ASX into possible reversal zone…

Monday March 8th 2010

Weekly Trend:		Up
Daily Trend:		Up
Daily Momentum:	___	Up

The upper boundary of the reversal zone we discussed on Friday night was almost tagged today. This is the area from which any reversal should technically take place, but as we said, confirmation back through 4717 is required to get anxious. Todays close was quite weak and there is a small gap just below the market which will more than likely get filled in the coming days. Added to this we have four RED warning bars. Normally when we get five in succession a reversal of some degree will more often than not occur. Most strength today occurred in the smaller end of the energy and mining sectors with some substantial jumps. We’ll be discussing the Material Sector in more depth tonight with a full review. A little caution required here.

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Mar 5th 2010

Weekly Trend:		Up
Daily Trend:		Up
Daily Momentum:	___	Up

We missed out on a few developing breakouts today today, namely CSL and CTX – both of which we’ve spoken of in recent reviews. They just didn’t quite fit the criteria. Another that is very close, and yet to break, is TPI. The market is approaching an important level between 4800 and 4850. Ir price zips through this level with some force then perhaps the immediate down turn we’ve been looking for is not the correct analysis and that 5000, the January highs, will come under threat. Some broader US indices have already broken through the January highs, so these are good signals of strength. That said, tonight is US employment data which tends to be a market moving event. Apart from volatility I’m wondering if it can set direction?

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Mar 3rd 2010

Weekly Trend:		Up
Daily Trend:		Up
Daily Momentum:	___	Up

As you can see above, the daily and weekly trends have now turned up, meaning that the ASX Systematic PowerSetups are in action again. If you do follow that portfolio be sure to download the new signals. This also means that the real time model account will start placing trades again. As I stated last night, we’re unable to know how far this renewed strength will take us. It may rollover and die next week, or it may keep going for 3-months. We need to stay with the trend until it tells us otherwise.

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Mar 2nd 2010

Weekly Trend:		Flat
Daily Trend:		Flat
Daily Momentum:	___	Up

Its been over a month since I made a short term trade on the ASX. Its been a good time to sit on one’s hands and do nothing. The ASX has just not be conducive to short term trading for many months now, unlike the US which has enough stocks exhibiting enough short term momentum to be worthwhile. That said there is a flutter of interest coming back in here. Our daily and weekly trend filters are on the verge of kicking UP which will switch on the Systematic Power Setups again. How far the market sputters higher is never known. Perhaps it will roll over again, or perhaps it will kick nicely. The other point of interest is the NASDAQ is showing some good strength. I just wonder if its about to try and tag its January highs? Feels like it.

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Mar 1st 2010

Weekly Trend:		Flat
Daily Trend:		Down
Daily Momentum:	___	Up

A good performance today on reasonable volume, especially since some weak economic data came out of China. Normally when we get a weak lead from China we tend to dip. In our full review of the ASX-200 (XJO) on Friday night we looked at the higher probability case for the local market to rally toward 4800 or so before rollowing over. Today was another good step in that direction. But mark my words; we’re still stuck in a broader trading range – the same one we’ve been in since September last year. Trading has been difficult and will remain difficult. Small ‘hit and run’ type profits are the best rather than looking for the longer swings.

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Feb 25 2010

Weekly Trend:		Flat
Daily Trend:		Down
Daily Momentum:	___	Up

Big reversal day for the ASX today and continues to hint at our thinking that a near term high has been put into place. Over the course of the day the market reversed its early gains and dropped 2.1% on high volume. One of the markets favoured stocks, TOL, usually associated as a safe haven investment, was slammed almost 18% after missing guidance. Indeed it ranks as the largest single day fall since it was listed in 1993 – a lot of damage here. The markets around Asia also dived as political and social unrest erupted in Greece. As mentioned in the last few evenings, Greece is possibly a trigger for Euro-contagion concerns and may be the central reason a major selloff is not far off. We’re sticking with short side plays on the ASX even though momentum has picked up in the US.

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Feb 24 2010

Weekly Trend:		Flat
Daily Trend:		Flat
Daily Momentum:	___	Up

We mentioned last night that the technical picture suggested a near term was imminent and it seems we may have found it. Today saw decent weakness on back of numerous factors, including a weak lead from US equities and base metals, as well as strong selling in Japan that weighed on Asia. In an ideal situation we’d like to see the local market rotate in a sideways band for another week or two before dropping lower, but of momentum picks up right now we could be on our way toward that larger target area that has been discussed in the nightly reviews. Trends remain flat, both weekly and daily, and the broader range is also well intact. I have no immediate directional bias but do favour downside over the coming months.

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Feb 23 2010

Weekly Trend:		Flat
Daily Trend:		Flat
Daily Momentum:	___	Up

All in all a quiet days trading with most emphasis on eanings releases. The market was soft through most of the day yet rallied back to close on its highs after Hong Kong rallied hard in late trade. We continued to be held by the braod range that’s been in place since September. That said the technical picture is suggesting a near term high right about here to be followed by some decent weakness, but what will trigger this is uncertain. It appears the only current macro issue on the agenda is the ongoing deficit crisis in Greece and whether or not that will spread through the Eurozone. Range bound markets make for frustrating trading. It may pay to be quick on the exits rather that await full completion of swings.

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Weekly Trend:		Flat
Daily Trend:		Flat
Daily Momentum:	___	Up

Big strong day in the local market which has now retraced 50.0% of the Jan 11 – Feb 9 decline. As is always the case. we expect these retracements to travel back to the 50.0% to 61.8% level before reversing again. That said we need evidence that weakness is entering and as yet we’re not seeing it. Todays strength was enough to tilt the daily and weekly trends back to flat. Another two days of this will see them revert back to bullish and our systems will kick in again with new buy signals. A close look at the S&P 500 chart shows a 3-wave decline into the early Feb lows which is now reversing sharply. I just wonder if yet again we’ve got a false downside pattern and that the market will kick back up in that grinding fashion that we’ve seen since September? Difficult trading conditions without doubt.

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Feb 19 2010

Weekly Trend:		Down
Daily Trend:		Down
Daily Momentum:	___	Up

The trend remains down. The bounce we’ve been discussing over the last few weeks has slowly taken shape, although with the US raising interest rates over night there is now scope that we’ll start heading lower for a week or so before completing that bounce. Our bullish divergence, the cornerstone for the bounce, has now fully unwound. In an ideal situation we should weaken for a brief period, bounce again through this weeks highs and then start the major leg lower to the mid-year target levels. The raising of interest rates is of concern. Stopping inflation is one thing, but undermining delicate confidence is something  different altogether and I would assume that now is not the time to be taking that route. We’ll certainly see how the US takes it tonight, but as at writing the night trading shows the Dow Jones futures -100pts.

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