Aus 200 cfd analysis

[OutofWork66]

Hi All,

Since I’m “Out of Work” and I live in Australia and I like to keep myself busy, I thought that I’ll start a thread on the AUS200. I performed a search and I couldn’t find any threads on this instrument, so why not ?

In the Asian session this instrument is rather volatile straight from the open which is good for day trading. Liquidity appears to be good during the Sydney session, being a CFD it is a synthetic instrument of the underlying SPI futures contract or AP as it is known on the Sydney Futures Exchange.

Now this may get confusing as the AUS200 tracks the APY00, ( SFE SPI 200 INDEX CASH ) but is assigned a different point value on the various CFD brokers platforms.

I don’t know the actual logistics of why this is the case as I’m just interested in chart patterns so it doesn’t matter to me.
The Instrument trades between 9.50am-4.30pm Sydney time. Then 5.10pm-7.00am Sydney time for the overnight session. The market operates Mon-Fri.

The spread on the AUS200 is 1 point on my brokers platform for the day session and then opens up to 4 points in the afternoon session.

The afternoon session looks illiquid to me for most part of Euro session before getting a bit more volatile during Nyork and because of this and since I am more of a short term trader I prefer to exit all positions before the close of the day session. Swing traders may hold positions overnight but It is advised to lengthen your stops to account for the wider spread. A holding fee is also payable for those whom hold positions overnight. My broker charges -6.6 points swap long and -1.31 swap short with 3 day swap fees payable on Mondays.

As I have only recently got back in to trading after a small break I’ll be discussing the charts, analysis and positions on a demo MT4 platform. My analysis and thoughts about the instrument will be discussed in both real time and in hindsight depending on my availability.

Everyone is welcome to join in with your thoughts, however please keep the thread clean of sarcasm and slander. I’m here to help, learn and have fun with the markets firstly. If you trade and lose money on any ideas found in this thread I don’t accept responsibility the onus will be on the individual.

I will try and keep this thread active daily but there are days that I won’t be able to due to other duties or commitments I have.

Let’s begin:

I always begin my analysis with the highest time frame available on my charting platform. Below is the monthly chart of the AUS200. It is important to understand your instruments health before you begin to trade it. As you can see 2007 was the all time high for Australian equities. Price is slowly trying to get back there and has reached the .786 retracement level of that entire 2007-2008 high to low.

I like to use my version of Ichimoku for analysis and trading, here you can see price is currently above the cloud so the long term health of the instrument is positive and on the improve. Note the .786 retracement has created a road block for price. If price is able to close above this level at some time in the future the likely hood then is that price will be looking to re visit the all time highs of 2007.

[OutofWork66]

Next up I’m going to discuss the weekly chart. The weekly chart shows a closer inspection of price over the past 4 years. Note price is travelling inside an uptrend channel that is over 2 years old. Price however is in a corrective state. Since the beginning of 2018 price has pulled back of its highs but did find support early April with a 3rd touch and bounce off the bottom of the trend channel. Price has also entered the cloud and is under its median price averages. This indicates weakness and the early year correction is far from over. Chart below:

[OutofWork66]

Moving on I’m going to discuss the daily chart. The below daily chart is showing about 8 months of data. Notice each time frame is condensing the big picture into easier to interpret segments. Price is currently in a strong correction on the daily chart indicative by it being under the cloud and steepening down trend lines. Notice that price is actually consolidating in a wedge. When you notice that the price pattern is contracting like this chart illustrates you don’t want to enter long term positions because the boundaries will contain price until it breaks out of there. Also note the strong support / demand area below in yellow, it may also draw price towards it once again. Each time a major support level is touched the weaker it becomes.The extended grey cloud to the right of the chart indicates that these conditions are likely to persist for the next few weeks at least. Chart below.

