Suspicious Of Big Market Moves At The Start Of The Month

The DAX is still in the grip of the bears, USDJPY is nearly at 100 and the DOW is approaching a pullback zone! Phew! Should we still be buying the DOW here? What about 100 on the YEN?

Very good evening to you traders. Well, we have a bit of action finally, on the markets. The first day of the month yesterday we saw a big old move in the DAX and today, we’ve seen a big… well, so far, a reasonably big move in the DOW. Actually, if you look at the DAX, we had a second day of follow through. We talked about this yesterday, the butchering and the close at lows and if the DOW didn’t do much, we’d get a bit more follow through. We did get a lot more follow through and goodness me, even the classical bear flag there, which later on even pushed lower, I mean, I wouldn’t have been surprised if people had took a long on this little wick and expect a little pull back up after this big long move, but even those guys were stopped out.

We’ve had a big move on the DAX from the start of the month, and I’m always weary of start of month moves, but we talked about this and these key levels that are holding and it’s done a little bit of damage to that daily chart but it’s still the weakest index out there when you compare it to the DOW and you compare it to the rest. So let’s look at the DOW.

The DOW is at that 20 period moving average, well it’s just underneath it now and we talked a few videos ago, about this being a buy level and I still think that it’s potential. I want to see what happens for the rest of the day. At the moment it’s right on those lows, we’ll look at a 15 minute chart. It’s sitting not far off the lows. It’s got to do a little bit of work to the upside rather than hanging around at lows. If it starts to close a little but higher off the lows, then maybe there’s a little bit of an opportunity there to take the long that I’d been planning for. If not, if it closes at lows, maybe there’s one more day to wait, of weakness, before diving in on the long side. But it’s at a key level, it’s a very interesting level. Actually, if you look at the SMP or Spider’s ETF, that’s had a pretty heavy day and the volume is pretty reasonable and the ATR is pretty reasonable. Again, it’s just coming back to that 20 period, I think it all depends on how we close tonight and how we open tomorrow morning. We may, if we look at the DAX and we look at them as a broad selection, a market between them, then the DAX may well do one more flush and we find a little bit of a bottom, but let’s see.

One more thing to look at, which is the big one that I’ve got my eye on massively is the USD/Yen. We are so close to that magic 100 level which the whole world is watching. We are down heavily today after two days ago a real heavy move, then a little bit of a nothing day, now another hammering. It does look like that 100 is on the cards. Will it be defended? We shall wait and see, but I will be watching that with intent. It’s like the classical pattern, if we break through it from an intraday perspective, there’s the 100 level, if we break through and start to hold below, then there’s going to be a    opportunity to short side for me. How it will trade at it, we don’t know. Will it bounce straight back off it? Is everyone expecting a bounce? It’s going to be tricky, but those are the three markets that I’m watching, haven’t much looked at the stocks because there’s so much opportunity going on in the currencies and the indices and I don’t want to spread myself too thin.

DOW, looking for maybe some sort of reversal today, then that might be the buying opportunity we are looking for, if it closes at lows, then I want to wait for one more day. Same with the DAX and I’m not really going to step in here, if we get a little bit more of a flush tomorrow, and then a mid day bounce, that might be opportunity to the upside, but let’s not forget if we bounce purely off that resistance level, we could quite easily drift lower. Of course, 10 000 is within sight, who knows. And the USD/Yen for me, it’s going to be a day trade only if we tag at that 100, I’m going to be watching that, have alarms set, probably for 25 ticks away and as it approaches it, see if there’s an opportunity there. We are in a bit of a classical down trend here, we have double spiked lower, it looks actually better on a daily, you can see if I draw a trend line here, we have tagged every single point and now we’re just moving lower and I guess if you were to extrapolate that, the classical chartists amongst you, we’re looking at 98 down here if that channel holds true. But of course, the 100 level is the big level that everyone’s watching so let’s see what happens. Take care.