SPI  06369 H6374 L6323 C6361
DM +DI 23 –DI19 ADX 14 M/as 3/6345 5/6335 15/6338 30/6319

ASX 200 063623 H63623 L63185 C63511
DM +DI22 –DI20 ADX 16 M/as 3/6471 5/6309 15/6321 30/6305

The reversal day on 27/6, 6184 the key to last weeks uptrend which continued into Friday.  The retracements levels that were in last Monday’s comment provided the trend action almost to perfection: 1/3 28/6 6255, 50% 29/6 6294, 61.8% 6319 3/7, 78.6% 6356 5/7.  Interestingly the 6356 target was achieved during the late session but a typical bull trap was surging to a close at 6393.  MA chart was stunning for overbought position and a sell which was appropriate for Friday’s downward correction back to Fibonacci support area 6319.  Overall a sequence of higher lows and higher highs and a strong reversal up towards the resistance at 6400 area. Worth noting the a.m. surge breaking the resistance line off 20/6 high and Fibonacci resistance 6319.  MA chart on futures was brilliant for Thursday.  The physical high hit a Gann resistance angle from the 108 - it would break on rise through 6355 Monday.

The weeks action provided plenty of trading opportunities for day traders especially. The strategy would have been to sell the openings and buy the dips which for the most part respected the 45 degree angle and (A) below.  The range chart on the index shows 3 inside days since the significant 6184 low.  An expanding and contracting premium provided opportunities. The customary traps for traders continues in this something difficult market– SPI futures seems to know where the physical is going to make the late close following 4.00 pm. Very misleading for the next day.

The APCSPOT chart for Friday 6/7 shows the various trending signals which have been labeled and where the candlesticks both open blue body and close red body signaled the important turns.  The P.S. and ADX/PS crossover captured the initial morning sell off.  The ON BALANCE VOLUME can really assist for direction points and Friday was a good example.   OBV plunged in the first move down, reversal sharply for the rally up to the 30 m/a and then resuming the downtrend which continued until approximately 1.30 pm.  The index made its session low on support 6318 but the OBV made a HIGHER LOW subsequently breaking the downtrend and commencing a gradual uptrend.  A strong signal came in between 3-4 pm. time frame which was supported by a good P&F pattern – the strong upside break with index rising to 6370 subject to profit taking on close.  The MA on-line showed the significance of the strong OBV and futures subsequently continued in arising trend on Sycom – high 6405 and close at 6403.  This strongly suggests Index will be up on Monday - 52 point premium of futures of cash needs some adjustment.    This was definitely not a market to stay short overnight. Traders would do well to monitor OBV and develop an understanding of how it works. Volume is the driving force in markets.

THE WEEK AHEAD – Market coming up to resistance at 6400 area.  Sycom has been up here 4 times.  Gann says – if it breaks here – market should go higher which is supported now by other technical indicators where DM just positive for a long market and moving averages also.

Time periods to watch – Tuesday 10/7 12.0 pm – 108 Time Periods from low.
 45 degree/and angle below (A) converge 6400 Square Time/Price
Friday 13/7  11.0 am 144 Time Periods from 6184 low
                     11.30 am. (2x108) from 20/6 high

144 Square of Time and Price off 6184 low price level Friday 13/7 6474.

Angle lines of support:       
      9/7     45 degree          open 6368 close 6390     (A)  open  6324  close 6338
     10/7    45 degree          open 6392 close 6413     (A)  open  6340  close 6357
Resistance off highs:
      9/7      (1)                     open 6380 close 6394     (2) open   6390  close 6406
     10/7     (1)                     open 6390 close 6406     (2) open   6408  close 6422

Trading Range on Index could be described as a broadening type formation – a difficult one to trade and assess at times due to the extreme volatility making most technical indicators useless but the price and time charts provide lots of clues.  Sycom and Dow Jones continue to “rule the waves”.  The latter could well be breaking topside of its recent trading range.  The trading patterns of opens and closes need to be studied very carefully – they provide some of the best opportunities for traders.  One observation from MA and the harmonic moving averages i.e. short trades when 30 m/a is trending down and long trades when it is trending up.  P&F charts plotted manually a great aid for targets.  These charts highlight the areas of accumulation or distribution.  SPI futures can be a cat and mouse game.  It can be cruel if trading against the trend at times. Keen overnight traders would do well with MA on-line with recommended indicators.