Nov 102008

On November 3, a day before the US election, I wrote that the S&P index was still in a downtrend and we should use any recovery to the prior high of 1045 to get out of longs. I also suggested that should we reach 1136, we should turn short there. As it turned out, the high was only 1005. Today the front page news is all about the huge Chinese economic stimulus package ($586 billion). Asian equity markets have all reacted positively. The SNP futures are up nearly 20 at the time of writing. So what does all this mean? My guess is we could end up with a complex pattern that will be hard to predict. I stick with the proposition that if we reach (the now revised resistance of) 1129, we should turn short, of course with suitable stops. However, I do observe some resistance even at 1015. But I would not turn short there. Am I sure we will get this rally? No. All I am saying is there is still a chance for this rally, and if it happens I will sell into it.

Related S&P500 links:

Was that the stock market bottom?
S&P500 and Citi
Fifth wave extensions can make you rich!

What is a significant rally in the stock markets?

Harmony in markets: S&P500

S&P 500: Potential Ending Diagonal Triangle

Ending Diagonal Triangle in S&P500?

S&P500 Elliott Wave update

S&P500 index: is a top already in?

S&P 500 update: where is the top?

S&P500 continues its rally

S&P500 remains resilient

S&P500 ready to dive?

S&P500 Update: May 19, 2009

S&P500 Elliott Wave update:21 May 2009

S&P 500 breaks higher: update 2 June 2009

Nov 092008

A few days back (23 Oct. to be precise) I posted the chart of the Nasdaq top 100 index while referencing to Trader Mike’s post of a potential symmetrical triangle in the Nasdaq Composite index. I figured that it is time to take a look at that chart again. There are two charts posted here and you might find it worthwhile to spend some time studying both. Basically I still think we will see around 1140 in the Nasdaq 100 ( which roughly corresponds to 1400 in the composite). The rest of the comments appear on the accompanying charts.

Nov 062008

I warned you folks about this chop in Sterling Pound . In just 40 minutes, Sterling had dipped from 1.5830 to 1.5720 and raced higher to 1.6020. What should one do in such a market? The most sensible thing to do is to go out for a snack. Why get involved in the middle of a deadly game? Wait to see if we get to 1.6450, and maybe sell a small amount there. If it goes down directly, well, nothing is lost. I always believe that money not lost is money gained. Enjoy your weekend. Ramki.

Nov 062008

I hope you took profits on Citi above $14.50, locking in a 25% gain. I suspect that the current decline will be the final push, the catharsis! (Here is your chance to click on this word and check its meaning!). Unlike the previous trade, we should aim to hold the stock for longer. In time, we will see the price double. Don’t be alarmed if it falls more than my suggested target. (Remember, I originally said we could see it down to $10.40. Refer this post ).  We are turning  medium-term investors in Citi now! Good luck!

Nov 062008

On 3rd November I warned you to get out of your Reliance Industries holdings near 1480. (see the post here.) I think the stock will bottom out between 855 and 905. However, being small investors, we should start buying from Rs 925. Sure, a lot of bad news could still come from India. But at this level, Reliance will be a great buy for the medium term.