Update for 16 Jun 09…

The inevitable happened – after weeks and weeks of up move without a meaningful pause the markets finally all over the world signalled a breather on the rally that has been going on for so long. Now what would be of interest to everyone is the depth of the correction and whether it has the capability to push down the markets to the previous lows. Well I am sure that anyone at this point would ideally tell the direction meaningfully as a second guess and nothing else. What I mean is that there are just too many variables at the moment to say for certain – to which levels the markets are going to go in this correction. On one hand the indicators I follow have still not generated a positional shorts to be held – but then It is as per the indicators that I follow. On the other hand the correction has been the world over with all indices falling more than 2% without exception, and it seems to be the end of the line as far as the good news is concerned. Apart from this there are supports on the lower side that may play out and resistances on the march forward of the indices. So there are a multitude of factors that are going to support any new theory that may crop up giving us the direction. The reliance had played out exactly as predicted, as expected and written yesterday – it fell and fell really hard.

The global cues are as I just pointed out – bleak. Asia was down to start with and so was Europe. Europe started weak and then as the day progressed and came nearer to US opening the markets had another bout of selling – finally breaking the markets and ending at the days lowest levels. FTSE was down 2.61%, DAX down 3.54% and CAC down 3.2%. US too opened red and then went on to touch the lows around the mid session and then recovered a wee bit to close – Dow down 2.13%, Nasdaq down 2.28% and S&P down 2.38%. As I write now – only Nikkei has opened and – it has opened 1.25% in red – no reason to believe as of now that the markets are likely to show some recovery after yesterday’s fall.

On the charts the black candle with the 3 EMA plotted has touched the 15 EMA and the crossover is of 3 EMA below 15 is likely – generating a positional sell signal for all those who are the fans of 315 trading strategy. The volumes were once again progressively lower and the Bollinger Bands have stopped constricting any further. On the ADX –DI line is showing all the signs of crossing above the +DI line once again signalling to remain short. MACD is bearish with the negative divergence increasing. RSI is bearish and so is the Slow Stochastic. The TRIX too is looking down. So after a fairly long time all the signals are negative so as to say. I am looking forward to around the 4350 levels – whether they hold or give way and then see what happens then. In any case below this the levels that I see is 4050…

The Pivot data now…

R3 4733 against 4840 yesterday
R2 4650
R1 4567
Pivot 4518 against 4614 yesterday
S1 4435
S2 4386
S3 4303 against 4408 yesterday
Projected High Range 4542 to 4608
Projected Low Range 4593 to 4527
Fib Projected High 4636
Fib Projected Low 4433

I will end this session now and wait for another day before posting the Option data for Nifty. Best of luck to everyone.