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Thursday, April 26, 2012

Bad news is good news in this manipulated market

Once again it was a series of bad news from rising jobless claim to overnight news from European bank or earning miss from big companies like XOM, POT, DOW which doesn't happen often but stock rallied 135 point. The reason is simple bad news is good news as the hope of QE3 is back and its kept alive Mr. Free Money Printing Manager Ben Bernanke. This market will never be normal again. Just follow the market or avoid this market completely.


Based on the chart, market was expected to open higher as Dow, and S&P500 entered into bullish zone yesterday. But at today close, Dow and S&P500 are back into bearish zone. So we can expect a down day tomorrow and market is most likely to sell off. Remember on a down day, manipulation begins between 1.30 pm and 2.30 pm. 


The first level to check in Dow for upside is 13227 followed by 13297 which is important break point for the upside. While for the downside, Dow needs to break 13136 followed by 13046.

The first level to check for tomorrow in S&P500 for upside is 1413 followed by 1419 which is important break point for the upside. While for the downside, S&P500 needs to break 1386 followed by 1382. Use technical indicator 20 (simple moving average) sma and 50 sma to better visualise uptrend or downtrend of this manipulated market. If 20 sma crosses 50 sma and 20 sma is up, then the stocks will go higher, if 50 sma crosses 20 sma and if 50 sma is up, then stocks will go lower.

Dow continued its bullish sentiment from yesterday but at the close dow is back to bearish zone unless there is big  leg up in future.

1 month Dow chart is now in bullish zone 

S&P500 also carried bullish sentiment from yesterday but at the close its in bearish zone. So S&P500 is likely to open low tomorrow unless there is big leg up from future.

1 month chart of S&P500 is still in bullish zone

GDP (2.5% is expected, previous month was 3%, higher will be bullish sign, while lower will be bearish sign for stock market) 8:30 AM ET

Employment Cost Index (0.5% is expected, previous month was 0.4%, higher will be bullish sign, while lower will be bearish sign for stock market) 8:30 AM ET

Consumer Sentiment (75.8% is expected, previous month was 75.7%, higher will be bullish sign, while lower will be bearish sign for stock market) 9:55 AM ET


Earning to focus before market opens: COV, F, HMC, IMAX, IMGN, IP, MRK, NVO, PG, SNY, GT, WY, VFC, TRP

For Long term keep SNDK, PCX, RVBD, INFY, NOK in your watchlist.


Stocks opening lower tomorrow: MDRX, DECK, 

For day trading watchout AMZN, SBUX, DECK, BIDU, AAPL, PCLN, MA, FAS, FAZ, TZA, TNA, TVIX, XIV, SVXY, UVXY (remember volatility is not a long term investment option use it for strictly day trading). Also Vix is in contango at the moment, so any rise in it would mean it will sell off by close and end up lower then initial rise in VIX.

Be a day trader at the moment and don't hold anything overnight. 

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