Date

Time

 Comments

30/04/2007

19:33

We're still in the downward sloping consolidation zone.

My current thinking is that prices will break out to the upside but I'll trade a valid signal, either way, when I see one.

27/02/2007

15:41

Interesting day today.
 

Prices moved below the green consolidation zone line but are still above the lower black consolidation zone line.

I'm standing aside for now, to see how this develops.

16:20

Here's where we stand just before closing.

It looks like we're headed for a upward breakout, but not quite yet!

26/04/2007

10:01

Well, prices did head back up to 6200, but the next time I checked they went straight through - on the back of a strong Wall Street. I think I was getting excited, but it was good to hold off in the end.

Here's an hourly chart of the SPI. It's over a longer time frame and the price bars are a bit squashed up - the point of it to highlight the longer term channel and that we're actually still in it with a brief dip out of the bottom.

I've drawn a new channel that is forming (black lines). A channel that slopes down usually breaks to the upside, so I'll have to see how things develop.

19:06

Prices have well and truly cracked the 6200 level, with a plunge as low as 6137 within the last hour - currently 6162.

I'll probably be looking to short during the night session - not normally something I do - and I'll keep an eye on Wall Street too.

I'd like prices to rally up first to see where they find resistance - I'm thinking if 6200 proves to be strong resistance (it was strong support), although a weak market may not make it back up to there, entering after a lower high with a stop just above the consolidation zone line could be a good trade.

16:32

As you can see from this latest chart, prices look like they're being propped up by the trendline.

They closed @6203 and as I said before, a clear break below 6200 would trigger a short trade for me.

14:19

We saw a spike up to 6262 before lunch - it's turning into another volatile day.

Prices are back at the lower consolidation zone line - on it as I type.

A convincing break below 6200 should trigger another short trade.

24/04/2007

10:58

The SPI rallied at the start of night trading last night, only to fall back toward the end of the session.

Today's open saw prices plunge to the lower consolidation zone line, with a brief dip below.

This area has provided resistance once again, and once breached, we should see prices fall away.

Well, the 'real' SPI rallied to 6286, so that would have stopped me out too.

But then, the market fell like a stone to the bottom of the large consolidation zone!

The hourly chart below has the larger channel indicated - that's in line with the one on the daily chart. I've made the channel lines thicker to hopefully indicate their importance.

The SPI ended up @6228 in night trading on Friday, helped by large gains on Wall Street with the S&P500 +13.62 and the DOW +153.35.

I use spread betting to trade. There are a number of advantages such as limited risk trades (with guaranteed stops) and being able to select the 'points per trade' rather than number of contracts.

One disadvantage, however, is that after the market closes, spread betting continues and is influenced by various things (other markets, sentiments, expectations, other bets). After the SYCOM session closed, Wall Street must have rallied further because the spread betting prices ended up @6277 - just stopping  me out (my stop was 6273).

It's a tad annoying when you anticipate the market correctly, but the spread betting says otherwise and your stop is hit. Saying this, the SPI will probably catch up on Monday's open (although it doesn't always).

Anyway, the up shot is that this trade was stopped out using spread betting - you'll be able to see for yourself if it would have been stopped out using actual SPI contracts on Monday.

Back in November 2006, I said I would post the good, bad and ugly - this is some of the bad/ugly.

One thing I hope I've learnt from this is that the over all daily trend is up - and I'm shorting the market which is risky, if looking for a longer term trade.

I think I need to remind myself of the longer daily trend before making a trade and only trade in the same direction, unless I'm looking at a very short term trade.

As I've said before, the current entry method is good - most of the time prices do move away in the anticipate direction.

My exit and stop discipline needs to improve.  If I'm wanting a longer term trade, I'll need to watch the Daily chart.

This is the latest daily chart and as you can see we're still in an uptrend channel.

20/04/2007

17:02

Despite Wall Street's small decline overnight, the SPI rallied fairly strongly - perhaps yesterdays decline was overdone?

In today's session, we moved 'up to sideways', in what looks like a corrective rally.

The SPI is about where I shorted yesterday, so hopefully this will turn into a lower high and I'll be able to move my stop down early next week.

I'm expecting further declines next week and it'll be interesting to see what happens on Wall Street overnight, as this may give us a heads up for Monday.

16:56

The SPI continued to fall today, so the entry this morning was correct.

Of course, after a couple of trades having been stopped out the tendency can be to take profits early, so it doesn't happen again.

Well, I'll move stops down after a lower high and weaker prices but I'm still viewing this is a 'longer' term trade and not just for 50 points or so.

I'll see how it develops.

19/04/2007

10:52

With prices bouncing around overnight, they've final broken the consolidation zone to the downside.

I moved the bottom line (of the top consolidation zone) down to capture yesterdays low and widen it slightly - mainly to give prices more room to move and because a more substantial move would be required to break the zone, hopefully providing a more reliable signal.

