The
market has found resistance at an important price vibration
of 1377 being a repeating range of 3 of the last 4 up runs.
We need to be careful how we react to this price vibration and not simply assume that the market will change trend from this top.
Position,
pattern and volatility are still not yet confirming a move to the short
side.
As
a result the trend is still considered long with an open mind to any move the market makes to the short side.
Manage
our open long positions with stops under the last swing bottom at 1350.
New
trades are optional however there are no obvious swing entries available today.
Aggressive
traders could consider a change in trend to have occurred once the 1354 or slightly less agressive 1350 swing bottoms are broken.
But the safer short entry as always stated by
Gann is once a lower swing top and bottom has been made. We will
discuss this in the event the market moves to the short side.
Concluding that the trend is long and only long trades should be considered with stops at 1349
Gann
Analysis Consideration – Time, Price, Position, Pattern and
Volatility.
Time
The
swing top on the 29th
February is:-
180
solar degrees from 31st
August 2011
225
solar degrees from 17th
July 2011
Price
The
current swing top of 1377 is at the
175%
level of the March 2011 up run.
225%
level of the June 2011 up run.
150%
level of the August 2011 up run.
This
price vibration keeps us alert for the possibility of a change in
trend off the 1377 top.
Being
that 3 of the past 4 ranges are within the vibration this could
easily be a top. Having said that it remains to be seen as to
whether the market can push through to the next price level.
Position
The
market is showing further strength by exceeding 100% of the previous
run and also surpassing the double top level of May 2nd
2011.
Pattern
The
daily swing chart continues to make choppy irregular swings. Overall
the pattern is higher swing tops and bottoms. Again we have no
indication of any change in trend at the moment.
Volatility/Volume
The
volume has continued at the lower levels. This can be an indication
that a trend change is imminent. But we cannot read to far into low
volume. We would prefer to see volume increase on the top of any run
which would conclude that selling is absorbing all the buyers
Summary
Trend
Direction
Daily
Trend:-
No
change to our last report - The daily trend remains long at this
point. We need to remain alert to any move to the downside. At this
stage though we do not have any signals from the market that the
trend is in the process of changing.
Continue
to trade long with the trend.
Trade
Management
Open
Trades:- Stop Loss positioned below previous swing bottom at 1349
(conservative)
New
Positions:- No new positions are available to be taken under swing
trade entry rules. We will need to wait for the market to retrace as
part of a swing to take a mechanical entry as Gann instructed.
Trend
Reversal
Aggressive
trading would consider a change in trend once the swing bottom is
broken at 1348. All long positions would be stopped out and closed
at this level and new short positions could be opened at the same
point. Stop loss for short positions would also be placed at 1378.
Elliott
Wave Analysis
From
and Elliott Wave perspective we see the market structure unfolding as
follow:
In
our last report the main concern relating to the Wave 2 Primary is
that it has exceeded the origin of Wave 1. An alternate count is
now been considered which will include a bullish outcome. We will
discuss the alternate count in the next report.
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