Saturday, March 19, 2016

Dow Jones Blasting Away - Where Is The Chance To Enter Trade?

US markets are on fire. Such power punch by bulls is rarely seen. One wonders what has changed so dramatically that bulls are charged to such an extent. If the answer is Fed's promise of only two rate hikes in 2016 as against earlier threat of four rate hikes, I am not buying that argument. If you are told Fed rates have been kept on hold and hence the belligerence of the bulls, do not believe it.

Look at the complete picture of bull run. It started in mid Feb 2016. Fed decision, to keep rates unchanged and the hint of only two rate hikes in 2016, came only day before. Then what explains the start of bull run in mid Feb 2016. Do not tell me that bulls knew of  Fed's mind as early as Feb 2016!!

 What has changed so dramatically in global economy that the bulls are cheering so ferociously? Is it oil and its northward journey? But oil has gained only $10 a barrel since Feb 2016, which amounts to no big deal considering the fact that it is still in bear territory and looks poised to sink into well again. There is no sign of production cut on the supply side.While on the demand side there is no pick up since the global economy is in the clutches of recession. The short point is that oil's small gain is not sustainable and is no indication of global economic well being.

Then what is driving the bulls crazy since Feb 2016? If we look at Dollar Index we find that it is sliding with consistency since Feb 2016. This could be driving the bulls to fearlessly trade in US markets. But the moot question is -  what is driving dollar down against major currencies? Some maintain that this is due to a secret deal struck by central bankers at G-20 meet in Shanghai on 26/27 Feb 2016. Deal was to weaken the dollar so that there is some stability in global markets and trade. Very noble!

However the question that begs an answer is simply this - how on earth did the bulls come to know of the secret deal of Central Bankers of G-20 nations earlier than it was hatched? Is it pointing to chink in the revolving door policy of US financial system? Point to ponder seriously!!

Meanwhile Dow Jones has closed above 17600 in today's trade and this close is very near day's high. This has been another strong showing by bulls. Looking at the situation, target of 18200 in Dow in this current bull run does seem quite attainable.


Thursday, March 17, 2016

Dow Jones Moves Up In Flourish - Is It Time To Buy?

With US markets going great guns in today's trade, one can clearly assumes that markets have liked the dovish tone of Janet Yellen. I thought that yesterday's euphoria was due to Fed's indication of two rate hikes in 2016 instead of earlier Fed view of four hikes. Today's trade clearly indicates that it is more than just one day's celebrations. There is substance in this bull run.

So the question arises whether one should enter trade or not. My answer is simple. Buy every dip. Moment you see Dow easing by 100 points, buy your selected stocks. This buying should be continue right up to 17100 in Dow Jones.

In other words you start your buying as and when you see a drop of 100 points in Dow and keep up this buying spree till level of 17100 in Dow.

I am recommending this because Dow is likely to touch 17800 with minor corrections. Trade patiently, trade safe !!!

Wednesday, March 16, 2016

Fed Rate Hike Decision Today - Will You Buy or Sell?

At the end of FOMC Meet today, decision on Fed rate will be out. But what will you like to do in the market? Will you sit on the sidelines or jump into fray. I have some suggestions, so read on

After the Fed decision, if  US markets decide to plunge, you be ready to jump in with your buy orders. If you find that Dow Jones has dropped to 17000, then you must buy. From 17000 you can expect Dow Jones to again recover to its recent high in couple of trading sessions.

But if the markets race up after Fed rate decision is announced, stay away from trading. Do not chase prices. It can be fatal!

So be ready for the Fed decision and do as I have recommended.

Tuesday, March 15, 2016

Dow Jones is Pausing - Fed Rate Hike in Focus

Like I said yesterday, Dow Jones needs to take pause from its Bull run. You may check it here. And today Dow is likely to do just the same. There may be many reasons, like oil slipping due to unlikely production freeze, Fed likely to raise rates or even Bank of Japan maintaining status quo in rates. Whatever reason you may like to ascribe, it is certainly not the time to take definite trading decision to enter trade in US markets.

Now let me be candid about what you may expect from US markets in this week. You can expect wild intraday swings with false break-outs on both sides. This is definitely not what you would like to happen to your new trades, unless you can be very nimble footed in intraday trades.

That is why I would suggest that no new trades should be initiated in US markets now. I will give a  clear indication to enter into trade again, like I did in this post. Hence it is important that you keep watching this space to initiate trade again in US markets, so as to enjoy clear hassle-free profit

Monday, March 14, 2016

What will Dow Jones do Next- Remember Trend Up Needs to Pause

Dow Jones has to take a breather. And why not? It has just run up 700 points almost at a trot. It did this swift bull run in flat 15 days. But if you count the trading days, it is only 12 days. That is when I gave the call to buy on 25 Feb 2016. Check it out here.

However if you see the total bull run of about 1200 points in Dow, it took just 20 trading days. That of course I could not spot. When I did spot the continuation, Dow Jones had already run up 500 points.

Now I am advising that one should stay away from trading in US markets. Let the dust settle down. Dow may go up a little but there is no certainty. There are plenty of dangers lurking there. So the sane thing would be to wait out this uncertainty.

Be certain though that when there is clear chance of making money in US markets again, I shall give the call right here. So keep watching this space.