Monday, January 17, 2011

Top40 end of the week chart


Second week of trading in 2011 was very nice, especially sessions on Tuesday and Wednesday. After four days of weakness market bounced nicely and on Wednesday J200 broke year to date high, making one more on Thursday. Finally, on Friday J200 showed weakness in the first part of the day, but bounced strongly towards the end of the day, with ALSI futures making fresh year to date high after cash market closed.

Currently J200 is trading above all major moving averages - 10, 20 and 50 and, so far, trend is very much intact. Close on Friday was at 29226 and that is 2167 points or 7.4% away from all time high at 31393. I’m of the firm belief that we are going to see new all time high and most probably that is going to happen sooner rather than later, as too much free money around the world is looking for home and emerging markets are favourite number 1.

Having said in mind, I just want to point that chart is showing some serious negative divergences on RSI and MACD. Negative divergences are not selling signal by itself, but triple negative (or positive) divergence could be a warning signal. One trend line is around 28500 together with 50 ema and the second one is way down around 25000. If/when those negative divergences play out market will correct very sharply and strongly. If one holds long term position, good place to close is close below 50 ema, but be ready to jump in long again quickly. Dow theory short will be close below 28194.

At the end, just want to conclude by adding that I don’t think this bull market is in any danger. For as long as interest rates in major countries are at zero or close to it, that is not going to change.

Trade with trend!

16 comments:

Anonymous said...

Hi Alsi-Trader.

Thanks for the constant updates.
Can you please let me know what software you are using for your day-trading?

Best regards

Alsi Trader said...

You are more then welcome.

For charting I use Metastock 10.1 wiht HISAT supplying datafeed.

For trading using OTS platform supplied by DWT brokeres (www.dwt.co.za)

OTS software is getting better every day and if one does not go crazy about indicators can be used for charting too

Anonymous said...

Thanks for the prompt reply :-)

Alsi Trader said...

You are welcome.

Tim Desbois said...

Hi Igor,
I am a broker/trader with SA Derivatives and I've been trading the Alsi for 13 years now.
I was wondering what your present brokerage rate is, and wonder if a R15,000 flat rate + R1 per contract would interest you? I am also offering a very large rebate for clients referred. Basically, If you did 150 buys and 150 sells per day, every day, you could save about R45,000 per month in brokerage. I think the break even (at R10 per trade) is about 38 buys and 38 sells per day
Please give me a shout on 082 588 7240 or 011 214 7234 to have a chat if you are keen, or know anyone that might be keen.
Chat soon.
Thank you.
Cheers,
Tim Desbois.
timd@sastockbrokers.co.za

Alsi Trader said...

Hi Tim thanks for your comment

I don't trade that often, only few times per day. Sometimes once sometimes 2-3 times but that is absolute maximum.

Looks like your option is for more frequent traders.

Thnak you

Tim Desbois said...

Hi Igor,

Thanks for the quick response.

I'm charging R6 per contract for the traders who trade less than 25 in and out per day, and we also utilise the OTS from estuary (Now called "Swordfish").
I'm still on MeteStock 8...love it...I never got into writing formulae in MQ4 or easy language. MetaStock, best charting, I still believe.
Please give me a call on 082 588 7240 or drop me a mail at timd@sastockbrokers.co.za so we could chat further.

Thank you.

Cheers,

Tim Desbois.

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