Global Market Action: Analysis

[Soultrader 12]

Have been extremely busy lately and been a while since I posted. I thought I would share some of the things I watch for now. What has helped me alot is to increase my vision into the global markets. It gives me a clearer picture of the psychology behind global traders/investors.

 

Should of posted this premarket but wanted to share a few things. First, yesterdays global market action was extremely fascinating to watch in preparation of the US opening. I am actually quite bullish at the moment holding on to Nikkei contracts on the long side from the third week of March. We have had heavy accumulation at the double bottom (previous low from January) Hence, the past few days of sell-off I viewed as a pullback for higher prices.

 

Now going back to market action for April 1st, 2008. I want to first go back to March 17 – March 20 to take a look at a key piece of market information. There are various information which led me to initiate a long position on a more longer term timeframe. Lets begin with price action.

 

March 17 was the test of the previous low established in January. Up until this point, the markets had a tendency to lift on positive news and then followed through with further decline. However, March 18 and 19 was different. Markets lifted on March 18 on positive news and although the markets declined on the 19th, value area placement was overlapping to higher. This was extremely key information.

 

 

The above MP chart gave me confirmation on a technical level. Furthermore, after talking to many Japanese brokers during this time the hottest topic was JGB (Japanese Government Bonds 10 yr). Basically the public or dumb money was buying JGB’s which I used as a contrary indicator. At the same time my JGB system fired 2 short signals back to back. (based on price and volume)

 

 

Okay, lets take a look at the Nikkei and KOSPI from April 1st. Both markets were pretty rangebound but established overlapping to higher value placement. What was particularly interesting was the Nikkei price action for the evening session which went on to establish even higher value area.

 

 

 

The DAX followed through as well, testing the VAL from the previous day and then trending upwards for the remainder. Pretty positive global market action?

 

 

Now, lets take a look at the ES. I got home around 7am EST and noticed extremely key information on the premarket ES which alerted me of a possible trend day. Each attempt to move price higher was on an increase in volume or push through supply volume. This action hinted me that this was actual buying from the smart money to build a position. Hence, my long at premarket.