TFEX SET 50 Futures (S50H11). Watch 666 and 656.

TFEX SET 50 futures front contract, S50H11 closes Monday at 662, and in doing so created a nice wide gap for future rapid descent activities and fun, and is left with a significant turning point for the week at 666 at the resistance end of the chart, and 655-656 on the support side.

We fear a rather inflationary number from Tuesday’s China CPI, which should push S50H11 back to 650 or so. We will be looking for an early bounce (hopefully) to nearer 666.60, from where a short with a VST cover target at 657 for a portion of the positions, with the view to hold until nearer 650 before taking additional profits. For such a trade a stop at 666.80 or even 671.20 should be considered.

To turn the contract bullish a daily close above 666 would help, but it needs to clear 672 to provide stronger confirmation the current rebound is anything more than a dead cat bounce.


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