XJO (ASX) Indices 13/06

Originally posted by Launched: ↑

Big week ahead with a lot pain across almost all markets over the last week.

The head and shoulders pattern played out as expected from previous posts with the right shoulder dropping at an alarming rate.

Was expecting a bounce around the 6800 mark however MMs used the long weekend as a shortcut past the HVNs.

Aussie 200 is currently left in no mans land with minimal inventory so a move in either direction could play out and it could be a quick one with such poor liquidity between 6600 and 6170.

Buy/sell trigger left in the red for now and there hasn't been much to show bulls can recapture control.

Daily below

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To get a better understanding of the moves over the last month lets look at the 30min chart and you can see one hell of a set up for the smart money.

The heavy distribution channel dating back to mid May was played like a fiddle to the crescendo which happened to coincide with the June long weekend.

This has left many many trapped long positions - most of which are 7110 - 7190
POC for main distribution range is 7130

The next consolidation range was from Tuesday open to Thursday close at 4pm.
The POC for this range is 6600 (no surprises there)

MMs once again used the lighter volume to trap more longs in overnight trade with the ASX opening at around 6450.

The 6450 level seems to be an important one as the it's the POC from Thursday futures to Saturday close.
It just so happens to be the level at which the index closed at also, setting up for an interesting week ahead.

If bulls can hold the 6450 level then theres a good chance we will see a run back to 6600.

However if bulls drop the ball then we should see the price come down to test 6170 level.

30min chart below
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With the XJO in such a precarious position now is not the time for hero trades so size your trades accordingly

Good luck whichever way you trade...

Expand

Last week was fairly non eventful week with price bouncing between the 6450 and 6600 levels mentioned in last weekends post.

After hours on Friday saw the biggest move with US putting on a decent squeeze which helped Aussie futures push through the important 6600 level.
This sets up for another interesting week ahead.

Lets look at the 30min chart first and it's easy to see the tight range of trading for the week.

Apart from the Friday night pop there really wasn't much traded outside of the Value Zone (6505-6560)

The upper edge of the Value Zone at 6560 is very close to Fridays POC of 6547 and also the weekly POC around 6530 (also marked on daily chart)
Fridays ASX session is marked by the white box.
This should provide decent support for any pullbacks and I'd expect buying to step in initially if the 6530-6560 zone was tested

30min chart below
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Switching over to the daily and have marked all relevant levels above and below.
If bulls can break above 6800 then it certainly puts a test on the 7000 level back in the picture.
However, the area between 6700-6800 is a high traffic area so expect some chop before any clean breaks up (a good squeeze could fix that).
Also, sentiment is still at an extreme low so there is a chance any rallies get sold into to at least test the trading range for the last couple of weeks

Daily chart below
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As always DYOR and good luck whichever way you trade.