Sunday, November 20, 2011

DJIA and Nasdaq 100

Every week when I look at the chart, I would ask myself, is my view still valid?
Will I see it differently this time?

And when I just about to start the forecast for the week, I start to doubt myself:
Why would I call for waterfall?

For those who followed my post, I think you may want to throw a stone. ^_< hahaha although last week market tumbled and we make some money, it doesn’t mean that we will be right all the time. I keep questioning myself again and again until I finally “decide” what I want to do next, I accept my forecast for the week, and whether market *really* move in favor, or opposite, It is not in my control. We always need to *decide*, and if we are right, we *catch*, and we *ride*. We always need to *plan*. A famous US cabaret style belly dancer – Sandra, she teach me to “decide”, and “plan” your next move. I remember mentor JC told me the same, “Fail to Plan = Plan to fail”. So, back to the week’s forecast, I may be right, I may be wrong. Let’s see! DJIA

Economic Data mixed, US economy starts to stabilize, with lower unemployment claims, housing start drops, producer price decline, and retail sale climbed showing mild demand… read our Weekly Report by Sifu.

It is not easy to forecast the market direction based on fundamental news… there are simply too many news and I don’t know which one to follow, I think many traders confused also. XD
So I stick to technical forecast and our PowerWave.

Daily chart: Consolidation. DJIA traded very close to its 200 days EMA.
4 Hour chart: market has traded below EMA50 which means the bullish sentiment has shifted to a lower gear.

For the past 3 weeks, DJIA was trading in a narrowing channel (symmetrical triangle), with DJIA traded below 11900, it signals the bottom support line has been compromised and it has temporary became its resistance. Check 4 Hour Chart.

We expect market to be quiet for the beginning of 21-Nov-11 week.
Resistance: 11900.
Support: 11680.

We favor to short at the resistance 11900, SL around 11960, Target at support 11680.
For YM on Broco Cont chart (last traded 11767): Short 11930, SL 12000, TG 11650.


NASDAQ 100 has fallen below the group support level 2280 and we expect the bearish sentiment to continue on Monday, next strong support for Nasdaq 100 is 2220 which is approximately 30 points away.

Daily Trading to Short at 15 pts. away from opening, Stop Loss 15 pts. away, Target 2225-2220 (to fill the gap in October-2011).


  1. The symmetric triangle consolidation was a tricky one last week, in that in showed signs that it could break to either the up or down side - but I think the overall trend did favor the down side over a reversal.

    This week is very interesting since we are at the lows of the trading channel and the US Congress "Super Committee" is still reportedly deadlocked on reaching an agreement to prevent big arbitrary cuts from being initiated in all sectors of the government.

    A failure to reach an agreement could be the catalyst to move the indices another leg down, while a last minute solution could spark a reversal.

  2. Love it so much Soulfire!
    Enlighten me on the fundamental :) hahaha