October 28, 2012

USA and India

As promised, I am back with second installment of my 'NIFTY Comparison with rest of the World' posts. We had already seen Europe and India at the start of the month and in fact it now warrants a re-look at the charts in that post. Will do that sometime. Today, let us see what the US Markets have in store for us. As all of us know that US continues to be largest and most influential market around the World and I do not see any short or medium term threat to its dominance. Any trader or investor anywhere in the World cannot ignore signals from US Markets and we have always been taking cues from it in this blog. Today though I am afraid that I do not have all the positive news for the bulls.

Like Europe, US also has a maze of various indices which you can look at and refer and trade upon. Not only US Dollar, Gold, Commodities, Shipping, Minerals, Oil, etc is decided in US Markets but hosts of Bonds, Money Market Instruments, Exchange Rates and all that has origin and maximum trading there. US Markets also track a variety of sentiments, housing prices, jobless claims and what not. Get the Alice in Wonderland feeling? What we know of them is just the start of the rabbit hole.

Anyway, we will only see the three most directly impacting indices today. Just to keep it simple.

S&P 500

Upward channel is broken as well as 50 Moving Average has been taken out convincingly. Series of higher highs and higher lows is also violated. Now if any of you follow cycle theory then you will know that it is not unusual for corrections in a left translated cycle to go below the earlier low... or in simple terms it may not be a sign of sure shot correction but it still is a threat and considerable at that. Caution advised.

Positive thing is that 200 MA is still at some distance and a close eye to be kept at that level. A bounce above 1435 will give some respite for Bulls though I will not count on that with all my bets.


Quite the similar story here too though it is little more bearish than S&P 500. Both these indices are a close reflection of NIFTY in composition and both are showing signs of stress. Most serious signs of problems though come from NASDAQ Composite which may not affect NIFTY as much and as direct as these two.


NASDAQ appears to be in serious trouble here. It is extremely close to 200 MA and looks to be in downtrend. It is also a victim of below expectations results from Google, Microsoft, Apple and other technology companies. Many of these companies also hold the key to general sentiments of US Investors and hence they do affect everything else indirectly. NASDAQ may bounce from its 200 MA and may go up to upper end of the channel at 3050. Beyond that, it is difficult to say the direction of next move.

Intriguing signals from US and surely interesting times for NIFTY. I am not really interested to drawing any conclusions here for NIFTY and will leave it to you guys to comment on. So let me know what you think of these charts and its possible effects on NIFTY... Will be very happy to have a dialogue on this so don't disappoint me.

Happy Trading as always.


  1. Excellent post !!! thanks

  2. Nifty is hovering between 5650-5720 for last few days... dont get any clear trend.. may be US elections will set pace in one way..

    Many thanks for the post.. Apologies for the late reply


  3. Good post ... Et thanks

  4. Hey sweety nice post.... what way is the market headed now??? Support resis levels pls

  5. Nice information.. waiting for ur next post

  6. Trader saab ..kahaan hai aappp.. no post ,,, no acitvity here.... post ur view on market yaaarrr

  7. Great blog and all, but i have noticed you are a day trader. Have you as a hobby tried option trading ?

  8. NASDAQ is really going to be in problem. But one thing is for sure that we should forecast any of it's condition because in trading world nothing can be usual.
    Options Trading