Dow Jones: 3 small bodied candles signify hesitation of the bulls. DJ resistance stands at 12,760 thereabouts for now. If it pulls back, i will be watching for a test on the 20SMA. MFI also trades at resistance. Once again, despite a bad non-farm pay roll data, DJ refuse to head lower. Normally this would mean the market may not head lower in the near term. But i'm giving more significance to the resistance levels thinking there is no incentive for the market to head higher. Also there is a bradley turn date on the 7th Apr.
STI: There's a gap to be filled for STI. Currently it has traded above the resistance level. The last few candles could be a bull trap if market falls back into the range-trade. MFI shows a similar level when the index traded at this level.
As indices are trading near resistance, I want to short at the next turn down. 2 things can happen. If i am right, the market may retest the lower range and my shorts make me money. If I am wrong, the stop loss is near and I cut my losses short and wait to long. The study of the retracement is very important as well because, there is a difference between a normal retracement and jumping off the cliff kind of actions.
DISCLAIMER: This is not an inducement to buy or sell. You should do your own analysis on top of my postings.
