September 2, 2010

S&P 500 intraday update

  • S&P 500 is trading near 50% fib ratio of its fall from 1129 to 1039.
  • Index is trading above 50 and 20 DMA right now.
  • 20 DMA has crossed below 50 DMA which will give some hope for the bears.

Dow Jones futures before opening bell

  • Dow Jones futures hour chart is showing negative divergence.
  • One should take a close look at the channel that has developed in hour chart. Channel break can give good direction today.
  • I would like to see a down side break because of the negative divergence that is developing. But one should  wait for the breakout of the channel to enter the trade today.
  • Daily chart is entering the zone of 10230 - 10350. If you see towards the left side of the chart you will notice price hanging around this region for quite some time before taking the next direction. So above 10350 it will positive. Below 10230 correction can happen.
  • S&P 500 end of day analysis
  • Dow Jones analysis after closing bell


  • Nifty Futures will end the day within the range. A gap up or down may resolve this one tomorrow
  • FLAG Gave a breakout but did not go above day high 5508 which was discussed below.
  • Nifty futures 5 minutes chart is showing a bull flag.
  • But this can breakout on either side.
  • for confirmation an upside breakout should also take out the day high 5508.
  • If it breaks the support line it should break day low.

Nifty time frame analysis

  • Nifty weekly chart is showing negative divergence
  • Daily chart stochastic is showing momentum towards upside. If stochastic enters the overbought zone before price reaching the recent high chances of a break down is high.
  • Nifty futures hour chart is also showing negative divergence.

Nifty daily chart analysis

  • Nifty corrected nearly 200 points from it s recent high but the index did not close below 50 DMA. 
  • Yesterday nifty came back to close above 20 DMA.
  • IF Trades and closes above 5492 nifty may revisit recent high of 5549.

S&P 500 Analysis after closing bell

  • 3rd chart shows the negative cross of 20 week moving average below 50 week moving average. So for the longer term things look bearish.
  • For the very short term this index may get to 1100 where it may find resistance. But if the index manages to cross the weekly resistance line a good rally will happen.
  • We have a channel breakout in daily chart and a close near the high of the day which should be positive for the short term. 
  • Index closed right at the 50 dma and 20 dma. Trading above these moving averages will be very positive for the bulls. Failing to cross 50 DMA will result in a pull back.

Dow jones end of day analysis

  • 3rd Chart is the weekly chart. Price is trading below 50 and 20 week moving average.
  • Today's momentum and the way the index closed may take the index above these weekly moving averages. 
  • One more important thing is the pending negative cross in the weekly chart of 20 week ma below 50 week ma.. So even if the price moves above these MA the high may be limited to 10500 - 10600 area.
  • The 2nd chart is the daily chart, price has closed above 50 DMA. But just below 20 DMA. If index has good momentum in the following day's 20 DMA may move away from 50 DMA so that the negative cross in daily chart does not happen.