A good Monday to all of you out there.
Wow, US futures gapped up on opening today. The Dow is now trading +60 in premarket. Take note that there will be a banking holiday for some major market such as the US, Germany, French and Switzerland.
Alright the Indexes closed slightly negative last Friday with the Dow closing down -75 points and the S&P closing down -3 points.
It is possible that the buyers are going to try and push this back up to the 30s-40s level and test the 20ema, but a lot of it will depend on the numbers coming up including the unemployment rate so be on the watch out for that. the 20ema now stands at 1336 so that should provide some intermediate resistance should the market reach that level.
Alright lets have a look at our local market. If you have not read our weekly update, you can click here.
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FKLI
Cash Index
Alright.. looks like we are going to have a bullish start today with the US futures gaping up?
Generally, if you are short through the weekend and you see a gap up on a Monday, it would naturally make you nervous. With the addition of banking holiday for some of the major economy, I think this would give an opportunity for the buyers to push this up.
I still see some resistance overhead with the 20ema standing at 1555 for now. Should the buyers really push this up this week, I'm looking at a maximum of 65-70 level. Otherwise, I think the 55-60 should do its job to halt price going back up so quickly.
The general belief for a long weekend holiday is that the next three days after the holiday starting Tuesday is generally a bit more bearish. How much of this myth is true, I don't know as it has not been proven statistically yet. However, we will not go wrong following price action.
Both the FKLI and the Cash index are trading above the 200ema so we will see if the buyers will want to continue to push this up or not to test the 20ema. The 20ema for the Cash index stand at 1560.
Trade your levels carefully. I'm looking to see if resistance can hold and maybe take a small short scalp. Otherwise, I might just trade with the trend.
FKLI
Upper Resistance: 1550, 1554, 1558, 1560, 1563
Lower Support: 1542, 1538, 1534, 1531
Cash Index
Upper Resistance: 1552, 1556, 1560, 1565
Lower Support: 1546, 1541, 1537, 1534
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