Morning Traders,
I hope everyone got well rested.
I woke up a few times last night to check on the US market and what a roller coaster ride it was. I went to bed quite early, but at that time, the market was down about 140+ points in the Dow. I woke up a second time to see the market down by 180+ points. In fact, it made a low of -191 points last night. I finally woke up again at 4 something only to find that Dow had reduced its losses to -6.66!
So now we have closed two days in a row as a doji, last night being a long legged doji. The break below yesterday's low and the sharp reversal would have caught many early sellers stuck short. The EU problems are not resolved yet as the Euro nations are preparing contingencies plan in case Greece decides to quit the single currency system.
Waiting for this kind of news kinds of reminds me of when the US was downgraded last year. Everyone was waiting for it and not sure if it will happen or not, and when it finally did, on a Saturday, the longs really got it bad. So we will have to see what will happen for the situation in Greece. Perhaps we will go back up towards the 20ema direction slowly, but this move seems very fragile and it seems like a small breeze would topple the move and reverse the direction. Don't you feel the same way? As of now, the Dow is down -35 points in premarket trading.
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What to expect in our local FKLI.
Geez.. it had not been easy to grind out profits for both the longs and the shorts position holders for the past two days. We have moved sideways and probably only scalpers were able to get the most out of this market. In the FKLI, we have closed below the 200ema yesterday. To establish a short position, we would need price to open at or below yesterday's closing as a confirmation that the trend might continue. Otherwise, it is possible that we might trade sideways and even chop back up again today.
Until we have a clear break out from this sideways range and more clear indication in the Euro zone crisis, I think we need to be cautious and reduce your trading size and take your profits quickly. Trade safe and here are your trading levels:
FKLI
Upper Resistance: 1534, 1537, 1540, 1545, 1548
Lower Support: 1527, 1524, 1520, 1517
Cash Index
Upper Resistance: 1547, 1550, 1553, 1556
Lower Support: 1535, 1530, 1527, 1524
Take care and I'll update if there are any urgent news on the wires!
Best Wishes,
Tech Trader
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