So far market has been rallying on the hope of that Central bankers will be easing on slowdown. China has already cut the rate twice in one month. ECB and BOE cut the interest two week back and Fed has already extended operation twist. Inspite of this, all the economic data is showing more weakness in the global economy. Stock market is still hoping that Fed will come up with QE3 in the July end FOMC meeting. This year, ECB has been carrying Fine tuning operation on Tuesday and that's the reason we saw major stock market rally on Tuesday. Whatever Fed decides in the fomc meeting but at the moment, stock market is set for further decline.
On analysis, head and shoulder pattern have been formed in Dow, S&P500 and Nasdaq and all the three index is expected to decline. Market is expected to open lower on July 23rd. There are few thing that can save this market one is ECB Tuesday's fine tuning operation and hope of QE3 from Fed fomc meeting. Without FED or ECB this market can easily decline 10 -15%. VIX is expected to rise in coming month, so keep VXX, UVXY in your portfolio.
Lets analyse the chart of Dow, Nasdaq, and S&P500
On analysis, head and shoulder pattern have been formed in Dow, S&P500 and Nasdaq and all the three index is expected to decline. Market is expected to open lower on July 23rd. There are few thing that can save this market one is ECB Tuesday's fine tuning operation and hope of QE3 from Fed fomc meeting. Without FED or ECB this market can easily decline 10 -15%. VIX is expected to rise in coming month, so keep VXX, UVXY in your portfolio.
Lets analyse the chart of Dow, Nasdaq, and S&P500
Dow 6 month chart:
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| Dow 6 month chart |
If we look at the 6 month chart, Dow has formed head and shoulder pattern and its expected to decline in coming days. 12741, 12615, 12506 are the biggest resistance on the downside. 12506 is the biggest resistance, if it breaks then Dow is heading below 12000.
Dow 3 month Chart:
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| Dow 3 month chart |
Dow 1 month chart:
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| Dow 1 month chart |
Nasdaq 3 month chart:
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| Nasdaq 3 month chart |
S&P500 3 month chart:
Bulls would like to see S&P500 break above 1369, and bear would like to see S&P500 break below 1355 resistance.
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| S&P500 3 month chart |
