Humpty Dumpty sat on a wall.............. Humpty Dumpty had a great fall

only a few days ago I was absolutely confident that a jump back was due. We waited for a rally, waited as all the indicators turned bullish one after the another. And then the rally came, two days of wonderful white candles. Why am and not so happy then? Am I just plain jittery or have I lost my mind? but one thing I'm sure of is that am not happy. what made the markets jump the way they did? Drop in oil prices? A buoyant in Europe or America? A stable political situation? I don't know.

I'll try to tackle all these points one by one. Firstly the US -- the US rallied not because the economy is improving but because firstly they had gone into oversold zone and secondly like I had mentioned earlier there is a limit to your reaction on bad news. Citibank posted billions of losses -- then where is the good news? The market says the good news is that they had expected a little billions more in losses. Not convincing -- but I'll take it with a pinch of salt. Second is the oil -- Jaggu had already mentioned days in advance that oil is about to drop and drop it did. I too remember mentioning that the oil has gone up to much too soon and it was only speculation that kept it up it had to cool down even in case it was to continue its journey upwards. Is it the consolidation before moving up? Or will it now remain at lower levels -- only the time spent and we can do nothing except to wait. Third, is a political situation. The horse trading is going on but who will emerge as a winner? Once again only the time can tell.

So you see on the first account there is no good news. On the second, the oil account there is good news but the trend is yet to declare itself. On the third account only the gods can guess. So will this rally be meaningful? Or are we being moved to a higher plane just to drop us harder? we will know in the coming few days. In any case the lesser the exposure in the markets till 22nd may deny you gains but not rob you of all that you have.

The US markets on Friday, DOW was up by .44%, NASDAQ in red 1.28% and S&P 500 absolutely flat at .03% green. All in all inconclusive and probably a little negative. What now remains to be seen is probably the opening of Asia tomorrow morning. However, under our present political situation unless a there is decisively green or red should not make too much of a difference to our opening or closing. For Monday I expect the markets only to react to whether the government will survive or the government will topple. Also this news should keep the volatility very high as 22nd is just the next day.

Coming to the charts, two wonderful white candles if followed by another white candle will take us to the next level of 4200/4400. There should be a strong resistance at 4216 before we move up. That was the last high made on Jul 11th. There after there will be the level of 4325 to be broken upwards to continue up as that is the 38.2% Fibonacci level. Apart from that MACD is looking good, RSI is good, TRIX is looking up and slow stochastic is looking up too. On the other hand TRIN as told by Jaggu is bearish and so is ADX. So going further up is a strong possibility but not a must. A drop can be very - very severe too.

Keep this all aside and keep a very very sharp eye on the political developments before taking positions. Best of luck for Monday and have a ball of trading day.