SPI 06198 H6249 L6198 C6223
DM  +DI8 –D32  ADX 16, Crossover to Short Market, M/AS 6/6308,  15/6328, 30/6314

The bear moved into world bourses with big bearish candlesticks and big ranges to the downside which I believe are signaling a significant intermediate correction in the weeks to come.  Traders will be able to take advantage of the volatility especially with the MARKET ANALYST  software using the right methodology. Overnight Sycom presents a big problem for day traders.  Last comment I highlighted the importance of use Gann squares and angles on the ½ Hourly chart on the ASX 200 Index.  I prepared a special chart from my hand drawn 2 mm to make it accessible for scanning.  The important angles off the 6409 high on 4/6 captured the lows on the index on 7th and 8th June.  The rally on 7/6 met resistance on the 45 degree angle which interestingly comes in at 6284 at 10.30 am 12th June and 6264 at 4.0 pm. The angle below was resistance 6243 on 4.0 pm. 8th June.  The significance of the break of 45 degree angle off 30th May low on D – Day 6th June when the downward trend really got underway.  It was a case of buying the lows and selling the rallies. Everyday is a technical adventure in the SPI. The MA  5 minute chart which captures Trading from 11 am. 8th June until close Sycom close 9th June is absolutely spectacular with the June contract falling to a low of 6153 and then reversing to a high of 6269 and close at 6265 no doubt aided by Wall Streets rally following its plunge the previous day.  As a point of interest, the low was made on a Gann Angle.

ASX 200 INDEX 8/6/07
06300 H6300 L6197 C6231

DM +DI18-DI29 ADX 27, Crossover to Short Market, M/AS 5/6328, 15/6313, 30/6299
After making its all time high on 4th June at 6409.2 which was 90 degrees in time from March 2007 lows, a low of 6197.3 on 8th June, a decline of 211.9 points.  Using the close High 6392.9 to close low 6197.3, a range of 195.6 points.  Traders should always calculate the range retracements and note them on their charts. 

High/low    1/3 = 6267.9, .382=6278.2,50%=6303.2, 61.8%=6328.2
Close H/L   1/3 = 6262.5, .382=6272.6,50%=6295.1, 61.8%=6318.1

A 2 Pt l box P&F on Cash an absolutely stunning example of this methodology which is shown on the chart example which combined both P&F technique with Gann Angles.  It is one for the textbook,  Friday 8th June action did a lot of P& F, a base to support a significant rally – 2 possible counts using compass 6300 and 6330.  Downtrend resistance on opening 6260.  P&F charts are great for showing distribution and accumulation areas and well worth the trouble when trading a volatile instrument such as the SPI which continues to live up to its reputation!

The right side of the chart the important one.  My overview for the ASX 200 Index is for a significant correction to the 6055 area in to the 23rd-27th June 2007 so there should be plenty of mileage for SPI traders trading with the trend in the weeks ahead. Watch out for clusters in the moving averages.