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Tuesday, May 1, 2012

ECB fine tuning operation caused today's rally and not ISM

If you have been following my article, I alerted about today's rally on Sunday as today ECB was going to print money. Today's bullish market was all set up in late yesterday rally which happened at 2.30 pm. Since the volume is low, Big institutional investor are playing it smartly as they don't want individual investor to make money. The market was a nice trap for bear, as it started with sell off but the market was all set for rally. As soon as ISM number came out market jumped 60 point in just 1 second. If you check past 5 month data, stock market have rallied every Tuesday when ECB prints money and only few people knows about it. Media is also keeping it low profile to favor bigger individual investor. You can read further

Tomorrow market is expected to open lower as the market entered bearish zone by the close but it depends on ADP data. The first level to check in Dow for upside is 13295 followed by 13338 which is important break point for the upside. While for the downside, Dow needs to break 13265 followed by 13193.
The first level to check for tomorrow in S&P500 for upside is 1415 followed by 1420 which is important break point for the upside. While for the downside, S&P500 needs to break 1400 followed by 1393. 

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. In the chart red circle is bearish sign, blue circle is bullish sign. Green line is represented by SMA(50) and red line is SMA(20), while blue line actual stock value.
Dow begin the day in bullish zone which was set in yesterday's late afternoon rally. SMA(20) was above SMA(50) which is bullish sign marked by blue circle, while at the close, SMA(50) is above SMA(20) which is bearish sign. So Dow is expected to open lower tomorrow but ADP data is also important.

1 month chart of dow is bullish but now 3 month chart is bearish.

S&P500 started in bullish zone which was set in yesterday late rally, but at the close, S&P500 is back into bearish zone, which means tomorrow market would be down.
1 month chart of S&P500 is bullish but 3 month is now into bearish zone.
 Eventhough economic calendar doesn't matter.

MBA Purchase Applications 7:00 AM ET

Challenger Job-Cut Report 7:30 AM ET

ADP Employment Report (183k is expected previous month was 210k, higher is bullish sign, lower will bearish sign) 8:15 AM ET

Treasury Refunding Announcement
9:00 AM ET

Factory Orders (-1.6% is expected previous month was 1.6%, higher will be bullish sign, lower will be bearish sign. If factory order turns negative we'll see lower GDP for May as factory order is one of the factor to calculate GDP, and it could be below 1.5%) 10:00 AM ET

EIA Petroleum Status Report (Inventory level up is bearish sign, inventory level down is bullish sign) 10:30 AM ET

Earnings before market open: AGN, CMCSA, CBE, CBS, HSNI, ICE, MSO, MA, RRD, SKYW, UBS, VNR, MRO

For Long term keep DECK, HLF,  PCX, RVBD, NOK in your watchlist.

For day trading watchout 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).

Just follow SMA(20) and SMA(50) together to better visualise this market. 
The game is on, either you be smart and think out of box or leave this market.

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