Dow Jones Ready to Jump Higher

MarketWatch is screaming with headlines

Why another global stock market meltdown is due

But don't get carried away with such headlines. It is surely time to start accumulating select stocks in US market. Whatever happens, from here Dow Jones is poised to reach for higher levels.

If Dow closes in green today, then be sure to see a move of at least 700 points in Dow. This move of 700 points northwards in Dow will be completed within 15 days. That means that if Dow closes in the green today, then one can safely trade for very short term for a level of 7200 in Dow.

So let me know through your comments whether you have been able to profitably trade on the long side in US Markets.

Good Luck to your profitable trades!

US Equity Markets Topping Out - Short Sell To Realize Profit

US equity markets have risen fast and furious in the last fortnight. Dow had closed yesterday at record high of 17612 and looks strong to rise even further. In my very first blogpost I had given the target of 18000 for Dow when Dow was sliding towards sub-16000. Though 18000 has not been achieved in Dow, right now I am of the opinion that its high time to short the US market for some handsome gain. The reason is that US markets are clearly making a top. Maybe an intermediate top, but topping pattern is sufficiently evident in Dow. And that is the reason for traders to go short and make money.

But what if I am wrong? Well the fact of the matter is that this kind of distribution can be sustained only for maximum another couple of hundred points if we are following Dow. In other words if Dow doesn't sell off from present level then it will certainly sell off within 200 points. That means the sell off zone for Dow is between 17600 to 17800. Hence traders in US equity markets need to take short positions now and rake in handsome profit.

For traders in Indian equity markets, this is the signal to go short. You can short all front-line stocks with gay abandon, especially the banking sector. As the US markets sell off there will be contagion effect in Indian markets. Decoupling is still quite some years away, so go short as US markets are topping out.

Is Strong Weekly Rally In US Markets Convincing Enough?

US markets had another splendid day of trading, with bulls raging all the way. Dow closed with gain of 128 points and in the process exhibited some resolute buying action in second half of  trading session. The past week saw US markets register a strong rally after a long time. But since Dow closed at 16805, it is considered to be moving inside the correction zone of 16600-16900. Hence it is still susceptible to correction.

However in the end, markets will be markets. For all you know Dow can make a V-shaped recovery without much of a correction and go beyond its all time high. It is a possibility, even though a remote one. For taking action in the US markets traders need to weigh in all the possibilities and trade accordingly. That sounds quite cliched! Hence to qualify and quantify my statement I am going to discuss various levels possible in Dow and recommend action for successful trade.

From the present position Dow can move in the following possible ways :-

1. Dow keeps moving northwards without any correction and reaches level of 17350 (its all time high). This situation is highly improbable. But if that happens then one can go short from 17350 level for quick profit of 400 points in Dow.
2. Dow fluctuates in its correction zone of 16600-16900 and then closes above 17100. In this situation one should go long for target of 18000.
3. Dow fluctuates in its correction zone of 16600-16900 but reverses direction without closing above 17100. In this situation one should go short for target of 15400. This situation is of high probability.

Tread carefully as you trade, its a minefield out there!

Dow Prances In Correction Zone

Dow gained healthy 217 points in last trading session. It was a bit surprising, but such movements can be expected once the index is in a band where correction has to take place. As I maintained in my earlier posts also, Dow has to go into a correction from its correction zone of 16600-16900. Within this band there will be volatile movements if you are tracking the index daily.

Yesterday Dow was buoyed by good set of earnings results from some Dow components. Today Dow is likely to go into negative territory with the Ebola scare in US. Such daily news will effect Dow movement in volatile manner till the time it is in correction zone.

News of major consequence is that Stress Test result of Eurozone banks are going to be to the liking of investors. The results will  be declared coming Sunday. Most banks are going to make the grade. Only a dozen of very small banks are likely to fail. This will boost investor confidence in Eurozone and is likely to propel  markets higher.

Dow Nosedives To Negative Territory

US markets ended in red in yesterday's trade. Dow lost 154 points from previous close. The slide was significant since there was no real effort to recover from day's high during the entire trading session. That is not to say that all is lost and the slide has finally begun. Far from it.

In my previous post I had mentioned that Dow would gravitate into negative territory since it has reached the correction zone of 16600-16900. And yesterday we found Dow do exactly that. This situation should prevail till result of Stress Test of Eurozone banks are declared on Sunday. In other words we still have to endure selling bouts for two more trading sessions.

Today we may witness some bounce in Dow in initial trade. But in all likelihood this bounce will be sold into. 'Sell on Rise' may be the refrain in today's trade in US markets. The bigger question that begs an answer is whether consumer spending in the coming holiday season bring the much needed cheer to stock markets. Its a complicated situation mired in many 'ifs'.

Stay tuned to these pages and I will guide you through the noise and rumble of stock market movements. US markets are in focus for the present so that you do not make any cardinal mistake in trade in Indian markets. Before US markets are poised for their final move into the Bear Phase, I will announce the event so that stock market participants can exit Indian markets also. My focus on US markets will help in determining that day. Remember that crash into Bear Phase will be witnessed in tandem across all world markets.

Trust me to give you the call before the markets crash.