Monday March 8th 2010

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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ASX into possible reversal zone…

The market has posted 2 large up days in a row, both of which closed at the sessions highs. Interestingly enough we’ve not yet regained 50% of the ground lost over the last 3-weeks. Also to note the decline through June was -368 pts and the one we’ve just been through, or going through, was -382 pts. Seems the theory of -9.5% declines stays true, so far at least. The one thing that is different from June is that the Dow Jones Transports has made a lower low this time around whereas in June it did not confirm the Dow Industrials weakness. I have tentatively added a few long trades in just in case this market decides to rip higher like it did back in July. The Systematic portfolio is still in lockdown, but another strong up session could well bring it back on line again.

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9 November 2009 – Good follow through…

The suckers rally over the last week was just enough to create 2 bearish setups for us, both of which activated on last nights 730-point plunge. HMY is a Gold stock and I did express concerns that a flight to quality may put a bid into it, but it too fell over, dropping almost 10% in the session. I have my eye on Wachovia Corp (WB) but the issue here is that US government intervention could be seen into it at any time which would more than likely create an extreme gap higher. It’s simply not worth the risk. The good news is that the price action over the last week, including last nights dive, continues to help our setups form. A little more wiggle and waggle over the coming days will see a multitude of opportunities. But here’s our fills from last night and the state of the model account:

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16 October 2008 – No new dawn today…