this is high breakout. looking at magik numbers
DOW
FTSE
Daily
Week
Daily
Week
6762
7180
Pivot
3563
3852
Pivot
6815
7330
R1
3625
4945
R1
6671
6920
S1
What a day on the Dow, the so called expected rally fizzled out at the end of the day. How many more rallies can we expect before we get a real solid rebound. At the moment this is manifesting itself into a domino effect to drive prices lower. This is a loaded rubber band as explained in my edition 1, for the week we are down close to weekly S2. Overnight there was a flush down right after the market closed to bring the futures to 6610. The speed and ferocity of the flush down depicted stop losses parked right below 6700. If we don’t get a rebound today, you can very well expect a big flush down to clear all bulls. The flip side is the lower we go the greedier the bulls get and the more complacent the bears become so a strong rebound is not far away.
Dow
The Dow closed at 6725 on Tuesday. We are again expecting a rebound today, but would most probably fail.
We are expecting the Dow to trade within a range of 6815 (daily R1) and 6671 (daily S1). Swing is neutral at 37%; Overnight futures were very positive on Dow and was up 1%, right up to daily R1. We expect the Dow to trade within the range. Support at 6715 and 6600 is probably the last support left. After 6510, just throw in the towel and sit back if you are a bull.
Trade plan
Buy at 6670 target 6888 stop is 6500.
FTSE
The FTSE index closed at 3512, in an oversold position. The expected trade range is between 3625 (R1) and 3450 (S1). FTSE should also rebound today from the oversold condition and then track Dow on the open. The FTSE has fallen more relatively to Dow lately and is now back in the neutral zone on a discrepancy basis. This makes the long position on FTSE very favourable compared to shorting. Any proper rebound will be very strong.
Trade plan
Buy as close to yesterday close as we expect a rally to at least daily pivot, stop 3435
Best to your trade,
Mr.Magik
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