[OutofWork66]

This morning the AUS200 market has opened. Below I will discuss the 4 hour chart. While price is holding above the cloud and inside the uptrend channel it has a bullish bias in the short term. The .618 fib of the past 5 weeks high-low has put a ceiling on price gains and is acting as resistance to a move higher. The 4 hour time frame chart displays price action over the previous 6 weeks. It is the main time frame used to look for swing trade opportunities that may last for anywhere from a week to a month. All the lines on this chart are going to be barriers for price. As such swing trade position entries are not advisable at this stage.
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Below is the 30 minute live chart, this chart displays current price action over the past 3-4 days. Like the above chart, price is above cloud and there is a mild bullish bias. However the purple trend lines highlight how price is contained within a 30 point range. The sideways price pattern is indicative of consolidation and contracting price action. You can not initiate trades from within this range unless you have small targets in mind which would be the upper and lower lines. It is better still to wait for price to reach these levels and then look for trading opportunities in an even smaller time frame. This will be discussed later.

And below we have the live 5 minute chart. The day traders and scalpers special. This is what they are all looking at and waiting for a break up for a move to the target above or a break below the yellow support line looking for the target below. Target above is small, this is a scalp move if price goes for it.

And less then 15 minutes later, target attained for about a 5 point return.

End of day price review. The below 5 minute charts contains all the price action of today’s Sydney session. This is where we can look back at price in hindsight and see how the day played out. What trades setup?, where they went ?, opportunities taken or missed. I prefer to study the price action of the past session instead of back testing. I get a better understanding of the market I’m trading this way. The price action of the session was of choppy consolidation, high to low was a 16 point range. A slight bullish bias was the tone early in the day with the market selling off in to the close.
Market open 5857.5, low 5849.5, high 5865.6, close 5857.1. Net loss of -0.4 for the session.

Wednesday afternoon session rallied higher and peaked where price met the down trend line. This morning ( Thursday ) price has opened gap up. Chart below.

The 4 hour chart continues to go higher inside the up trend channel. Price has now met with the .786 fib retracement, this level will be resistance to price. chart below

The 30 minute chart displayed below is the same chart I uploaded from yesterday, no lines have been altered. The same support and resistance levels are still there. For those who trade the afternoon session, you will notice that once price broke out of the wedge, I have put a green arrow under it. price rallied all the way to the next 4 hour fib which I have highlighted the level as .786. This is a good swing trade. It followed basic principles like a break out from consolidation and the target is always going to be next resistance, I like to use higher time frames for this value and the 4 hour fib was an obvious choice. It is a hindsight trade but for all looking how to trade this is a good example. This is how I like to seek trades out. Right now price is rejecting this price level and possibly creating a 5 minute chart trade, will look at that later.

Live on the 5 minute chart below, very interesting. Price is in a small uptrend channel after gapping up on the open and giving up its gains. It will either break back above the channel and make another go for the .786 fib which will be a buy trade opportunity or it will fall back to the low of the channel.

Market indecisive, unemployment numbers out in 35 minutes. Long trade peaked at 7 points but .786 fib not retested. Market has put in a lower high. While price holds above support long is still favourable. If support breaks the bottom of the channel will be tested.

End of day price review. The below 5 minute charts contains all the price action of Thursday’s Sydney session. I have labelled the chart with possible entries and exit signals. These are trade opportunities that I see on a 5 min chart.
Market Open 5898 High 5905.9 Low 5867.2 Close 5871. Net loss of 17 points for the session.

[OutofWork66]

Friday 20 April 2018.

The Thursday daily candle has closed bearish back to the down trend line.Chart below.

The 4 hour chart closed below the uptrend channel during Thursday’s session. Price is currently trying to recover from its correction and re enter the channel, however it has resistance close by in the form of TS/KS the red and blue median price averages.

The 30 minute chart below displays price action for the entire week. Price broke below the up trend channel during Thursday’s session. It is currently bearish being under the 30 minute cloud. Price is also currently at the support/resistance line which has been important all week. I have labelled the chart with possible entries during the past couple of sessions.

The 5 minute charts shows price is bullish being above the cloud but is below the daily pivot point and is also inside a wedge. Look for price to defeat those obstacles for a rally. Long trades would be initiated with a break above and Short trades with a break below the wedge and cloud… I’ll be back to discuss the market end of day price review with possible trade setups and exits after the close.

