This post is a call to action before opening bell for all those who are long in US markets as per my recommendation. It is serious and urgent situation and I shall give detailed reasons in succeeding paragraphs.
Bears are gleefully whetting their hatchets and tomahawks, waiting for markets to open. So the wise thing to do would be to square off all long positions between 17900/17950 in Dow.
I agree that you would feel cheated if Dow was to surge northwards, but it is better to take profits off the table. Remember we had built long positions as per my advice at 17400 in Dow. If you take profit at 17900 you still would have accrued 500 points in Dow.
Massive resistance in Dow Jones exits at it's long term selling zone of 18000/18200. No need to take extra risk in hope of collecting 100 Dow points more, with dark clouds gathering on global stage. These dark clouds are in shape of following events lurking round the corner:-
Doha Meet on Crude Output Freeze.
- On Sunday Oil producing countries are coming together at Doha for a Meet on Crude Output Freeze. Iran oil minister says he will miss Doha meet. Saudi Arabia indicated that it won't support any output freeze accord unless Iran signs.
- Iran - Saudi rivalry will not allow any ouput freeze.
- Iran has rejected call for output freeze because it wants to attain pre-sanction output of 4 mln brls per day.
China
Cameron & Brexit
- US is stationing warplanes in Phillippines this week as vanguard of a major deployment there. This is in response to Beijing's assertiveness in South China Sea. US deployment is seen as a means of alleviating tension in the region.
- Tensions are escalating as United Nations backed arbitration panel in The Hague prepares to rule in a case brought by Phillippines against China's maritime claims in South China Sea. This is due to concerns over China's construction of artificial islands in South China Sea and its recent deployment of weaponry on a disputed island. China's grand strategy is to use the world as one big supply chain.
- China's love for madcap dictator of North Korea and his antics.
- China's slowing growth, likely property bubble burst and debt burden on its banks can be reasons for global economic tremor.
Cameron & Brexit
- Referendum on Britain's exit from European Union (Brexit) will take place on 23 June 2016.
- Last week Saturday thousands of Brits swarmed the streets of London demanding Cameron's resignation in light of Panama Papers leak. The papers linked him to having invested at one point in offshore funds his late father had created.
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