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I am a young invester/Trader, i mostly focus on Short term or Intra day trading on the equities or Forex markets. I have recently completed my Bachelor of Commerce double major in Finance and Property. I have also completed my RG146 in securities and Financial planning and while trading is a passion my desire is to work within the stockbroking industry or as a trader for an investment bank. This blog I have set up to help share ideas to others on trades and tips i have picked up from my time in the market. I hope you enjoy my blog and some of my ideas :)

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This blog i have designed for a bit of fun, education and sharing of my thoughts in regards to trading the ASX or general equities trading and also FOREX trading. I am no expert and nothing on this blog should be taken as financial advice, it is merely just a tool for myself to share any trading thoughts i have and for people to enjoy reading :)

Saturday, July 3, 2010

July Market Analysis

Well i am finished up with my FX classes so spent a big chunk of my Saturday doing some serious market analysis so here it what i have produced using a few various methods and what i am generally seeing...

For the month of July we are assuming that we could form a bottom around the middle of July, Especially looking at the dates of the 10 – 14th of July or the 16th/19th of July. I am expecting this month to be a doji looking candle on the index with maybe a short rally at the start of this week (5th of July)

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The IG cash range for the monthly chart is currently 798 with a weekly range of 408. Basically what I can take from this is that for the month if we are down and have already made a top for the month of July we will be taken down around 9212 (75%) of the monthly range. I however doubt that a top has been put in for the month of July and think a real assessment of a down side target will be better done after this coming week (or after a convincing rally) At present the Daily indicators are in the oversold position.

Another interesting thing to point out with the DOW is that of the entire move up from march we have yet to make a fib of this rise. I would be expecting a 50% which is around 8900 or a 38.2% which is around 9400... 9400 is covered over next few paragraphs.
Friday’s candle did break the highs on the IG cash (NFP Volatility) but the DJIA chart has yet to break a high yet to confirm that the trend could possibly change to the upside. Any longs from here are purely bottom picking and for the low risk traders among us it is not recommended. I however am expecting a rally hopefully from Tuesday when the US markets open again from their July 4th Long weekend.


I am expecting a retest of the key 10,000 level and have actually worked out my monthly ranges from here as well which actually takes us down to the support levels of 9400 And this is where I expect that the mid July lows could be confirmed and a real relief rally could emerge from. Should the market not have the strength to retest this level or reclaim it then I would expect much more downside to emerge as the market continues its trend down. 9000 Should also prove to be a key support level but we will cross that bridge should it come closer.

Should all this fail and we retest 10,000 and we play out based on the head and shoulders pattern that has emerged we could see the market fall down to levels around 8800...

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XJO
For the Australian market I have been updating my day and point count chart for some time. Basically it took us 31days to rally 397 points and only 11 days to evaporate 408 pts and all the gains the rally gave us.

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That rally reached just over the 4600 50% fib of the drop level and reversed Should we take a fib extension on this number using a 150% fib of the move (as retraced 50% so extend to 150%) this takes us down to 3750 another key support level. If I extend the first range down this also puts us roughly around the Middle of July Turn date. I have also included the 138.2% fib which is the 3850 level. I Also would watch 4000 as this level should prove to be a tough level to break and should be around here coming into the turn date or at (4122 on the SPI into turn date) I would look to take P1 here and P2 on the first higher swing bottom made in the market and add P3 once this position has been confirmed.

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Moving closer to the IG index and on more of a short term time frame I would be expecting some sort of rally this week and likely a retest of the 21EMA which has been containing price. The index simple MA’s have given the death cross and certainly does not weigh to strongly for the case of the bulls. However a small rally should be expected soon.

Again the weekly range for IG XJO cash is 205 and this could take us down to around that 4000 support should we run down from where we are. However I think we might have a difficult ‘choppy’ week while the light volumes in the US give little direction and the market works out what way it wants to go.

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