Trade, Live and Thrive: 05/26/12

Saturday, May 26, 2012

CNX Nifty 50 - Triple Screen 'Technical Analysis' - Week: 21 May to 25 May, 2012 - Post consolidation moves..

Learning from the Past Week:

The Nifty stayed above the Fib61x on the EOD, and the 34 EMA crossed bearishly below the 200 DMA.

Both the above were studied by us last week, in 'Looking Forward' (click)

We had also smelled 'consolidation' in the air - our senses were accurate in that too.

Where after the consolidation? Up or Down?

Nifty 50: Long Term View (or) Month Chart, each candle is 1 month's price action (or) EOM Chart:

CNX Nifty 50 - End of Month (EOM) Chart - 25 May, 2012.

Nifty EOM depicts the bearish 'Three Inside Down' and aftermath, in the last 4 candles (click)

The fourth candle shows us the real take for the Bears.

The S&P 500, also displayed the very same pattern (click), The Nifty is one candle ahead in the fall.

Nifty 50: Medium Term View (or) Week Chart, each candle is 1 week's price action (or) EOW Chart:

CNX Nifty 50 - End of Week (EOW) Chart - 25 May, 2012.

Support on the 200 DMA is repeated last week.

After 4 red weeks we have a green week - Dawn?

The long tail of this week's candle, indicates Bull resilience.

Channel Median contains the close.

Nifty 50: Short Term View (or) Day Chart, each candle is 1 week's price action (or) EOD Chart:

CNX Nifty 50 - End of Day (EOD) Chart - 25 May, 2012.

The 34 EMA/200 DMA cross is shown in the first circle - also seen is the 50 EMA.

We shall replace the 200 DMA and 50 EMA with SMAs for simplicity, from next week.

With 200 SMA at 5072 and 50 SMA at 5154 on Friday last - Current Golden Cross can continue or we have a Death's cross, if these MAs close the 80 point gap, and cross each other.

The second circle shows the consolidation on the last 5 candles (1 week), above the Fib 61x.

The Bullish cross of the 5 EMA above the 13 SMA, can happen on Monday with a close above 4909.

The MACD histogram has finally peeked above the zero line as seen in the third circle.

Looking Forward into the next Week:

Staying above the 5 EMA on the EOD - the Bulls can take the Index up to the 200 DMA before settlement.

Falling below the Fib 61x on EOD screen or the 200 DMA on EOW screen - resumes the down trend.

Neither of the above means, more consolidation.

Bulls are current favorites.

Weekend updates shall be up.

BSE Sensex - Ichimoku Study - Week: 21 May to 25 May 2012 - Pink Power for the Sensex

.....Regulars can skip below and go straight to the chart......

Introduction / Preamble can be read at this link (click).

Quick Reference :

Chikou Span - pink line,

Kijun Sen - blue line,

Senkou Span A - black line,

Senkou Span B - grey line,

Kumo - grey shaded area,

Tenkan Sen - red line.

Useful resources (free) from the Web:

http://www.freestockcharts.com/

http://www.kumotrader.com/ichimoku_wiki/index.php?title=Main_Page

Last 7 Signals seen on BSE 30 - Week Chart (EOW) as on chart below:

1. The Kijun sen cross: Weak Bullish Signal (K)

2. The Flat Kumo: Bullish Signal (Ko)

3. The Tenkan Sen/Kijun Sen Cross: Weak Bullish Signal (T)
4. The Kumo Breakout: Bearish Signal (B)

5. Chikou Span Cross: Strong Bearish Signal (C)

6. The Kijun Sen Cross: Strong Bearish Signal (K)

7. The Tenkan Sen/Kijun Sen Cross: Strong Bearish Signal (T)

BSE 30: Medium Term View (or) Week Chart (or) EOW with the Ichimoku Cloud:

The BSE Sensex 30 - End of Week Chart - 25 May, 2012.

Last week we anticipated the Pink Chikou Span, Crossing the Price line (click) - this happened 'A' on Monday.

This Chikou Span Cross is a Weak Bullish Signal - Weak because it occurred below the Kumo.

