial indication that the correction is complete at the 4293.75 low. However, a close back within the uptrend at 4480/85ish is needed to confirm a return to trend. Until then, a retest and break of the 4293.75 low cannot be ruled out as the third leg of a three-wave correction

 

 

 

 

The ASX200 closed 30 points lower on Friday at 7339. The real estate sector was the big loser as the IMF called for Australian regulators to cool booming Sydney and Melbourne housing prices. The ASX200’s 6% decline from the August 7632.8 high is viewed as a corrective pullback, not a trend change. Last Thursday's daily close back within the uptrend at 7340ish is an indication the correction is complete. A daily close above 7400 would be further confirmation that the correction is complete and that the ASX200 has the potential to rally towards 7800 into year-end. The ASX200 is expected to open 16 points lower this morning at 7323. Resistance on the day is expected at 7380, and support viewed at 7320.

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The SPX has yet to make a new high, and with no live bullish patterns in play (yet), the Bear Oscillator (BO) remains in an Elevated Risk range (at 4).

 

 

 

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The silver lining is that the long-term uptrends remain intact. The SPX never violated the long-term upward sloping channel, nor the 100-Day MA last week.

 

 

 

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Looking further out, the most trustworthy breakouts in 2021 have happened in conjunction with the 14-Day RSI breaking above a downtrend line

 

 

 

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The last two occurred as the market progressed from Q1 to Q2 and then again from Q2 to Q3… We’re four days away from the start of Q4…

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Rotation was the name of the game overnight as rising US yields helped cyclical indices such as the Russell 2000 and the Dow Jones outperform at the expense of tech stocks. The S&P500 closed at 4443 (-0.28%), the Nasdaq closed at 15205 (-0.81%). Making gains, the Dow Jones closed 71 points higher at 34869 (0.21%) while the Russell 2000 closed at 2281 (+1.46%). In the S&P500, the decline from the September 4549.50 high is viewed as a correction. A break and close back within the uptrend at 4480/85ish is needed to confirm the correction is complete. Until then, allow for a retest and break of the 4293.75 low as the third leg (Wave c) of a three-wave correction.

 

 

The ASX200 closed 41 points higher yesterday at 7384. The energy sector was the best performer on the day, a trend likely to continue today after another strong rally in crude oil prices overnight. The ASX200’s 6% decline from the August 7632.8 high is viewed as a correction, not a trend change. Last Thursday's daily close back within the uptrend at 7340ish is an indication the correction is complete. A daily close above 7400 would be further confirmation that the correction is complete and that the ASX200 has the potential to rally towards 7800 into year-end. The ASX200 is expected to open lower this morning at 7345. Resistance on the day is expected at 7380, and support viewed at 7320.

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U.S stock indices closed sharply lower overnight as U.S. yields played catch up to surging energy prices that have sparked fears over higher inflation. The yield on the 10-year U.S. Treasury has rallied from near 1.30% last Thursday to ~1.55% at the close today, a 25bp rise in just four sessions. The S&P500 closed at 4353 (-2.04%), the Nasdaq closed at 14770 (-2.86%), while the Dow Jones closed 569 points lower at 34,300. In the S&P500, the decline from the September 4549.50 high is viewed as a correction. The failure to reclaim the uptrend at 4480/85ish and subsequent rejection from the 4472 high indicates the S&P500 is tracing out the third leg (Wave c) of a three-wave correction. The wave equality target for Wave c is 4215ish, where we would expect to see signs of stabilising/basing emerge.

 

 

The ASX200 closed 108 points lower yesterday at 7275 as weakness in the Healthcare and IT sectors overshadowed strong gains in the energy sector. The ASX200’s decline from the August 7632.8 high is viewed as a correction, not a change of trend. However, yesterday's sharp selloff was not entirely part of the plan and leaves things a little uncertain in terms of how deep the correction will go. The ASX200 is expected to open lower this morning at 7166. Resistance on the day is expected at 7210, and support viewed at 7110

 

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use STOPS is really a "must" action to trade current market!!

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