AU200AUD trade ideas
Risk Management - Tom DeMark TD 9 Still in Play ASX200 $XJO Was 7406 the top for the short term?
Was the breakout this week a bull trap?
Technical indicators such as the MACD and RSI are still with the bears.
If we close below the 21 daily moving average, time to reduce position size and risk until we can close above 7406 again.
Short setup ASX200 XJO$XJO (ASX200) some points of potential confluence over the coming days, suggesting a SHORT set-up. Overhead resistance, head and shoulders, against a ticking clock for a daily cycle high to be printed. One final run into a cycle high before rolling over.
Tail risk is high, if going long on the ASX.
1. On a short timeframe, the ASX200 looks to be approaching a resistance level, which started 7 June.
2. We also have the RSI reaching oversold level at the same time, however a steeper push over the coming week would steepen the RSI's reach into deeply oversold territory.
3. This might coincide with a peak in the right shoulder of a possible head and shoulders pattern.
4. It should also be noted that this coincides with the timing band for a daily cycle high and a descent into a daily cycle low around early to mid July. The DCL was set 19 May. 30 June marks day 41 of this daily cycle. With the headwinds I have noted above, it makes it difficult for the ASX200 to breach the Half Cycle High set on 16 June.
So, watch for a breach of the resistance level, perhaps, albeit brief and weak, before it rolls over.
Still bearish on ASXXJO looking to tumble soon. Lagging diagonal in white is complete, married with decreasing momentum on RSI, tells me we are due for one. It is unclear for how long roughly though. Lagging diagonals usually herald an intense drop and a complex correction. We shall see, as we live in unprecedented times financially. Goals in purple.
None of the above is financial advice, please do your own research - your trades are your trades.
Total Market MadnessSo as you can see from the chart, the last time we were this far above the 200MA was March last year (27%). Before that it was 2008 (~50%). Today we are now around 40% away from the 200MA. We are at the top of the trend, under Resistance R3 on the daily, Stochastic doesnt have any more room to go up (computer will probably say no at some point), BB is overstretched. There is also indication that we are starting to form a head and shoulders pattern with left shoulder and head forming on the daily.
Yet the market is still in euphoria (VIX is 15, XVI is 12, US10Y bonds are 1.5%), it seems that everything is just fine.... Until it's not. These types of market movements have happened before, and as the monthly shows, the end result is usually the same.
“When investing, pessimism is your friend, euphoria the enemy.”
— Warren Buffett
Elliott Wave View: ASX 200 (XJO) Looking to Complete Wave 5Elliott Wave view in ASX 200 (XJO) suggests the rally from February 1, 2021 low is unfolding as a 5 waves impulse Elliott Wave structure. Up from February 1 low, wave 1 ended at 6938 and pullback in wave 2 ended at 6648.6. The Index resumes higher in wave 3 towards 7172.8 and pullback in wave 4 ended at 6919.4. Wave 5 is currently in progress and the internal subdivides into another 5 waves of lesser degree. Up from wave 4, wave (i) ended at 7056.4 and dips in wave (ii) ended at 6999.6. Wave (iii) ended at 7115.2, dips in wave (iv) ended at 7090.1 and final leg wave (v) of ((i)) ended at 7136.4.
Wave ((ii)) pullback then ended at 7082.4 and the Index resumes higher in wave ((iii)). Up from wave ((ii)) low, wave (i) ended at 7203.3 and wave (ii) pullback ended at 7131.9. Wave (iii) ended at 7309.4 and wave (iv) ended at 7267.6. Near term, Index can see 1 more leg higher to end wave (v) of ((iii)), then it should pullback in wave ((iv)) before turning higher 1 more time to complete wave ((v)) of 5. This should also end cycle from February 1, 2021 low and then Index can see larger pullback.
Review of strategies for equities vs futures Part 26.8.21 Review of strategies for equities vs futures Part 2 looking at more difficult patterns on Bitcoin and DOCEUSD; Follow up on AU200AUD expanding triangle. ( i made misstatements.... if you know what support and resistance is...you will catch my "slips of the tongue.
ASX 200 STRONG CASE FOR A PERFECT WYCKOFF METHOD SETUP
The ASX 200 has been setup and going through the perfect Wyckoff setup over the past month. Now that we have hit all time high's, its clear that the demand or the BULLS are in full control and that shakeouts will be shortlived. Now that we don't have any ceiling the sky is the limit in at least the short / medium term.
Just have a look at the explanation and leave comments whether you agree we are in phase E?
