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1. The CAC is still firmly in the hands of bulls as it operates above the VWMA. The bullish sentiment is likely to attract momentum buyers and the second target of the W bottom short squeeze trade has yet to be achieved. All these factors favour a second day play in the direction of the prior day's price action.
Two scenarios are likely to play out
a) failed to close the cash session gap and it explodes to the upside (gap and go)
b) test the value area of the prior day and got a rejection there (open test and drive)
As it moves into the 5050 area, where plenty of trapped volume, overhead supply would get more and more difficult for CAC to digest and move through.
2. DAX has been testing the overhead supply around 11400 several times already. Once that is cleared, then there is the pressure from 11500. Many trapped volumes as road blocks ahead. It would take time to digest (corrections) in order to power them through.
CAC was making staircase lower the whole morning. It has backed at the trend line support + weekly VPOC at 4982.
If this trend line being taken out, the bears would be back in charge.
1. Dow has broken out of its bull flag formation. The best entry is at 25280. However, I have missed it due to my meditation session. I am missing trades here and there. It just bothered me a lot. The selling climax in DAX i have missed as well because I was in lunch. Really pissed off by myself! The self maintenance shit are taking up too much time. But on the other hand, this type of move usually occur during the main London session. But now there is fewer and fewer volatility in the main session.
2. Among the big four indices, Russell has the prettiest chart to me.
It has tested the VPOC of two weeks ago and it is ready to take a stab at 1535 key resistance again. We will see whether it would be a successful break out or another failure.
The US equity has had a failed break out yesterday, this might result in a break down today.
I have come into the session with neutral bias, because the market is supposed to be ranging in the anticipation of the G20 summit. But if there is a down side break, then we should just catch it. Now the major support of 4985 has been broken in Cac. So long as the price is kept below that level, we should press on short.
But if it is able to trade back above, then a spring might come into shape. Keep your mind flexible and be like water.
Just trade from zone to zone, don't chase price.
Russell had a failed run at the 1535 major resistance zone.
This morning, it has backed at the 1519 support to buyer again.
Let us see which way it is going to break out today.
If a break out of 1535 is successful, then a big upside space has been opened up.
The weekly low has been made on Wednesday and weekly high on Thursday. The base of the day today is for the market maker to manufacture a close somewhere in the middle for the option expiry.
1. Cac has its value placed squarely above last week's value, and the whole week's price action was able to be kept above the 5 day rolling VWAP. Friday's bearish price action was merely to build a bull flag formation. Looking back, we now understand that these are the preparation for the big rally on Monday. The news of the G20 truce between US and China is merely an excuse the market maker is ready to use to mark up the price significantly in the next few days. The last few days, the market maker has been adjusting their inventory to prepare for the next move technically. As the saying goes, what's driving the market is always the market positioning, trade inventory and sentiment. The news is merely a catalyst.
2. The Russell has broken the 1535 major resistance at last Friday's close. It has triggered a big inverse head shoulder's pattern and pattern fulfillment target is going to sent Russell back above 1600. Russell has been the most technical mover since the October break down. i am going to put Russell at the top of my priority list for trading .
Start of this morning EU equity futures and bund future are not inversely correlated, as it usually happens. Is this due just to the fact that their futures are soon expiring at different dates?
