SPI  O 6150 H 6197  L 6150 C 6172
Moving Averages 3/6179, 5/6915, 10 6211, 15/6206, 30/6101
Directional Movement 8 period +DI 18, -DI 20, ADX 22 Falling

A riveting start to the day with session high 6197 in first half of trading The 2 pt P&F from initial trading gave a base count to 6196 as is so often the case, especially after an uncertain opening.  It was quickly sold off – bearish red c/s gave the sell signal.  Support came in at 6174 with a fast rally to make a lower high 6194 with sellers again making an appearance. A well defined triangle on the Market Analyst 5 minute chart broke downside just after noon and a big trade for the shorts.  3 big red candlesticks with support coming in at 6150 the day’s low.  The sideways action for the rest of the session was a difficult one to trade but there were short bursts of activity for both long and short trades. Late sessions broke downtrend on 2 pt charts from a small base which has continued into Sycom trading registering a high of 6184 as at 8.30 pm.

ASX 200 INDEX  O 61632 H 61722 L 61342 C 61458
Moving Averages  3/6154, 5/6172 10/6186, 15/6177, 30/6164
Directional Movement 11 period +DI 23, -DI 18, ADX 27 Falling

Today was a typical day when the physical made a choppy pattern in very early trading giving the impression that the market could move up but resolved on the downside as the morning progressed with the sell off just after noon.  Support came in at 6134.2 for session low and thereafter formed a small base.  I strongly recommend traders keep a 2 pt. P&F chart on the index as well as a hand posted ½ Hourly chart.  There is much to gain from following the o’s and x’s. A possible target of 6162 is also a resistance point  - next  6170 – 6196 -6204.  Support 6140 – 6134.

The futures seem to know well in advance what the physical is going to do! Index is now below 4 moving averages with stocks and some sectors showing loss of upside momentum.  Directional Movement is worth following on daily charts especially.  When +DI is above – DI – take the long trades.  A falling ADX implies market correcting as it is at present.  I always exercise caution at equilibrium points.   The 30 period m/a is extremely important in the bull trend.  I am not a great fan of the stochastic indicator but when it is right down in an oversold area, there is need for caution.

Futures traders are continually confronted with the problem of opens and closes where Sycom mostly calls the tune.  Our market does not always respond to movements in the Dow Jones.  In recent days, traders have scored well selling the rallies and buying the dips.  I use Gann angles on the ½ Hourly Chart – there is a support angle off the big picture low at 6135 10.30 am. Wednesday and 6146 at 4 pm.

Markets have a horrible habit of springing up nasty surprises.  It is best to be aware of all the significant trendlines etc.  The ½ hourly chart is absolutely brilliant using Gann Squares 108 and 144.  The Market is now approaching the anniversary of last years top – the old adage of “sell in May and go away” is now appearing in finance pages.