Friday, May 8, 2009

The noises… Update for 08 May 09

There were noises that were getting to hammer my head and suddenly I find that the entire trend – atleast verbally is changing. A week earlier – everyone was shouting – we are out of the woods – buy on dips. Then suddenly the mood was not so buyout – some heads were saying – this may turn out to be a typical bear market rally… and here we are today – the markets were firm but ?? no one was saying any to enter the markets. Afraid? perhaps. Uncertain? perhaps – but now suddenly the noises are saying that there may be a downside not expected earlier. Whom to trust – atleast I do not know. Infact so much so that I do no longer trust myself too. Seeing the US markets – atleast there is an immediate danger of some downside – 10% or 15% or 50% I do not know and I will not try to crystal graze and tell you but the threat of downside looms large. In any case we will have to wait and see where we head to. And it seems that the wait is not likely to be very long.daily 07 May 09

The global cues are what took us to higher levels – along with the manipulations of course. You could distinctly see the counters being jacked up to keep the markets up. It is besides the point that after some time the metals gave phenomenal support to the index. Asia was on the seventh heaven – Nikkei opened after a gap of a few days and was up 4.55%, Hang Seng was up 2.28% in green and Strait Times was up 2.87%.Europe opened well but could sense the US and closed red. FTSE was up 0.05% and that is all. DAX and CAC were in red 1.57% and 0.97% respectively. US was awaiting the results of the Bank stress tests when a small controversy cropped up. It had spoiled the markets as it is and then was the Govt Bond auction drawing a bad response and have pulled the US markets down – Dow is now 1.58% in red, Nasdaq down 2.9% and S&P down 1.74%. Another about an hour plus for the US markets to close – likely to close red only.

On the candle sticks the candle was large and white. we are on the upper edge of the Bollinger band once again. The problem was that the volumes were poor. The ADX is bullish but loosing steam. MACD is bullish but over bought. RSI too is bullish but overbought. Slow Stochastic are with the %K line below the %D line and bearish and in overbought condition. The TRIX is looking down. So here we are.

Let us see the pivot data…Options pain 07 May 09

R3 3767 against 3826
R2 3739 against 3759
R1 3711 against3692
Pivot 3664 against 3650
S1 3636 against 3583
S2 3589 against 3541
S3 3561 against 3474
Projected High Range 3687 to 3725
Projected Low Range 3659 to 3621
Fib Projected High 3712
Fib Projected Low 3596

Put call ratio 07 May 09 I would have skipped the Options charts but thought that it may be interesting even though I am late like hell. Here you go..



Anonymous said...

Dear Mr.Cheema,

Waiting for your option class of this week sir.



Archana said...

Very forthright in your thoughts. Do take a look at my current Put option strategy and plz offer your comments.

S S Cheema said...

Veer: I am sorry the article turned out to be almost 2000 words and that is the reason I am generally on a very tight schedule.

Archana: Had gone through your article - I will go through it again in the night and definately leave my opinion.