How will this Sunday be - Black or Grey?

Yesterday my call-to-action in US markets was for booking profit at 17900/17950 in Dow. Check it out here. That call was given before the markets opened. Dow opened at 17925, reached a high of 17938 and finally closed at 17987, down by 29 points from last closing.

Trade in US markets was testimony to the confusion that prevails in trading community. Tug-of -war of sorts between bulls and bears, if you may! This situation of uncertainty is mainly due to a divided house on how Doha Meet on Oil Production Freeze will pan out coming Sunday.

Frankly speaking I have no hopes from Doha Meet of major oil producing countries. This aspect I had covered in my last post Bears Sharpening Daggers - US Markets in Danger of Bear Grip

How can you expect consensus from a motley crowd with divergent geo-political interests and views? Some of these countries have been serious adversaries for a long time with ethnic and sectarian undercurrents. And we are supposed to pin our hopes on a consensus from them? Not me.

What we can expect tomorrow is Black Sunday, as Doha Meet winds up with no production freeze. I say Black Sunday because that will galvanize a furious sell off in oil prices. Presently equity markets are moving in tandem with oil market, and hence I leave it to you to draw conclusions. Since equity markets are not decoupled from oil prices, I expect a mayhem in US stocks.

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!!!

Bears Sharpening Daggers - US Markets in Danger of Bear Grip

There are grave dangers for bulls in US markets. I had cursorily mentioned about a clutch of them in my earlier post What will topple markets - Crude, China or Cameron?

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. 

1. 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. 
2. Iran - Saudi rivalry will not allow any ouput freeze.
3. Iran has rejected call for output freeze because it wants to attain pre-sanction output of 4 mln brls per day.

Long and short of the above inputs is that there is likely to be no cut or output freeze on crude and hence oil prices will start falling from next week. This will negative for stock markets which will see bears taking firm control of markets.

China 

1. 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. 
2. 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.
3. China's love for madcap dictator of North Korea and his antics.
4. China's slowing growth, likely property bubble burst and debt burden on its banks can be reasons for global economic tremor.

Any or all of these reasons can surface over the weekend to sour investor sentiments in the market.

Cameron & Brexit

1. Referendum on Britain's exit from European Union (Brexit) will take place on 23 June 2016.
2. 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. 

Over the weekend any adverse news on these fronts can make the markets tumble with banks leading the down-slide.You would agree that in such a scenario there is no point in showing bravado, if you are a bull. Exit from your long positions as US markets open today.

Thrilling Race To 18000 in Dow - Will We Witness It Today?

US markets gave a captivating performance in last trading session. Dow rose from a day low of 17742 to a day high of 17918, finally settling down to close at 17908. That is as bullish as you can lay your fingers at!

There were a couple of compelling reasons for such a fascinating journey northwards in US equities. Most compelling reason for this bullish lift off was JP Morgan coming out with good results. While the street was expecting poor show from financial institutions, out came results of JP Morgan sweetly surprising market participants.  Bears were caught unawares and got painfully caught in a bear trap.

Well that seems almost history now. Dow Jones has marched majestically towards its psychological level of 18000. Now the most important question is - will Dow achieve 18000 in trade today? I think it will, although Dow should open flat. As of publishing this post, European markets are marginally up and Dow Futures is also slightly up. Oil after being in red has shown strength and entered into green territory, which is good news for bulls.


If Dow misses 18000 today, I am sure traders will take the index to this important level before going on weekend holiday.

But what after that? After Dow reaches this psychological level, we should be on a look-out for correction. So we must exit all our long positions in Dow. I must admit that Dow may go even higher than 18000 before correcting, but that will be taking high risk. I say so because 18000/18200 in Dow is a strong resistance zone. Keep watching !

What will Topple Markets - Crude, China or Cameron?

Global markets across Asia and Europe are in supreme bullish fever. Everywhere there is welcome green, and that too of deep hue. Dow Futures is 89 points up. But crude is down. which may prove to be a spoiler in trade today.

Judging from situation US markets should open with a gap up. After all it has to reach 18000 destination. Check it out in this blog post.

In this wonderful bull run starting mid Feb 2016, there has to come a time for meaningful correction. Traders will take some excuse or the other to book substantial profit.

Will that excuse be provided by Crude or China or even Cameron? We will intensively investigate and analyse that in my next blog post. So keep lookout for in-depth analysis of impending correction in US markets in this space.

Enjoy the Journey - Dow Is Squarely on Way to 18000

US markets ended last trading session with a strong close, with Dow closing 165 points higher.

Those who have been acting on my buying advice given in this blog, must be enjoying the ride in US markets.

Right from 17400 level in Dow, I have been pleading with my readers  to buy US markets since I could see that Dow Jones was headed to 18000. That is 600 Dow points on offer, which means that even if you had chosen the wrong scrip to buy, you would still be in  profit, albeit small.

I have continuously maintained through this blog that it is time for buying action. You can check out in this post on 30 March 2016.   And I continued exhorting my readers to buy US markets at every opportunity even after publishing this post on 30 March 2016.

Before this recommendation of buying, I had earlier advised my readers to buy in US markets when Dow was at 16500 and sell when Dow was at 17200. That is cool 700 points in Dow achieved in just 15 trading sessions. Check it out here.

I hope I am making my point. If you are here reading this blog and you are in US, then do profit from my recommendations. I am not asking you to blindly follow me. You can perform your own research to my recommendations, or take advice of experts you trust. After that arrive at a decision to whether follow my recommendations or not.

Whether you agree with my views or not, I would only request you to air your opinion in comments section of this blog. It will compel me to reconsider my views when you disagree. I am sure your views will be valuable to other readers also. Plus it will delight me to no end!