Greedy global vandals shall render those geographical boundaries meaningless! Who ever thought that. I for one never.
I wanted to write further on configuration developing right now as we see a rally yesterday. This was quite evident from close of composite day before yesterday. Once it had taken out 1822 area after bouncing off the 200 days MA, historical evidence clearly indicated that whenever this bounce has come off 200 ma we have rarely seen it turning back from 20 ma. It had happened once but that was just before this big run of composite to 1891 or 1918 intraday. .
I am now trying to interpolate the global indexes on to situation in US, the arguments are old but conclusions will be new. First as we all know this selling was result of apprehensions on strength of corporate US profits in face of second round of aggressive selling. Now if there has to be a genuine rally I would like to see the 'root of evil' i.e. macro-economic distortions in ASEA to be reasonably contained. I am very satisfied with RTC type approach of Japanese, I am also looking at the merger of Dai Chi kango and hoping that Japanese may finally see the grave threat to global institutions if they keep dragging their feet. The domino falls if Yen breaks 149-151 mark, Chinese devaluation take the steam out of developing economies the first victims shall be ASEA but Latin America and Russian economies will not be far behind. I do some time think that over capacity may be the reason behind these economic tremors in ASEA, but if Japan opens up it is going to be one hell of a job to raise the standard of living of richest nation on the earth.
Now this preamble to my market strategy takes me to my conclusion, if I assume that every thing is going to be all right with Japanese strategists I can also safely assume that the first sign of strength should be seen in HSI. I see that turn around very clearly right now we are at 8607 I see that 20 days was at 8296=8300 area, that is today taken out now the cue is that China action is seen as remote since Japanese indications are clear on cleaning the mess.
HIS will turnaround as specter of new wave of devaluation is discounted. We may see these oversold positions showing come back. I will not bombard you with lot of resistance and support but some I know will suffice, I would like this turnaround and break of overhead resistance in HSI to run, I will like that we should watch for a decline below HIS 8300 otherwise we go higher from here.
Nikkei needs to cross 15200. I will like Nikkei 15200 to be taken out if markets in ASEA improve. If Nikkei still show weakness we are in a problem until the package comes, I would like to assume that Nikkei may dilly dally but it will soon take out this 15200 very near to the 20 days ma.
I also see that Russian settlement was reached with IMF. China situation indirectly looks stable if you see that HSI the proxy of China is stabilizing. China and Russia although in capitalization terms are small markets but in terms of 'export potential' and political ramifications or crudely put 'nuisance value' we cannot ignore their importance.
I see if above in ASEA goes as per plan and any major pre-announcement does not hit the market we will be looking for a test of 9059 on DJIA if that is taken out old high of 9212 shall be tested.
On composite 1866 is the support, I will be careful if sanctity of this support is challenged on closing basis. 1891 and 1916 are the next objectives but anyway considering circumstances and inter linking I would like a keen eye on supports like composites '1866'.
DJ transportation looks promising here and will move up to 3472.
BKX, I prematurely rated BKX a buy and we saw some selling but it came back with vengeance. Looking at NASDAQ banks at 2090 I would think that this is rearing to go up from here. Technically it is about to bounce of 200 days ma. In a bull trend a successful test of 200 days MA is a positive sign.
The computer index is in a break out phase and I think that this will help tech overall.
Russell 2000 at 451 is trying to take out the 200 days MA, rather it is right now on it. It has strangest of configuration 200 days MA is at slightly higher level than 20 days. Yesterday it did take out the 20days when it crossed 451 but it now has to negotiate the next 200 days line. If I am reading it correctly a breakout here will certainly be explosive move up for composite and Rut.
My targets on OEX are 572 and SPX 1158-62 area SPU will be naturally higher, there is a slight refinement required here as I am in a hurry and do not have that slide rule to establish the right 1130 type of hit. I do see some visibility to 1176 but I would rather be satisfied with lower levels. On SPX my support is 1118 and SPU 1128, on OEX 524 is a solid support. Much as resistance are cheerfully taken out we need to be very careful with our 1866 and 524 supports also 1118 or 1128 support.
I will like to remind the traders that I only call for shorting when I see a trend developing. This is to avoid whipsaw. I try to work within my levels, it has rarely happened that I come up with a level intraday rather it is within overall configuration and I would request a keen observation how market behaves as various supports are taken out or resistance broken.
It is this global interconnectivity which I think is this threads 'forte'. This brings me every day here to dwell on global phenomenon. I enjoy every bit of it as I see the geographical boundaries vanishing slowly but steadily. Who ever thought that greed of vandals will give rise to a new unifying global force. Markets are breeding new bridges of understanding and love. Long live the markets. |
