Worried About Earnings Season In US? - Banks Expected to be Culprits

If US markets fall in this earnings season, Banks will be leading the fall.
Banks are potential under-performers and this earnings season they could be the biggest drag to US stocks..

For economy to do well, its banking sector has to be at least on even keel, if not racing on full throttle. But with ultra low interest rate causing ripple effects on banks' balance sheets, results of banks can be anything but ugly. Dovish stance of Fed on future rate hikes as also sharp decline in oil prices have not helped..

So be ready to get jolted this earnings season by dismal results of US banks. Other positive corporate earnings may act as countervailing effect to banks' earnings for US stock market to absorb the shock.

However, today Dow should remain positive since oil is up along with gold. It seems investors are slowly tucking away proceeds to gold as a safe haven, just in case the stock market tumbles. That can only explain gold price rising with the stock market. And yes, Dow futures is also up.

Oil being up is definitely a positive for the stock market. So be ready to welcome Dow in green territory today.

Dow Experiences High Volatilty - Can It Attain 18000?

Very surprisingly Dow closed 20 points down in last trading session. It was more intriguing since all factors were pointing to a positive close.

For bulls, the closing tick of Dow was dampening since at the beginning of trade Dow was trading 150 points up. That means Dow dropped 170 points without any rhyme or reason.

Was it because of concerns over Alcoa reporting dismal earnings? And can Alcoa earnings outweigh rally in oil prices? Frankly I do not think so. Alcoa earnings cannot alter market sentiments so much that Dow sheds 170 points intra-day. It has to be simple profit booking at higher levels, with traders making themselves light at the very first excuse..

Volatility was such that Dow from day high of 17732 closed at day low of 17556, a drop of 176 points. That drop without any genuine reason only suggests that today Dow will give a positive close.

But if today Dow again closes in red, then we will have to re-calibrate our sell target downwards from 18000. In such a scenario we will have to square off our buy positions at 17600/17700 in Dow.

Bull Roar Resounding Across Global Markets - Will Dow Dash towards 18000?

Global markets are performing well for bulls. All asset classes are doing well, including gold and oil. That is a rare phenomenon.

US markets are also in pink of health. Belying all expert opinion, US markets have continuously and consistently performed for the last two months.

Since mid Feb2016, Dow Jones has made a V-shaped recovery and it is still going great guns. It has gathered almost 2300 points since mid Feb 2016 without any serious correction. That speaks volumes of the serious bull charge in US markets.

As of publishing this post. Dow has gathered steam and added 140 points to the index. That is splendid news for those who are keen to see 18000 in Dow.

And that is what I have been maintaining as target for Dow in this bull run. Check this out in my 30th March post here. 

If you are following this blog and trading, do post your views in the comments section of this post. I will love to hear from you. I am sure all my readers will benefit from your views

Fasten Your Seat Belts -India and China will be Main Drivers of Global Growth

IMF is about to revise its global projections of growth from 3.4% in 2016. Its going to be a downward revision. It is no rocket science to understand that this downward global growth projection will be due to  global slowdown in productivity, debt overhang, sluggish demand growth and you can go on and on.

At this point in time, everything that can be wrong is wrong with global economy. In this scenario the only beacon of hope for global growth is shining in India and China.

Conditions are more India leaning as the present Indian Govt is continuously making the right moves to drive growth. Mark Tully, ex-BBC correspondent in his book "No full stops in India" holds this very view.

This is what mark Tully in his book maintains : "The way changes are coming in Railways, Power sector, Defense Production and in governance and at the same time accompanied by the resentment of the old forces indicate that the process of change has begun albeit slowly but firmly and is going to be painful."

The only caveat is that Indian Govt should take immediate steps to quickly recover huge capital to the tune of Rs 4.4 trillion from willful defaulters of banks.

US Markets End Iffy - Should We Remain Undecided?

 

Dow Jones Industrial Average (DJIA) could not climb the wall of worry. This wall is erected around 17700 in Dow. In my last post I had mentioned how Dow needs to climb over 17700 wall to be able to reach 18000. In last trading session Dow made a high of 17695 and then dropped down to close at 17577.

Scenario No 3 as given in my last post has happened in trade. So we have to wait for another trading day to get a sense of which direction Dow is headed. More importantly, we have to find out when we need to exit our long positions.

All that has been discussed in my last post so just keep all conditions in mind. As of now there being no clear signal, we need to hold on to our long positions.
 

US Markets at Critical Juncture - What Happens Next?

US markets underwent further pain with Dow slipping 174 points in last trading session. This is serious damage to the index and has to be evaluated with full sincerity.

What does last closing in US markets indicate? Is it still safe to hold on to long positions? Let us try and get some sense of what is in store for the bulls.

Next trading session is very crucial to answering all these questions. For doing an honest analysis, let us consider the following scenarios :-

1. In next trading session if Dow closes near 17700, then long positions are absolutely safe and 18000 in Dow will be a reality.
2. If Dow closes near 17400, then we may see Dow slide down to 17000/17100 level. If this happens then we need to be patient and wait for a bounce. This dead cat bounce should take Dow to 17600 level where we should exit all our long positions.
3. If Dow closes near 17600 in next trading session, then we will have to wait for another trading day for either of the above mentioned points to happen.

