The Dax is opening weaker this morning. I think that I will want to be short into noon today. Although we may have a bounce around 8am, I think we will see lower prices for the first half of the day. The hourly chart below is making a rounded top, but I am not convinced we are beginning a big move lower. I will look to be a buyer if we hit 6920, and move back up again. 6920 is a good support area.
Click to enlarge
The 15min chart below is already showing the market is oversold. Don't listen to that. If we get a bounce for a an hour or two this morning, and then low is taken it, it could easily signal a trend lower into mid-day.
I am short crude oil. We had a failed retest of the $119.80 area, and I initiated a short around 118.50, with a stop above $120. I wrote about Crude Oil in the newsletter that I sent out last night. It should be in your email inbox. We had 3 waves up over the course of the last 15 months. Each have terminated in the region of a $30 advance. You can read more about it in my newsletter, which of course is free. If you havent got it, email me on info@tradertom com.
Oil may be retracing, but the FTSE looks poised to move higher. I am long on the back of the results in BP and SHELL, which is pushing up the index (20% component)..... FTSE hit support and bounced this morning....
I want to thank everyone who emailed me regarding the LIVE trading room. I ran it for the first time yesterday afternoon. I wish I could say it was a roaring success, but that would be a lie. I think I had a little bit of performance anxiety in me yesterday. I missed some trades that I would not normally miss, and I let a 4 point SP500 winner turn into 0. The net line was -6 points on the day, which is quite unusual for me.
I also had to get used to execute my trades at the same time as posting my trades so there was no gap between the price I executed at and the price I wrote I would execute at. I am working my way around that by having prewritten sentences ready to be copied and pasted into the SKYPE messenger. For those of you who have expressed an interest in attending the LIVE trading room, I will contact you over the next week. I want to test this on the handful of people who are in there now and weed out the silly mistakes before I accept more people into the room. You should hear from me early next week.
The SP500 swing chart is consolidating near the highs of the range. The last swings down have terminated at current levels. I would be a buyer at 1378, if we get there. I am also inclined to be a buyer at 1380 retest. I think the markets are bullish on the chart, and I am looking for buying opportunities.
SP500 Futures
The FTSE 100 chart is in a similar situation as the SP500. I have been a buyer this morning because I believe the chart is telling me that we have entered a trading range after a good run. The chart suggest there will be resistance at 6100. My game plan is to bet on a re-test of this area, and continue to buy dips.
FTSE 100 swing chart
21st April 2008 06:13am
Good morning,
The Dow broke up to a 3 month high - a bullish developement.
However, when you look at the weekly chart, the break is not so clear cut, at least not yet. Nevertheless, it is bullish, and the trend for swing trading is up. I wonder if this is what Elliot Wave guys call a 4th wave. Behind us we have a lovely bullish pattern though, a double bottom, or an arch re-test. After this I will be more bullish for swing trading than bearish. If we move back below 12550, then it is a failure, and that is a short position. I wrote a newsletter last week which pointed out I was bearish against resistance at 12700. I wish I had stuck to my guns and held on to the bullish belief. I showed you all the bearish articles which to me was a good contrarian indicator. Now that we have broken up, I think the whole world will be watching this. A long position requires a stop at 12500. I think we will move higher from here, but it is still a bear bounce.
The FTSE 100 from 2000 is a lesson we should not forget. Within the context of the long decline there were plenty of good bounces, BUT they were still bear market bounces. This chart is a snap-shot from 2000 to 2002, so you remember that we are still in a downtrend.
So I am warning you to keep an eye on the trendline which will come into play very shortly in the FTSE 100.
The DAX is really interesting because it is underperforming the Dow. The DAX has failed to make a break above the current swing, which puts it in a weaker position than the Dow.
Finally the US dollar - I am still betting on more strength for the dollar. Nothing more to say there.....
Finally I have a special message. I have deliberately put it last because if you have read all the way down here, you are probably serious about trading. I generally take home in the region of 30-50 SP500 points a week. In the Dax it tends to be in the region of 75 points a week, and the same for the FTSE. I am hosting a live trading room, utilising the functionality of SKYPE. It is a test phase for the time being, on an invitation basis only. If you are interested in being in my LIVE trading room, where I post the moment I place a trade myself, then please send me an email. This means that the second I place a trade, you will get a instant SKYPE message telling you what I have just done.
ANALYSIS
