Friday, April 22, 2016

Out of Work But Thankfully Out of Danger - US Markets Dive

We went out of business when Dow reached 17900 last Friday. I had asked my audience to exit US markets with Dow between 17990/17950. Dig out details here.

I not only asked my audience to exit markets, I also told them to stay on the sidelines. That makes us unemployed - watching the battle from gallery. Probe yourself. If you are short of time to probe, examine the operative paragraphs :-

"The best case scenario is that the sell off in equity markets takes place in slow motion. Big players may choose to exit their positions in a classical "Distribution Process" so that they can obtain reasonable price for their huge long positions.

So you may witness very high volatility with spurts of buying interest emerging and trying to draw eternal bulls into a bull trap. That is the shade of grey for you!. Keep out of markets and watch it from sidelines till dust settles down. I will keep you posted and immediately inform you as and when that happens. Be safe, be happy - adopt a no-trade strategy for the moment!!!"

Watching from sidelines, you can witness battle raging between bulls and bears. Today bears seem to be winning. I have been maintaining in all my previous posts that bears will defend their last known territory between 18000/18200 in Dow. You can find mention of this here or read the excerpts below ;-

"I still maintain this view that there is no point in sticking one's neck out when Dow is in its long term selling zone of 18000/18200. Bears by all means will defend this last territory. Once out of this territory,Dow will be breaking new grounds - where no man has ever been before! All- time- high of Dow is 18351."

US markets are down more than 100 points at the moment. Don't you agree that we are safe sitting out this volatility? It is very difficult to be holding positions in such times when there is no clear trend.

At such moments you cannot even build short positions. For all you know, tomorrow you may find Dow 100 points higher. 

One thing is certain though - definite move either way  will be signaled by an intra-day movement of 300 points in Dow in that direction. Therein lies your indication to trend development. 

Watch this space regularly for updates and call to action. Also, your comments will be most appreciated. So take out few minutes to do me a favor and comment without any inhibitions.