SPI TRADING  24/08/07 06138 H6141 L6071 C6092
8 Period DM  + 29 -25 ADX 27 M/as 3/6098 5/6033 15/5947 30/6090

ASX 200 O61597 H 6159 L6074 C 6088
11 Period DM +26 -31 ADX 37 Falling, M/as 3/6085 5/6035 15/5961 30/6101

The pendulum swung the other way, with almost vertical rally from the extreme oversold readings of most indicators and important target areas achieved.  It was not a market to be caught short off the lows. The problem of Sycom remains calling the tune.  Friday night was a case in example under influence of Dow Sycom traded to 6194 H with close at 6190. The MARKET ANALYST 5 minute Chart displays a brilliant price run for the night owls – it is possible this could be resistance Monday.  Good signals come off the clusters in the moving averages. Shorting at Friday’s low was not a good idea.  The Index had an inside range day.

My preferred view on our market is that we are in a topping situation and that the individual chart patterns will point the way for possibly a significant correction which could eventually take out last weeks lows which met support at the mid-point of a Gann square.  Always it is in the timing of events so it will be important to closely monitor the breadth of the market.  The Coppock Indicator on industrial has turned up but there is no buy signal.  The index movements conceal the real trend.  The rally has been fired on by movements in some Bank stocks and BHP.

It was not possible to put a ½ hourly chart on A4 paper so I have scanned a daily Close chart on the ASX 200.  It filters out all the range noise.  A 20 pt. one box P&F Also brilliant from the lows with all x’s up to 6140 with 2 boxes down for Friday close. These two charts will serve you well.  Follow the retracements a la Gann and Fibonacci.

Range  Close Hi 6422 Lo 5711 = 711 points.
1/3= 5948 .382=5983 50%=6067  61.8=6150 2/3=6185 78.6=6270
Range  H 6422 Lo 5483 = 939 points
1/3 = 5795 .382=5842 50%=5953 61.8=6063 2/3= 6109 78.6=6221

45 Degree angle Monday – 6175 falling 10 points day
Rule of Thumb if 78.6% exceeded will go higher.

The market has made a V turn with no support - I would a correction fairly soon. The Dow was also up to a downtrend/45 degree line.  The Mining market has been severely mauled with stocks in downtrends with very few uptrends’ left. This is a period of base building before any recovery.  The uranium price has recently fallen to $90 and whilst this sector fundamentally still has prospects, there is little support for the speculative issues.  Confidence has evaporated from this market. Futures traders especially in the SPI need to develop a trading plan for money management during this extreme volatility.  There was little in last week’s action for the bears.  Exposure with overnight positions is still hazardous.  Directional Movement System has pulled back to an equilibrium point on daily charts. Very few indicators can function in this type of volatility so special attention to price charts.  The 5 minute on APCSPOT gives some good signals with candlesticks and 5 period moving average.  The right side of the part the most important one.