June 10, 2011

  • A possible broadening pattern in hour time frame of Dow Jones.
  • Pattern will be effective only if today's 11961 is held.
  • Dow Jones it seems has made a top near 78.6% Fib level in month chart. First chart shows current month price action. Second chart was posted in april.
  • If price closes and sustains below 12000 It may start to move towards the 61.8% Retrace level which is near 11200. This is a medium term view. 
  • Short term will be bearish only if price sustains below 12000.
  • Medium term view may change only if price moves above 12500 level.
  • Support line is violated as of now.
  • Dow breaks 12000.
  • But there is hope for a small bounce if the support line shown in the chart is held.
  • Breaking the support line will favor bears again.
  • ES is retracing yesterday's up move.
  • Fib level shows price breaking the crucial 61.8% level. Price may find support at 78.6%. If this level too gets broken we may see a full reversal and break of yesterday's low.
  • Now bears should protect 5480 - 5500 level.
  • Nifty is still inside the triangle that we say yesterday. But this time it is close to the apex of the pattern I hope it is not another false breakout this time as triangles use to do often.
  • Note: A busted pattern can also give a great trade. If price comes back into the triangle we can reverse the trade for greater profits. 
  • Have strict stop loss. Happy trading.
  • Bollinger band shows price contraction. Since price is stuck between the upper band and 20 DMA a close outside these two ranges might give direction. Price closing above the top bollinger band will make it an inverted head and shoulders and Cup and Handle Breakout.
  • Small triangle shown in the first chart if gives an upper breakout will give momentum for bulls. But they need to take out 5570 - 5605 and close the day above these levels.
  • for going short price should sustain below 5480 - 5500 level, this level is showing good support for now.
  • SPY 30 Minutes char is showing a possible resistance band from 130 - 130.16 level.
  • Price closing above this level will favor bulls.
  • Getting resisted at 130 may push price down to 129.40 levels today.


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My Favourite Quote

"All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis."
—Jesse Livermore