Hi… Here’s the update for 15th Apr 09

News has started dropping in that is not good – I am talking about the news basically from the US and Europe. The result season coupled with elections will be a heady mix here too. The markets have lost their momentum somehow… or they seem to be deciding which way to go here on. So much water has flown the other way that I doubt every word I write about the markets. Neverthless there has to be a point where in there is some sanity restored and the reality kicks in the face of the markets to wake up – well until then rock on.

So considering everything we will stick to the facts and emotionless reading of the markets – technically so as to say. Well the global cues continue to be mixed. The markets are perhaps looking for leadership as to which path to take than anything else. The wait and watch kind of situation. Asia was – well judge for yourself – Nikkei down 0.92%, Hang Seng a good 4.55% in green and Strait Times 1.08% in green. The Europe was all green FTSE started red went green and fell back to the flat line closing 0.13% in green. Dax made a similar pattern but managed to close 1.47% in green and CAC was 0.88% in green. US had started week and tried to recover but was not successful. Now by the mid session it is looking down and show no good signs of good health. DOW is down 1.41%, Nasdaq down 1.27% and S&P down 1.3%. The markets are just in mid session but all the same chances of recovery seems bleak.

Our small weeks with so many holidays are about to finish and we will have consistency in trading with five days a week back. Frankly these short weeks were supposed to lead to give a breather to the markets run up but that has not happened. The second point is that the 200 EMA that hold tall at 3395 has not fallen even after second consecutive day of being violated. The doji was somehow negated so we will look forward to some more signal before the verdict on bulls and bears is out. Looking at the charts the candle’s body remained within the Doji’s upper limit and that is not too good. Second point that I have already discussed is that the market did not end above the 200 EMA. Infact with yesterdays close the 200 EMA has inched up to 3406. The volumes  were wee bit lower but still clocked 171% of last 50 day average and are hell of a lot in this day and time. ADX continues to show strength of the bulls. MACD divergence is bullish without doubt but it seems that the divergence is not really growing. RSI has been too long in the overbought zone. Slow Stochastics have too been in overbought for pretty long now – well that is all that there is to the markets. Now the point is where do we go from here? The technicals are pointing to overbought overbought and overbought – also a lot of otherwise bulls are extremely cautious as the run up has beaten expectations. Well so be careful and that is what it all leads too. The market has perhaps swallowed more than it can chew. It has to breathe for some time to go further up.

The pivot data is as under: -

R3 3500 against 3495
R2 3460 against 3444
R1 3421 against 3393
Pivot 3377 against 3350
S1 3338 against 3299
S2 3294 against 3256
S3 3255 against 3205
Projected High Range 3399to 3441
Projected Low Range 3393 to 3351
Fib Projected High 3439
Fib Projected Low 3311

Best of luck for Wednesday and do read the options strategy that I gave in the last post.