We have a green candle after 4 red ones in a row.

Bulls have held back the Bear Onslaught.

Conclusion:

Breaching the red Tenkan Sen line is the next task for the Bulls - this gives them the trend.

We shall watch for that.

The Dow Jones - Ichimoku Study - Week: 21 May to 25 May, 2012 - Kijun Holds..

.....Regulars can skip below and go straight to the chart......

Introduction / Preamble can be read at this link (click).

Quick Reference :

Chikou Span - pink line,

Kijun Sen - blue line,

Senkou Span A - black line,

Senkou Span B - grey line,

Kumo - grey shaded area,

Tenkan Sen - red line.

Useful resources (free) from the Web:

http://www.freestockcharts.com/

http://www.kumotrader.com/ichimoku_wiki/index.php?title=Main_Page

Previous 5 Signals seen on DJI 30 - Week Chart (EOW) as on chart below:

1. Chikou Span Cross: Strong Bullish Signal (C)

2. Tenkan Sen/Kijun Sen Cross: Neutral Bullish Signal (T)

3. Kumo Breakout: Bullish Signal (B)

4. The Flat Kumo: Bearish Signal (Ko)

5. Tenkan Sen Cross: Weak Bearish Signal (red line)

DJI 30: Medium Term View (or) Week Chart (or) EOW with the Ichimoku Cloud:

DJI 30 - End of Week Chart - 25 May 2012

This week we had a Green candle as seen in the chart above.

As concluded last week - the Kijun Sen (Blue line) - gave the Bulls Support.

Bulls however did not reach the Tenkan Sen (Red line) their first point of strength.

Oscillator continues to tick down.

Conclusion:

Index, keeping above the Kijun Sen, will keep this screen in neutral zone.

Price below the Tenkan Sen, the trend remains with the Bears.

First sign of reversal is seen when the Bulls breach the Tenkan Sen.

We shall watch for that.

S&P 500 - Triple Screen 'Technical Analysis' - Week: 21 May to 25 May, 2012 - Midpoint Holds

Learning from the Past Week:

We came into last week, with the market deep in the red.

As suggested last week (click) - the Channel Mid point held the Bears.

The MVWAP 34 on the EOW, also gave some solid support for the Bulls.

We had the Bulls smile with a green candle, after three red ones - Bingo!

What's next - up or down? Lets see the screens....

S&P 500: Long Term View (or) Month Chart (each candle is 1 month's price move) (or) EOM Chart:

S&P 500 - End of Month Chart (EOM) - 25 May, 2012.

The Middle line of our channel, stopped the Bears last week.

Bulls emphasized that they own this screen - with last week's action.

Closed the week above the 13 SMA, and below our other MAs.

Last three candles show a cool example of a bearish 'Three Inside Down' (click) even now.

S&P 500: Medium Term View (or) Week Chart (each candle is 1 week's price move) (or) EOW Chart:

S&P 500 - End of Week Chart (EOW) - 25 May, 2012.

Perfect landing on the MVWAP 34 and a nice bounce from there.

This screen is back to Neutral - with the Bulls having the last word.

Moving above 1333 would put life into the Bull action next week.

Bears look at breaking the MVWAP 34 on the downside.

S&P 500: Short Term View (or) Day Chart (each candle is 1 day's price move) (or) EOD Chart:

S&P 500 - End of Day Chart (EOD) - 25 May, 2012.

Bulls started the week with a Bang, and finished with a whimper.

Close below the 5 EMA, keeps this screen officially red for now.

Breaking the 10 EMA resistance and keeping above the Blue line should keep the Bulls in play.

Good show on the MACD Histogram after last week's + divergence.

Looking Forward into the next week:

Bulls have pulled one back.

Keeping it above 1300 for month close would be important for Bulls.

Breaking the MVWAP 34 on EOW - would be the next task for Bears.

Bulls have staved off an imminent midlife crisis, with last week's action.

Now to follow up that action with some consolidation.

Welcome Read

The Trading methods used here are suitable for those who (like me) are always Learners in the World Market (never presuming Mastery).