End of day price review. The below 5 minute charts contains all the price action of Friday’s Sydney session. I have labelled the chart with possible entries and exit signals. These are trade opportunities that I see on a 5 min chart.
Market Open 5863.5 High 5886.7 Low 5861.5 Close 5866.2. Net gain of 2.7 points for the session.

[OutofWork66]

Week 17. End of Week 16, the AUS200 made a push higher with a higher weekly close 5851.3. A gain of 23 points over the previous week. Price met resistance at the tenkan sen ( red line ), which stopped the rally. Price has put forward 3 consecutive bullish weeks which began when price met 3rd touch at the upwards trend line which is also close to a long term horizontal support level. Price is still trying to recover from a short term correction that commenced at the beginning of 2018. Price will enter a bullish cloud this week indicating consolidation will continue… Long term technical entries are not advisable in this current state. Chart below.

The Daily chart below is in bear territory, While price holds above the nearby monthly pivot point there is still a mild bullish bias, a close below that would enhance the probability of price revisiting the yellow support area towards 5700.

The 4 hour chart below shows price contracting and consolidating inside a narrowing wedge. Price is also under a long term down trend line dating back to 27 feb. Last week price tested and rejected the .786 fib value of the previous 4 1/2 week high-low swing. While price holds above the bullish cloud there is a mild bullish bias in this time frame. If price enters the cloud this is indicative of continuous consolidation. 4 hour chart plays are not advisable until price either closes above and beyond the contracting wedge and .786 fib or alternatively closes below the bear side of the cloud. These 2 scenarios would enhance the probability for price to retest the swing high or swing low visible on the chart.

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The 30 minute chart below displays the past 4 days of price. Note price transitioned from Bull to Bear on Thursday during the Euro session. Price found short term support on a multi day up trend line late Friday Nyork session, however it is contained under a bear cloud and within a potentially new down trend channel. 30 minute swing trade longs would not be advisable until price clears the upside of the bear cloud and top of down trend channel. Alternatively 30 minute chart shorts would be considered with a close below the uptrend line and 30 minute bull candle, with a high probability of price visiting the yellow support level and continuing lower towards the bottom of the down trend channel.

Open market, looking like a AUS200 rally today. Gap up open on 5 minute chart, 30 minute chart break above down trend channel. Looking for a 20 point move. Have gone in long on demo. Chart below. This trade has been entered on 5 minute chart but is syncing up with 30 minute chart…Charts below.

Trade update at 12.52 AEST: Trade is in progress, I can now move my stop if I choose to a 5 minute swing low on the chart. I can also manage this trade on the 30 minute chart because they are aligned so it can be managed on the higher time frame. I’m experimenting with very wide stops and managing trades by letting them either get to their target or the price pattern changes. Right now all OK so nothing happens.

1.17 pm AEST: The 5 minute chart has put in a double top with MACD divergence. Exits adviseable at 5887. price has met down trend line on H4 and Daily chart. 30 min chart trade still open.

4.30pm AEST. At the close. The 30 minute chart trade is still open. It will carry forward through the Euro and Nyork session if it has too. The original target is still in place, the trade will be exited at a loss if the price pattern changes.
Chart below. Remember the trade was taken on a 5 minute chart, aligned with the 30 minute chart. I chose to manage the trade on a 30 minute chart, looking for a 20 point gain and an exit at nearby resistance. Current price chart below.

End of day price review on the 5 minute chart below displays the Monday day session and the trade signals that I see with entry’s and exits. Note the same signal that I entered the original trade with on the 5 minute chart would have been exited at 5887 for an 8 point gain if exclusively managed on this time frame. chart below.

Update 10.18pm AEST. NYork session underway, 30 min trade still open and sustained a 50% pull back to support level. In lieu of this target and stops have been ammended. Target is now previous high before pull back and stop is below the low of pull back in order to reduce risk. Will see the result tomorrow morning. Chart below.

[OutofWork66]

Tuesday 24 April.

