SPI  06392 H6399 L6352 C6397
DM +DI31 –DI 21 ADX 16 M/as 5/6386 15/6314 30 6329

ASX 200 O63914  H 63916 L63940 C63826
DM  +DI 27 –DI 21 ADX 21 M/as 5/6376 15/6322 30/6315

Again another volatile week for SPI trading with elevator rides in both the ASX 200 Index and futures. MARKET ANALYST is a brilliant piece of software using a 5 minute time frame, 8 period Directional Movement and harmonic moving averages of 5/15/30. Putting the Parabolic Stop in the DM box gives great signals after a strong trending run when the ADX crosses the P.S, a prime signal for locking in profits with the ADX running up from +50 to + 70.  Also the clear crossover from a short market to a long market or visa versa is worth noting.  The “clusters” of the moving averages provide momentum moves whilst the “even stacking” gives an indication of a correction.  The 15 m/a and 30 m/a offer support or resistance in the prevailing trends especially after the P.S./ADX signals. The wide ranges in daily trading offer plenty of opportunities.

I suggested in last week’s commentary that the index was likely to rise for the SPI June contract closeout which was indeed the case and also the warning not to be on the wrong side.  Traders who bought the opening had a fast move up with the actual high into the 11 am. time frame. They would have made a killing. 

The chart to follow is the ½ Hourly on the ASX 200 Index. It is a brilliant example of using Gann techniques with 144 2 mm square. which continues to provide amazing signals to be aware of – it is time to watch out on the futures.  The published chart has been reproduced from a hand drawn one and when combined with a 2 pt P&F will provide a lot of the answers.  Levels of support and resistance are important as well as Gann Angle lines – they work on this market.  The computer seems to know exactly where they are.  The index made its high close to 144 time periods from the 4th June high. The 108 time from the low on 13th June comes in at 12.30 pm. 25th June, the 144 time 10.30 am. 28th June.

The past week has seen SPI closing on highs and being sold off on Sycom – the on-line MA is great for traders who like to burn the midnight oil.  The physical chart provided some useful information  - opening lower on the 45 degree support line which it touched several times and then broke below  around 3 pm. falling to the support low 6349 of 20th June and then staging a strong rally to close at the day’s high.  Alas,  a bull trap for traders who went long.  SYCOM took futures up to  6402 and then  a further sell off – the published chart tells the story – falling to a low of 6320 with the close at 6331.  This strongly suggests SPI will trade lower on opening.  This is where  the Gann Angles really help – the angle below the 45 degree becomes a target area - at 10.30 am it comes in at 6330.  In the face of a weaker Dow Jones – a high probability.  Traders should take note of these angles – Tuesday 26th June  6287 10.30 am., Wednesday  27th June 6300, Thursday 28th June 6312. Range Retracements: 64092/61702 = 239 Points – Gann & Fibonacci worth noting On your  charts:   1/3 = 6329.6, .382 = 6318.0, 50% = 6289.7, 61.8% = 6261.5, 2/3 = 6250.2.  So often these retracements fall on Gann angle lines.

MA’s candlesticks on opening trades a great assistance – red candlesticks imply that the market is likely to be sold off.  The 1pt and 2 pt. P&F charts are great for both opens and closes of this market.  The published chart on Friday’s action following Sydney close is brilliant for trend followers and the 30 m/a.  It is likely that a clustering of the m/as if a base forms for a rally will provide a momentum move.  Traders stay alert for opportunities!  The importance of money management and margin calls, positions both ways need to be carefully considered.  Indicators on daily charts cannot cope with the extreme volatility and the price chart is the important one.  A testing time for the bulls!