Tuesday, May 12, 2009

Red! Red! Update for 12 May 09

The colour of the markets have turned red after almost two complete months of run up. Now the moot question will be – where do the markets seek support and arrest the downfall. It will be important as that will signal in the real term – whether or not the recovery from the sustained bear market was real or we are still in the vicious cycle of bear hammering. However yesterday – even reliance – that had held on to its previous levels above 1900 cracked and was partly responsible for showing the way down.Daily 11 May 09

The Asia was red. The Europe too was red with FTSE down 0.6%, DAX down 0.96% and CAC down 1.93%. The US markets too ended in red. DOW and S&P did not attempt to go green but Nasdaq did try and skimped with the green for some time – though not far from the flat line. The DOW ended at 1.82% in red, Nasdaq 0.45% in red and S&P 2.15% in red. Believe me if it the down turn gets contained then this will be a very healthy time for the markets to consolidate and shed some weak hands now.

On the charts the weakness is evident with it being a second red candle and the candles leaving the upper Bollinger Bands. Now that the markets are showing signs of weakness the globe over it is important that we see some Fibonacci numbers yet again. The 32.8% retracement is to 3260 levels, 50% retracement to 3128 levels and 61.8% retracement rests at 2994 levels. I am sure that these levels will play very important role in the days to come. The 15 EMA is at 3502 and 3 EMA is at 3595. If the drop is substantial today then the 315 should generate a sell signal. The volumes were not good. Reliance too traded 74% of the last 50day average volumes. The ADX is bullish still but the –DI is fast moving down and likely that the ADX will have +DI going below –DI in a day or so. MACD shows negative divergence and is bearish. RSI looks down. TRIX looks down. The Slow Stochastic too looks down and is bearish.

The Pivot data is something like this----

R3 3786
R2 3708
R1 3631
Pivot 3582
S1 3505
S2 3456
S3 3379
Projected High Range 3607 to 3670
Projected Low Range 3650 to 3587

Put Call ratio 11 May 09

Fib Projected High 3694
Fib Projected Low 3499Optain Pain 11 May 09

Before I pen off – see the amount of faith the put writers have on the markets to go lower. Bearish in hearts of hearts? Like I said – it will be another interesting day today.

 


allvoices

7 comments:

shaq said...

sir..one quick question...how do we calculate the pivot and the Resis and Supp levels for a trading day which you post on the blog...i am still a beginner and will be very helpful if you can describe it..do we find from charts ?? or how??

S S Cheema said...

there is a small tool available on net. It is called EminiMaster_Pivotv1_0

do a google and you will get it.

Anonymous said...

Dear Mr.Cheema,
It is excellant. I was away for two days so that I could reply immediately. Pls continue with your Option Classes so that new entrants like me will get educated. If possible and time permits you, may I request you to reduce the time itervel, instead of weekly once - can it be once in three days or so. It is a request.

Regards,

Veer

Anonymous said...

Dear Mr.Cheema,
It is excellant. I was away for two days so that I could reply immediately. Pls continue with your Option Classes so that new entrants like me will get educated. If possible and time permits you, may I request you to reduce the time itervel, instead of weekly once - can it be once in three days or so. It is a request.

Regards,

Veer

Anonymous said...

Dear Mr.Cheema,
It is excellant. I was away for two days so that I could reply immediately. Pls continue with your Option Classes so that new entrants like me will get educated. If possible and time permits you, may I request you to reduce the time itervel, instead of weekly once - can it be once in three days or so. It is a request.

Regards,

Veer

Uma said...

cheema: u going great...!

S S Cheema said...

Veer - I am into full time job - it is very difficult to take out time to prepare something - especially when the effort on my part is to be as clear headed as possible.
Tomorrow or day after will try out a query that came to me - Trading RSI.
thanks for the compliment - ;-)