I wake up to a winning trade. I did not know what would happen overnight so I managed trade best I could as described in my last post. It was prudent to lower my expectations and I did, because of the resistance that was created by price at that level on the 30 minute chart. It turned out that price did blow through, and my original target would have been attained but if I could not be there to watch price action, best to err on conservative expectations. The 4 hour and daily chart’s diagonal down trend resistance lines were posing the problem for price to overcome and when you have a few time frames lined up together like this trade had, M5,M30,H4 all above the cloud and with fresh momentum, the expectation is for price to defeat the resistance but still you can never know what will happen. Chart below.

Tuesday’s daily chart shows price has defeated 2 down trend lines and is now encountering a nearby resistance at the cloud level. Chart below.

The 4 hour chart shows price still travelling inside the contracting channel and has now encountered the .786 fib which stopped price from progressing further on its last attempt last week. This resistance must be respected. Note how price struggled to defeat the down trend line on Monday but once it did it is now using that same line as support. Chart below.

The 30 min live chart shows resistance at that 4 hour fib level holding. This is why my previous trade target was set and exited close to this level. You can not go long again until price breaks above the yellow line resistance. It is now looking like a counter trend market in the short term.Chart below.

Current intra day price on the 5 minute chart shows that while price is above the cloud it is still slightly bullish but a counter trend short signal has been given. Price stopped at the daily R1 pivot which as we know was also the .786 fib on the 4 hour chart. The bottom of the channel is likely to be tested and a break below will have short term selling bias in the market. Chart below.

1 hour to go before the close. The 30 min chart gave another buy signal when it broke and closed above the yellow resistance level and uptrend channel simultaneously. The target that has been attained not long ago, was the top of the 4 hour channel which was the next apparent resistance level. Charts below.

End of day price review on the 5 minute chart below displays the Tuesday Sydney session and the trade signals that I see with entry’s and exits. After a small counter trend move that began from the H4 .786 fib level, the market switched into rally mode for the entire day. For true trend believers just sticking with MACD, when the histogram turned positive after the AUD news release till the close paid good dividends, easier said than done!!
Market Open 5894.8, High 5929.1, Low 5886.1, Close 5923.4. A net gain of 28.6 for the session.Chart below.

Note: By studying price in an organised manner on your chosen instrument, and by reviewing the chart and placing signals where you believe are good entries and exits according to price structure, over and over again as I’m displaying will enormously help your trading. Apart from gaining a broader understanding of the market, price and its different time frames and how they are all relevant you will also gain confidence in your ability to find a winning trade. You will learn what to look for. You will be training your "reticular activating system " ( RAS see google ) and your beliefs in what works and what doesn’t will strengthen. Your conviction in your trading will develop and the fear will subside. This is what I’m doing as I believe when you are educating an onlooker you are educating yourself and it straightens up the way you look at and trade the market. It also helps keep that annoying alter ego at bay.

[OutofWork66]

Wednesday April 25

The market is closed this morning and will re open in the afternoon. The daily chart closed a very bearish pinbar after testing and rejecting the monthly R1 pivot point. Price closed under the cloud and gave away all of yesterdays gains. Chart below.

The 4 hour chart shows price could not sustain it’s rally and after briefly breaking out of the upwards channel came crashing back down to close out the day resting at the previously defeated down trend line. Price is still holding above the cloud and the uptrend on this chart is still intact but a long term entry is not advisable because even though this time frame looks like its a buy close to support level the higher time frame ( the daily chart ) is still bearish. Chart below.

The 30 minute chart displays the past few days of price action, trade signals, possible entries and exits. As previously discussed the market gave away all of its gains from Tuesday’s day session. Why is unimportant to me, just stick to trading the technicals and you will stay on track. Every move begins at an important price level, if not on the time frame you are trading on then it will correspond with a higher time frame level. This is why you should look at all time frames so you are not caught in any nasty surprise when the market reacts differently to your thinking. Right now the 30 minute time frame is a bear, but price has found support inside the previous uptrend channel bottom trend line. As such there are no entries for a short or a long in this 30 minute time frame right now within the current chart pattern. A long will run into nearby resistance and a short has support very close by too. So with this in mind any trades initiated for either long or short would best be taken in a smaller time frame like the 5 minute while respecting the support and resistance levels illustrated on this chart below.

