Monday, November 12, 2012

DJIA and Nasdaq 100

for week Starting 12-Nov-2012

Economic Data release: US Retail Sales Report (Nov 14), FOMC Meeting Minutes (Nov 14)
Short-term effects of super storm Sandy, longer-term fears about and consequences of "fiscal cliff" will make U.S. economy unstable, tough to predict

DJIA edged up 4.07 pts. last Friday, to 12,815.39 pts. at the close, Nasdaq 100 gained 9.29 pts. to 2904.87 at the close.  For the week, DJIA fell 2.1% and Nasdaq 100 lost 2.6%.

News are about election, post election sell off, then fiscal cliff - the agreement on spending cuts and tax increases that are due to kick in early 2013.  There is not election to distract us, and fiscal cliff fears, Sandy aftermath may send market lower in coming weeks.

Ever since we mentioned here that DJIA weekly chart has confirmed the bearish candlestick pattern (related post here)
Oct 1 :
Oct 22 :

Market has posted series of black candle on daily chart and has reached my target 12800 with a slightly longer tail on weekly chart.

Daily Chart:
Friday candlestick pattern may suggest the beginning of retracement in this bearish market.

Technically, Market shall return to 13150 pts. (also EMA20) – with the fundamental woes, we might observe the immediate resistance at 13000 (1/3 retracement level, also EMA50 in 4 hour chart).
My trading preference is to go long, at initial shadow, and close EOD.

Daily Trading setup (initial shadow : White shadow 3 pts.) entry could be around 12825 pts., SL 12775, TG 13000 or close EOD.

Nasdaq 100

Similar to Dow, we expect market to found support around 2560 pts. (2/3 Fibonacci retracement level from 3June low - 16Sep high).

Resistance 2640 pts., Strong resistance 2660 pts.

Daily Trading with initial shadow – Long 2584 SL 2579, TG 2620 or close EOD.

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