Phase A: Phase A marks the stopping of the prior downtrend. Up to this point, supply has been dominant. The approaching diminution of supply is evidenced in preliminary support (PS) and a selling climax ( SC ). These events are often very obvious on bar charts, where widening spread and heavy volume depict the transfer of huge numbers of shares from the public to large professional interests. Once these intense selling pressures have been relieved, an automatic rally (AR), consisting of both institutional demand for shares as well as short-covering, typically ensues. A successful secondary test (ST) in the area of the SC will show less selling than previously and a narrowing of spread and decreased volume , generally stopping at or above the same price level as the SC . If the ST goes lower than that of the SC , one can anticipate either new lows or prolonged consolidation. The lows of the SC and the ST and the high of the AR set the boundaries of the TR . Horizontal lines may be drawn to help focus attention on market behavior, as seen in the two Accumulation Schematics above.
Sometimes the downtrend may end less dramatically, without climactic price and volume action. In general, however, it is preferable to see the PS, SC , AR and ST, as these provide not only a more distinct charting landscape but a clear indication that large operators have definitively initiated accumulation.
In a re-accumulation TR (which occurs during a longer-term uptrend), the points representing PS, SC and ST are not evident in Phase A. Rather, in such cases, Phase A resembles that more typically seen in distribution (see below). Phases B-E generally have a shorter duration and smaller amplitude than, but are ultimately similar to, those in the primary accumulation base.
Phase B: In Wyckoffian analysis, Phase B serves the function of “building a cause” for a new uptrend (see Wyckoff Law #2 – “Cause and Effect”). In Phase B, institutions and large professional interests are accumulating relatively low-priced inventory in anticipation of the next markup. The process of institutional accumulation may take a long time (sometimes a year or more) and involves purchasing shares at lower prices and checking advances in price with short sales. There are usually multiple STs during Phase B, as well as upthrust-type actions at the upper end of the TR . Overall, the large interests are net buyers of shares as the TR evolves, with the goal of acquiring as much of the remaining floating supply as possible. Institutional buying and selling imparts the characteristic up-and-down price action of the trading range.
Early on in Phase B, the price swings tend to be wide and accompanied by high volume . As the professionals absorb the supply, however, the volume on downswings within the TR tends to diminish. When it appears that supply is likely to have been exhausted, the stock is ready for Phase C.
Phase C: It is in Phase C that the stock price goes through a decisive test of the remaining supply, allowing the “smart money” operators to ascertain whether the stock is ready to be marked up. As noted above, a spring is a price move below the support level of the TR (established in Phases A and B) that quickly reverses and moves back into the TR . It is an example of a bear trap because the drop below support appears to signal resumption of the downtrend. In reality, though, this marks the beginning of a new uptrend, trapping the late sellers (bears). In Wyckoff's method, a successful test of supply represented by a spring (or a shakeout) provides a high-probability trading opportunity. A low-volume spring (or a low-volume test of a shakeout) indicates that the stock is likely to be ready to move up, so this is a good time to initiate at least a partial long position.
The appearance of a SOS shortly after a spring or shakeout validates the analysis. As noted in Accumulation Schematic #2, however, the testing of supply can occur higher up in the TR without a spring or shakeout; when this occurs, the identification of Phase C can be challenging.
Phase D: If we are correct in our analysis, what should follow is the consistent dominance of demand over supply. This is evidenced by a pattern of advances (SOSs) on widening price spreads and increasing volume , as well as reactions (LPSs) on smaller spreads and diminished volumes. During Phase D, the price will move at least to the top of the TR . LPSs in this phase are generally excellent places to initiate or add to profitable long positions.
Phase E: In Phase E, the stock leaves the TR , demand is in full control and the markup is obvious to everyone. Setbacks, such as shakeouts and more typical reactions, are usually short-lived. New, higher-level TRs comprising both profit-taking and acquisition of additional shares (“re-accumulation”) by large operators can occur at any point in Phase E. These TRs are sometimes called “stepping stones” on the way to even higher price targets.
Double Top Forming?Maybe someone can help me out here, but the double top we had prior to Covid in March 2020 seems eerily similar to the chart pattern currently forming on XJO. This would indicate a major pullback if it was the case.
Put your Gann away my Apes! SP500 off risk is the guide.Interconnected economies, US off risk -> ASX 200 off risk.
Don't believe me? SP500 crash model aligns nicely to ASX off risk!
So be patient...