[OutofWork66]

Thursday 26 April:

The market has retraced 61.8% of Tuesday’s bearish pinbar and closed the daily candle near its highs at the close of Wednesday this morning. Price is inside the cloud and still under the influence of the down trend lines.Chart below.

The 4 hour chart displays price still travelling inside its upwards contracting channel. Flat tenkan sen and kijun sen highlight short term consolidation. Price retains a bullish bias on this chart. Chart below.

The 30 minute chart has been updated and cleaned up for easy viewing. The purple trend lines are long term dating back to 12 march ( res ) and 4 april ( sup ). Price has broken back above the cloud and if it can break and close above 5920 it will be a signal to go long with the target being the yellow resistance zone which is also Tuesday’s high and the top of the bearish pin. A move the other way will most probably result in a retest of the secondary trend line ( pink line ). That move would be better pursued in the smaller time frame as it will be the counter trend move and thus have lots of buyers opposing it. Chart below.

10.10am: Market open and after a gap up a bear candle closed, price comes back down to support. The 5 minute chart shows the story. Price gapped up to daily R1, rejected it and is now trying to decide what to do. A nice candle pattern above the purple down trend line would be a signal to go long and a break below the cloud would be a signal to go short. Chart below.

10.51. Long signal has been given on 5 minute chart, messy consolidation at the moment target will be the H4 resistance line as shown above. If price comes back down and closes blow the last swing low the trade is wrong.

1.10pm Update: Trade was successful, plus 10 point gain. Chart below.

4.30pm: At the close. I’ll begin with the 4H chart. Price rallied towards the top of the channel and was unable to break out. This provided a resistance level to exit out of intra day trades, and I did. Chart below.

The 30 minute chart, gave both long and short signals in today’s session. Both are still alive. I have highlighted the chart with future targets which will play out in the evening session, this will be the way out of the trades if they were taken. Either in profit, loss or break even depending on which side your on. Chart below.

And lastly the 5 minute chart of today’s price action. Trade signals, entries and exits are highlighted. Market rallied, couldn’t defeat the H4 resistance, sold off, went to sleep mid session before recovering at the close. Market Open 5929.6, High 5939, Low 5900.3, Close 5911.4. Net loss -18.2 points. Chart below.

[OutofWork66]

Friday 28 April: Firstly I’ll recap on yesterdays 30 min chart signals. The long signal played out successfully with both the modified smaller target and original targets attained in the Nyork session. The counter trend short signal could have been exited at support when a cluster of candles were unable to break through, alternatively if one was holding for the pink trend line the trade could have been exited at break even. This trade example highlights the fact that you can have two players with opposing views on the market taking opposing positions and both being profitable. Chart below.

The daily chart today is very interesting. Price has broken out of the cloud, has defeated the bearish pin of Tuesday and has given of a long buy signal. Now this is not to say price is going straight to its targets but probability suggests that price will get to the targets before it gets to its stop loss. Even though there are still opposing diagonal down trend lines visible the fact is that the long term trend of this instrument is bullish on both weekly and Monthly time frames. We anticipate that it will defeat them. This trade may take months to play out and like the trades I have displayed on the 30 min chart will also most likely go through a draw down period. Chart below.

The 4 hour chart has broken out of its upwards channel and is now re testing it for support. Chart below.

I have cleaned up the 30 minute chart for easy viewing. Basically main lines have not changed. Even though a counter trend move is underway, price is at an important support level as you can see. I fancy longs on the 5 minute chart from here if level holds. Chart below.

Live Market. The 5 minute chart is consolidating around support BUT is below the cloud which means it has a bearish bias in the short term. A break below support level will mean the diagonal uptrend line will most likely be tested. Chart below.

This is a bad idea but in the interest of science I have taken a short with a leap of faith straight into a strong H4 support level. Lets see how i get out of this mistake.Chart below.

11.30 update.

11.55 update. Target attained. Chart below.

4.41 pm At the close. Market price action for Friday’s session with my added commentary visible on chart below.

[OutofWork66]

Due to the lack of Interest in my topic of discussion, it will not be continued any further. I hope some of you find valuable information inside of this topic to improve your trading. Thank you.