wednesday trading, page-3

Intraday stuff from me...

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Okay... a fairly strong down day,  followed by quite a down turn overnight...

I'll now look at the lower timespans, and see what they have to say and whether this turn might have some further legs, and how I would like to play it.

First though, after such a downturn my thoughts that are paramount are "don't short the hole" ...

but enough of the thoughts, time for the chart stories...

Firstly the daily... a bit skewif due to the charting package working off European times for this timespan.

Daily:

A lot of this greater chart and price moves have been covered in the last two posts that dealt with the weekly and Monthly timespans, the main interest here is the area marked by the red dotted cross hairs, as this is where the first MAJOR downside target lies according to my methods, based on MACD Histogram divergence, and is also  a strong support area mapped during the rise up.

Note the Blue dotted cross hairs also give a further downside targetwhich I do actually expect to be hit eventually... when though... no idea could be in a decade for all I know though I do have my suspicions that it could be sooner.

A lot more water to go under the bridge yet though, and one large down day does not a turn make. Particularly after the strong run up we have had where many large down days were just blips in the big trend.

Okay so let's move in to the right hand side of the chart and a look at recent action and potential support and resistance, short term.

In terms of moving averages on price, moving averages on the MACD and the stochastics, we are in a bit of no mans land at the time of the chart capture.

looking at the manner in which price has broken through the 13MA I am inclined to beleive that the next stop in the greater scheme of things is the 21 period ma below.

The location of the MACD moving averages also suggests to me that a meet and greet is a high possibility of these two lines, and a hit of the stochastic signal line ont the "overbought" 80 percent line also seems fair.

One needs however to understand that these indicators are all lagging, the levels on the stochastic and MACDs mentioned could be hit with very little movement of price in the next time period.

And so... down to the lower timespans to see what kind of tale they wish to tell.

Hourly

Alright...

On this chart there are a couple of things to note:
First, the histogram target marked by dotted red cross hairs.

This level, 4817 or there abouts, is fairly significant. first one can see it is the top of the big breakout candle that occurred on the 28th of december.

Note, though this targetting method is fairly accurate it is not the be all and end all, and there have been enough circumstances, particularly for short term downside targets during this run up, where DOWNSIDE targets have failed to be reached.

 It is interesting to note the two horizontal thin black lines drawn from recent historical support and resistance, particularly the lower one which seems to have formed a strong line in the sand to halt overnight downside action.
The higher line, at 4887, roughly 30 points above the closing price, shows restance which corresponds quite nicely with the 13 period Moving average level mentioned on the Daily.

On the MACD I have marked out a five wave down count.
This is a very nice clean set of waves and well worth noting.  After such a clean 5 way move, and with the moving averages now at a level below the zero line fairly close to an equivalent level at which the wave counts started, I have an EXPECTATION that some upside from around here could/should occur.

Not also the ellipsed  "wriggles" on the stochastic, which would suggest we are winding up on this indicator.

Okay, now a brief look at the 10 minute to wrap up current intraday information:

10 minute:

Here definate signs of impending upside are showing, with higher lows on the MACD showing where lower lows are occurring on price.

This timespan, overnight signals can be a bit dodgy, however, the past has shown they generally do give a fairly good indication of initial movement when market opens, or at least movement once the initial future market settles down.

Targets to the upside, correspond well with previously marked (Horizontal thin black line) points of resistance on the Hourly, which as mentioned also correspond to moving averages on the Daily.

Okay so on the ten minute, I have just looked at upside potential,

Interestingly enough, the downside target potential via the last most extreme histogram on this time span is located in the same place as the above mentioned hourly downside target histogram as per below, which in its tightes form suggests a level of 4830, some 18 points below closing price.

So... How to play it?

MMMMMM I'd suggest that any downside on futures open be used to close existing short positions short term, looking at the potential to reload on shorts around 30 odd points above the current closing price, should lower timespans indicate faltering around that level.

Should price early on proceed down to the 21 period moving average, then I'd suggest this could be an area to capture a possible long oriented bounce, intraday signals withstanding.

;)