DOW daily chart shows that sideways correction must have ended. The same must hold for S&P. Prices have stalled and made sideways movements that imply correction. However we must also take under serious consideration the possibility of a larger correction.
Dow @ 13000 and S&P @ 1385 are my important supports. A daily close below those levels will mean a larger correction is at hand at least. Dow would test 12700 and S&P 1340. Tomorrow we have important numbers being announced (Unemployment rate and Non-farm payrolls).
Startegy
So what strategy should be followed? I personally bought puts with 1340 strike and I'm long cfds with close by stops. I'm long in AAPL, but sold half my position at 628 and have a stop at 597$. If this stock breaks my support levels then I would look to buy it back below or near 550$. Friday will probably be important as to what the market will do. I think momentum will be built after the macro announcements. I favor long trades but I will be prepared for a break of support levels. European indices and EURUSD look much weaker than the american indices and have started to decline more than S&P. This could be a clue to what can follow.
Gold has also broken support and move below the 200MA and can move towards the lower green channel as long as it is below 1680-1700. It can be at the start of a move downwards towards 1500.
PS. I will come back with regular updates with charts at the 17th. I will be away on vacation due to Easter and will be watching the markets as I think we are in a critical juncture. Will try and update when I see something worth noting via twitter, or for larger updates I may post something in the blog but with no charts. So if you want to keep in touch via twitter, you can follow me @alexanderYf or you can just visit the blog and read my twitts in the widget at the side of the blog. See you all in a few days...
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