Here's the latest chart. I sold @6230 with a stop @6273 - just above the previous lower high.

17:04

Interesting day today - we touched both the upper and lower trend lines of the top consolidation channel.

I think (hope) a breakout will come soon.

18/04/2007

09:39

The SPI rallied further during the night session to close @6256 (spread betting close) on the back of a positive Wall Street.

It's in the middle of the smaller consolidation zone - let's see if it breaks out today.

16:41

Prices continued to fall throughout the session today, with a late rally into the close.

The hourly chart below is 'zoomed-out' a bit to indicate the ongoing parallel consolidation channel/zone lines as well as the new one I added to the previous chart.

It shows one channel was broken and recovered and the large one remains clearly intact.

A break of the smaller channel may provide to be a good short trade down to the lower line. A breach of 6200 would probably indicate such a move has started.

17/04/2007

09:52

With a strong Wall Street overnight, prices once again moved to the top of the consolidation channel/zone.

Using the latest 'major' lows, and plotting the lower trend line along these, you can see that the channel is narrowing. The swings are getting smaller and time is running out - we should surely see a break soon.

Here's where we stand just after the open this morning.

16/04/2007

17:06

Well, we had a fair sized rally today to push us back to the top of the consolidation channel/zone.

It's actually another all time high, closing @6229.

16:32

The SPI fell further today, ending @6174.

That's -59 on the night close and -32 on yesterdays daily close.

I'd still like to see a breakout of this large channel, to make a trade, but with it being so wide it may take a few more session to do this.

One thing's for sure, it can't stay in the channel forever.

Prices touched the top of the upper trend line during the night session and moved sharply lower during the first hour or so of today's session.

Let's see how this develops.

16:53

This is a daily chart of the SPI continuous contract, to give a longer term prospective:

We're still well and truly at the top of the channel.

I think I've been waiting for a fall to trade and this has caused me avoid looking for long opportunities. I'll try and have a more neutral thinking - it's always a shame when the market has a good move and you miss out on it!

12/04/2007

10:00

The SPI moved back under the upper trend line during the night session.

Prices are working their way lower - but not in a hurry @6169.

I think I'll wait to see where this decline ends and what any subsequent rally looks like before deciding the direction of a potential trade.

This is where we stand at the moment.

Prices came back and found support on the upper trend line.

We will see how this holds during the night session.

11/04/2007

10:39

Prices breached the upper trend line toward yesterdays close and made further progress during the night session.

We're coming off the highs at the moment and the SPI is just moving back into the consolidation zone.

I'm waiting to see how things develop.

After the 4 day Easter weekend, the mood seems positive with prices remaining at the top of the current consolidation zone/channel.

Not much action today with the Easter 4 day weekend upon us.

We will have to see what next week brings, on Tuesday.

We came off the highs during the night session - Wall Street was 'mildly' positive.

These longer term hourly charts are too big to display on this page, so I've put the latest chart here. I suggest viewing them 'full screen' or 'right-click' the image and 'Save As' to view them in another program. Some browsers try to scale the image down and wreck the quality (the lines appear dashed).

One obvious thing I could do is change the time frame to daily, but in doing this I'd loose the current channel because the daily highs and lows don't indicate this longer term channel quite as well.

I get the feeling that there may be some profit taking today, but I wouldn't trade off that thought alone.

Whilst the bottom of the channel is some way below and a drop to there could be a good trade if it happened, I think I'll be more cautious and wait for a good longer term signal.

Hopefully, looking at this longer term channel, I will not be caught out again.

We ended the session at the top of the 'new' consolidation zone, shown on the previous chart - having peaked above it a few times today.

I think I'll see the nature of the next decline to help decide on the next possible trade.

The SPI rallied further overnight with a positive Wall Street. The interest rate decision, out this morning, will probably impact things as did the anticipation yesterday.

As mentioned in last post, there is a larger consolidation zone at play - there's a 'zoomed out' chart of the hourly SPI chart here.

As I've said before, break outs of larger consolidation zones usually lead to larger moves and as I'm trying to keep a longer term view, this is probably the consolidation zone to watch - the previous ones where within this.

Well and truly stopped out on that one.

The current trading strategy is entering the trades ok, they are going into profit, but are being stopped out by the market action which is caught in larger consolidation zones.

With Wall Street firm overnight, the SPI rallied as expected.

It will be local news that dominates today, with an interest rate decision to be announced.

Of course, it will be the reaction to the announcement that drives the market rather than the decision itself.

The SPI moved down convincingly during the session, closing @5959 with a low of around 5942.

I'm expecting a small rally from here, which should hopefully hold 6000, before weakening further.

If and when prices do rally and weaken further, I'll move my stop down accordingly.

With the consolidation zone well and truly broken to the downside, I sold @5991.

I was debating whether to hold on for more of a rally, but with a longer term view and a reasonable stop, currently @6034, I decided to make the trade.