The nub of the situation is that we will have to exit our long positions either at 17600 or 18000 in Dow, based on movement of Dow in trading sessions ahead as enumerated in preceding paragraph. So be calm and hold your horses!

Dow Makes a Comeback - Hold Your Long Positions

Yesterday US Markets witnessed strong buying. That helped Dow Jones gather 113 points to close at 17716. This is good news for all those eyeing for 18000 in Dow.

Buying was mostly spurred by oil making a strong showing. And strength in oil got rubbed on to the stock market.

Push in oil prices were witnessed right after Fed announced that the rate hike will not be scheduled for April. Further there was surprise fall in oil inventories. Grapevine was also in the market that soon there will be agreement on production freeze between major oil producing countries.

Whatever be the reason or clutch of reasons, stellar performance of oil ensured that bulls thundered on in US stock markets.

Today if we have positive close in US markets it will be further confirmation that 18000 in Dow is going to be achieved. 

So keep holding on to your long positions and good luck!

Dow Futures In Green - Will US Markets Open Strongly?

Yesterday Dow closed with a heavy fall. It closed 134 points down to register 17603 in the Index. A very ominous closing to put it bluntly.

However Dow Jones closed above 17600 and not below this psychological support level. That is significant as of now. This was elaborated by me in my previous post which you can access here. Till this support level is not violated by Dow on closing basis, we should retain our long positions.

As of publishing this post, European markets are in green and Dow Futures is indicating a positive opening in Dow today. We hope that Dow takes support from present closing and moves higher. The manner in which Dow rebounds will dictate our exit level.

Today oil is also on a rebound amid hopes of a production freeze. Let us watch how long this sunshine in global markets lasts.

Global Markets Sell Off - Dow Jones Not Yet In Sell Territory

Dow Jones is down to 17600. Is it time to worry for long positions held?. I do not think so

In fact it is at 17600 that Dow Jones should take support. If it does take support here then we can see 18000 in Dow.

But in case Dow slips below 18600 on closing basis then we will have to review our position. To be precise,  in case Dow closes below 17600 then wait for Dow to reach 17700 again and exit your long positions.

However as long as Dow closes above 17600 we need to keep our long positions till 18000 in Dow.

Indian markets dived deep into negative territory today. Nifty closed at 7603, down 156 points. That has made Nifty vulnerable to further downside.

But if tomorrow Nifty closes in green then we will have a chance of good bounce back in coming days. Nifty has to give a strong closing tomorrow if it has to reach 8000 in this run up. Hope Nifty closes above 7700 tomorrow!

It is a Steep Climb to 18000 - But Dow is Doing Fine

US markets seem to be taking some time to reach 18000 in Dow. After all it is a steep climb that has to be negotiated. But have no qualms, Dow Jones is right on track to reach 18000.

Moment we find any signal of reversal, you will be intimated. Be sure of that. So for now keep holding your long positions till Dow Jones reaches 18000. 

Manner in which Dow reaches 18000 will decide the fate of Dow after 18000.

As for Indian markets, Nifty closed in the green today after trading in tight range. However Nifty is racing ahead to make a breakout from the present trading range.

Today Nifty closed at 7759. Tomorrow RBI review meet will give the decision on rate cut and also give out their guidance going forward.

In case RBI gives 50 bps rate cut, then Nifty will surge ahead to make a break out from its present trading range. 

However if RBI announces only 25 bps rate cut then we will witness a drop in the markets. With 25 bps rate cut we will witness Nifty move sideways in the range of 7700 - 7400 for some time to come.

Racing Towards Target - Dow Jones Steams Ahead

 

Dow Jones picked up steam to race towards its goal of 18000. That is exactly what we had predicted in this post

In yesterday's trading session Dow Jones gained 107 points and closed at 17792. This momentum is sure to take Dow Jones to 18000.

Those who took cue from my earlier posts to buy in US Markets would be sitting pretty with hefty gains. I had given this buy call when Dow Jones was trading at 17400, six trading sessions back. Hope you see reason  to trade my recommendations.

 As for Indian markets, Nifty is taking a breather before resuming its upward journey.

Nifty seems to be in consolidation phase. The following scenarios can happen in Nifty, which closed at 7713 last Friday :-

1. Nifty can come down to 7600 level and then take support.
2. Nifty can go further down and take support at 7300 level.
3. Nifty can go up from here and close near 7800.

Whatever be the case, Nifty is consolidating to make a dash to 8600 in couple of months.

Dow Jones Breaks Out - Is It On Road To 18000?

Up up and away!

US markets are in a wonderful northward journey. What a majestic jump it is taking in today's ongoing session!!

If you have been following my advice over a number of days, you have got an entry in market and now you are in profit. Check my last four posts pleading with you to buy US markets:-

1. Dow Jones Tumbles- Ready to Buy in US Markets?
2. Remember to Buy US Markets Today - Pick the Dip
3. US Markets Lose Traction - Have You Started Buying?
4. Compelling Market Conditions - Do Not Stay Away From Trading US Markets

I guess Dow Jones is good to reach 18000 in this run up. For now let us watch the bulls in full force.