As
we enter Tuesdays trading we are close to breaking important
resistance and confirming a change in trend. We also have to take
into consideration the contract change over period. The continuous
chart records the highest volume bar from either the March or June
contract. With volume now clearly in June how can we interpret this?
With
volume clearly now in the June contract we need to watch the daily
bar ranges from this contract. At the time of writing, Tuesdays bar
top on the June contract is only 1375 which is still under the
important resistance and swing top of 1377. For the market to be
confirmed as a long trend we need to see the 1377 broken. Until that
occurs the only trend confirmation in play in short. We are in a
difficult position being so close to a break of trend but until that
occurs we only consider short entries.
Another
concern at this time of contract change over is the volume. In
general we are able to read the volume and make a determination as to
where buying and selling is coming into the market. Again with
traders being forced out of one contract into another we simply have
no way of telling where traders are positioning themselves.
The
Gann Analysis below has not changed from 11th March 2012
however we have made some additional notes which I encourage you to
read through.
Gann
Analysis Consideration – Time, Price, Position, Pattern and
Volatility.
Time
The
swing bottom on the 6th
March is:-
90
solar degrees from 8thDecember
2011 top.
225
solar degrees from 23rd
July 2011 top.
Price
The
current swing bottom of 1338 is at the
50%
level of the December 2011 down run.
This
price vibration keeps us alert for the possibility of a change in
trend off the 1338 bottom.
Position
The
market has made a strong impulse wave from December 19th
to the 29th February top. This is clearly an impulse and
any move to the short side would likely be a corrective wave and
pattern. Being the case we expect to see a possible ABC pattern.
The
market is also supported by the 50% pressure point of the previous
run on the 6th March. The market has since moved up 4
trading days which shows strength within the swing. The question
remains and is difficult to determine as to is there another final
push to the short side. Even if we conclude that there is – will
it be a worthwhile trade considering the expectation of only a minor
wave correction. A risk that may not be worth taking.
Pattern
The
daily swing charts is confirmed short, however we now have 4 very
strong up bars which are a very bullish signal.
Volatility/Volume
The
volume has has certainly increased on the 6th
March. This increased volume on a down bar is a very strong bullish
signal usually seen at points in trend change.
The
increased volume on recent days is now difficult to determine as a
result of the contract change over period
Summary
Trend
Direction
Daily
Trend:-
The
daily swing chart is confirmed as short. Technically speaking the
swings are to the short side however the bullish up bars of the last
3 days certainly keep us on alert to a bullish run commencing.
Trend
Reversal
1378
is the trend reversal point and if the market pushes through this
level only long trades should be considered.
Elliott
Wave Analysis
From
and Elliott Wave perspective we see the market structure unfolding as
follow:
It
is more than likely we just saw a minor wave 4 correction being
50% of minor wave 2. The alternate count would be for a more defined
ABC short pattern which would suggest a further move to the down side
which is in keeping with the markets confirmed short trend. This is the difficulty with trading Elliott Wave alone, we are unable to foresee the next move.
