DJIA and Nasdaq 100

U.S. stocks fell this week, sending the Dow Jones Industrial Average to the biggest loss since 2008, as the Federal Reserve said risks to the economy have increased and concern grew that policy makers will fail to spur growth.

The S&P 500 fell 2.9 percent on (Wed) Sept. 21 and 3.2 percent the next day (Thu) after the Fed said it will replace $400 billion of short-term debt with longer-term Treasuries to spur growth.

It is not over, and the likelihood of US recession has clearly risen.

Technical Chart, Weekly:

I am expecting the melt down to 9500 region upon breakout to the downside.
Upside resistance 11720 will not be re-visited again and the breakout is happening SOON.

Daily Chart:

Market risen on last Friday as Europe governments agreed a permanent rescue fund.

The European Central Bank may step up efforts to ease financial-market tensions, including offering banks 12-month loans, Governing Council members said. About $3.5 trillion was erased from global equity values this week before yesterday.

From a higher time frame, market has reached 2L, consolidation is about to finish with DJIA trading near to its key support (August-2011 low), breaking below this low will target 9700 for October 2011.

With ECB effort, and weekend's meeting, I am expecting a rebound to 10850- max 10915 region to happen on DJIA.  YM resistance 10800.

Hunt for short at this level and let's ride the late south train together.

Related News: http://news.businessweek.com/article.asp?documentKey=1376-LRZTSY07SXKX01-6K828SC6SK85B3V3BCBOS4M4F1


Nasdaq 100

Market is mercy-less for the opposite traders.
Imagine the impact of how fundamentals move our trading account, from 1 end, to another end.

The ECB announcement has lifted Nasdaq 100 from 2135 region and formed a bullish reversal pattern on daily chart. Sames goes to NQ.

I expect market to pull up at least 50% for Nasdaq 100, return to 2260 region.

Short Term Trading: Bullish
Monday, long at initial shadow (-20 index points), eg. Long NQ support at 2175 SL last friday low or 2135 target 2260, or closed by end of day.

Position Trading: Bearish
Rub our eyes, clean up our spectacles and observe for reversal candlestick pattern.