Observation comparing ASX 200 vs S&P 500. S&P 500 70% crash?I'm new to investing and charting/analysis etc. Decided to compare Australian vs American market long term after looking at ASX long term first. It seems ASX mostly sticks to the regression trend channel I drew and American market was doing similar but has bull runs going far out of channel but rejoins and during GFC joined back to pretty much the same as ASX. Just looking at the trend my instinct is that this pattern would continue and S&P 500 would join back to channel within the next 5 years, which would be about a 65-70% drop from current price. Not sure whether both markets would continue for a while first, but they both look due for correction/crash to me. Interestingly what I thought was a crash last year due to Covid just looks like a correction long term for the long bull run of the S&P 500 which is looking like it's extending above its linear trend for the bull run.
Interested to hear others opinions on why they agree or disagree and when people think the next correction and/or crash will be and how much.
Thanks.
Australian IndexThe Australian index is breaking out of the recent range.
It coincides with the long momentum in China (as you may know, Australia has a lot of dependency with China).
I'll be looking for the pullback.
Like and comment !
AU200AUD_ Long, Trend is your friend "Trend is our friend up until the end." Bullish moves on the AU200 pushing high up to 7300.0 Good Luck
AU200 Index Sell Opportunity AU200
Sell @ 7110
SL 7140
TP 6600
AU200 is in ABC Flat Correction. B wave near 78.6% retracement of A wave .
Low risk sell entry near 7110 with SL 7140/7172
Targte 6600
ASX/200 - NOW IS THE TIME TO BUY AUSTRALIA'S STOCK MARKET INDEX Fundamentals
Now is the best time to buy Australia's stock market index, as Australian companies exporting commodities to the rest of the world during the recent commodity boom, is pushing up the share prices of the biggest mining companies within the country and pushing up the index!!!
Mining companies are seeing their share prices rise due to the booming commodity demand from the re-opening of the global economy as the vaccination rollout is pushed forward, alongside the commodity and precious metals demand for the transition into clean energy.
Commodities
Australia’s commodity export economy is reliant on export demand, especially from China. Therefore with strong global economic growth expectations from fiscal and monetary stimulus, Demand will be strong for Australian exporters, along with Domestic growth, supporting Australian equities.
Key Economic Data To Watch
Chinese & U.S Manufacturing PMI
Correlation - S&P500 & ASX/200 Historically move closely together.
Technicals
A breakout above the recent high 7175 would be another opportunity to enter a long buy position.
Risk Management
ATR Volatility Stop Loss: 13.00%
Risk/Reward Ratio | 3:1
Stop Loss Area: 6188 (925points)
Take Profit: 9301 (2,191points)
Buy the dip?If you are looking to buy the dip from last week's sell off, the chart seems to tell a different story. From what i can see, even though the market has come back up since last week, all it has been doing is testing the 50% fib retracement from last week's high.... It also can't go higher than the midpoint trend line. My guess is that it's prepping for another downside to complete the elliot wave that started a couple of weeks ago from all time high. I could be wrong but the trend always seems to be eerily followed by this index..
Are we heading for a Correction?Looks like the retracement to 50% fib is complete and attempts to get past it today failed. Could be signal for a slight correction - not sure about it going to 200MA in the short term but at least to just under 50MA resistance based on previous trend
XJO - no time to panicThe ASX has just broken its ATH on Monday at 7172 (although I'm told if you add in dividends, we're actually quite a bit higher). However, the moves today (and likely tomorrow judging by the US futures), will likely cause some concerns amongst traders. Its a relatively big move (at least for the last couple of months), but in the scheme of things, today is just 1% down.
From what I'm seeing the XJO just slightly above Monday open and around the high point of Friday. Nothing to worry about here.
In addition, the overall trend is still up and the Bollinger bands are starting to expand again after tightening last week.
TO me the ASX actually looks like it has broken out from a range it was stuck in over most of April, this could just be profit taking or a pullback after a big move yesterday. Although I suspect that it's entirely being driven out of fear arising from the US Markets.
All in all, I think these are pretty bullish markers currently.
I'm watching it closely and I think the telling point will be if the 50 day MA is breached at around 6900.
Anyway, happy trading and if you like this post, check out my blog at www.nickthetraderguy.com.
Cheers,
Nick the Trader Guy
Possible AUSSIE 200 fractal. Might not happen, but this fractal is just a much larger version of the start of the 2010 bull run. More dollar printing ahead. People jumping into equities as there's no incentive holding money in the bank. Just a theory, but interesting to see if it plays out.