One learns with 'Technical Analysis' using Moving Averages, Channels, Time frames, Pattern & Candlestick Analysis, Fibonacci, Ichimoku Cloud, Oscillators & other Technical Indicators.

To comprehend the Dynamics of any Market, Peer Wisdom suggests, that we show plenty of Patience, keep it real Simple and adopt tons of Discipline.

We therefore use the same framework 'Patiently' every week - 'Simple' Technical Analysis Tools are repeated - The 'Discipline' of keeping a Neutral view is maintained.

So welcome to my notes - posted here for my Friends and Family.

Some Quotes..

There are times when playing the stock market that your money should be inactive - waiting on the sidelines in cash - waiting to come into play. In the stockmarket - time is not money - time is time and money is money. Often money that is just sitting can later be moved into the right situation at the right time and make a vast fortune – patience – patience. Patience is the key to success not speed.

Jesse Livermore.

That's been one of my mantras - focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it's worth it in the end because once you get there, you can move mountains.

Steve Jobs.

Discipline is the bridge between goals and accomplishment.

Jim Rohn.

Favorite Quote

"Why do we trade?

To be sure, trading allows us independence, the opportunity to work for ourselves. Trading also offers the prospects of a lifestyle in which evenings and weekends need not be consumed by work. Some of us crave the competitive aspect of trading, doing fresh battle each day. Others approach trading as a puzzle to be solved, deriving a sense of intellectual achievement. Finally, there is income. A successful trader can make seven figures in a year—and many of the traders I work with are living proof of that.

So why do they trade? Once you have the money, all of trading’s lifestyle advantages could easily be yours. Needs for competition and intellectual stimulation could be met in so many other ways. Why do traders remain traders long after they’ve won the game?

The great professions are those that serve as personal playing fields. They are the arenas we choose to express and develop ourselves. In mastering a discipline, we cultivate self-mastery. In writing a poem or placing a large trade, we capture—in a single act—our vision of how we see the world at that moment.

The great occupations are great precisely because they are such meaningful playing fields. Long after we’ve earned fame and fortune, the calling remains to be more than we are, to return to the arena and do battle with our limitations. The profound urge to extend the human grasp is common to all the great callings. To run faster, to capture more beauty, to predict ever better: in no small measure, our work is our pursuit of the godlike, however fleeting.

Maybe it is our different images of the godlike that animate our career choices.In work we find something divine within ourselves. Whether as scientists, monks, or traders, we strive for those moments when we are just a little closer to perfection, a little nearer to immortality. That is why we trade"

.... Brett N. Steenbarger

Inspiration

The Parable of Talents...

14 For the kingdom of heaven is as a man travelling into a far country, who called his own servants, and delivered unto them his goods. 15 And unto one he gave five talents, to another two, and to another one; to every man according to his several ability; and straightway took his journey. 16 Then he that had received the five talents went and traded with the same, and made them other five talents. 17 And likewise he that had received two, he also gained other two. 18 But he that had received one went and digged in the earth, and hid his lord's money. 19 After a long time the lord of those servants cometh, and reckoneth with them. 20 And so he that had received five talents came and brought other five talents, saying, Lord, thou deliveredst unto me five talents: behold, I have gained beside them five talents more. 21 His lord said unto him, Well done, thou good and faithful servant: thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord. 22 He also that had received two talents came and said, Lord, thou deliveredst unto me two talents: behold, I have gained two other talents beside them. 23 His lord said unto him, Well done, good and faithful servant; thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord. 24 Then he which had received the one talent came and said, Lord, I knew thee that thou art an hard man, reaping where thou hast not sown, and gathering where thou hast not strawed: 25 And I was afraid, and went and hid thy talent in the earth: lo, there thou hast that is thine. 26 His lord answered and said unto him, Thou wicked and slothful servant, thou knewest that I reap where I sowed not, and gather where I have not strawed: 27 Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury. 28 Take therefore the talent from him, and give it unto him which hath ten talents. 29 For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath. 30 And cast ye the unprofitable servant into outer darkness: there shall be weeping and gnashing of teeth.

The Holy Bible: Matthew - Chapter 25.