July 8, 2011

  • Dow Jones hour chart shows clear break of the channel.
  • Support in hour chart is near 12530 level.
  • Break of this level will turn the trend in favor of bears.
  • SPY MAY DO AN ISLAND REVERSAL
  • Despite today's GAP down price stays above the cloud.
  • Trend will turn in favor of bears only if it stays below the cloud.
  • SPY's CHANCE OF AN ISLAND REVERSAL
  • If the GAP of yesterday and today stays like this without closing we may see an island reversal pattern.
  • ES falls following bad jobs Report.
  • Trend line in 4 hour chart is broken.
  • Now the key level is 1326 - 1328 level.
  • Breaking and sustaining below 1326 may turn the trend in favor of bears.
DARK CLOUD COVER

CHART-III
  • A triangle that worked perfectly after a long time. Look how it also looks like a sloping head and shoulders pattern which increased its bearishness
CHART-II
CHART-I
  • Nifty 15 Minutes is trying to put up a triangle pattern.
  • Breakout from this pattern may give good direction.
  • One should also expect whipsaw's.
  • Three important short term levels for nifty bulls to defend are 5705, The channel support line and the most important number at 5605.
  • Nifty weekly chart shows a possible resistance area at 5750 on closing basis. 
  • Price is near 200 DMA.
  • These are the next two resistance points. Good weekly closing above these levels will take nifty closer to that upper bollinger band shown in the 2nd chart.
  • On the contrary getting resisted here and closing below 5700 will be slightly negative.
  • DOW JONES EOD ANALYSIS
  • Dow Jones 30 Minutes chart shows price moving up in a channel the smooth up trend yet to be challenged.
  • Hour chart shows price trending up above shorter period moving averages and ichimoku cloud.
  • Hour indicators have started to show negative divergences and weekly resistance is at 12875 level. In all likelihood price will test 12875 level and then start the correction.

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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