MLS Chart, page-489

The downside continues, what can stop it?

Yes MLS gained 2 pips to finish on 4c. Our volume was again low, just over 1.4m shares traded. Holding the fort, waiting for market to turn. Also good to see a 4 in front of sp, but we need to hold.

ASX Li stocks followed the indices. Of the 54 stocks that I track, average gain was 2%.

Overnight US Li stocks defied the drop in indices and most stocks were in green, a good green - average around 3%.


What next -

Yesterday I had said that most analysts were calling for further drop. They were right second day in a row. Indices fell for another day with SP 500 falling another 1%. ASX though gained 0.5%.

Chart perspective - Yesterday I had mentioned that the first resistance at 3780 on SP 500 was broken. I said we need to hold 3720 else we could go near 3600. We finished at 3719 - right at but below 3720, marginally, but shows how the numbers can come into play for those playing charts, as in this case. For upside, we need to hold 3720 now and move towards 3800.

Is the up rally still on? I had mentioned 3 numbers when we started rising - 3800, 3900 and 4100/4150. We crossed 3800 and 3900, and now have given up both. So it does not look good from that perspective though anything can happen.

From the major indicators perspective - 10 year yield not looking good as it is rising, Dollar index rising hence not good, job data yesterday not good, projected interest rate rise rising and not good. Only Volatility Index VIX is defying - yesterday it actually fell 2% even with indices rising - is it telling something?

Personally, after selling some shares yesterday have held the rest today. Somehow the ones I sold yesterday as was ahead in some (INR - 10%, LLL 20%, QXR - 42% - my buy prices are in the weekly report), prices have eased and if market moves up, hopefully I can buy back without any damage. Rest I wanted to hold, mainly hoping that if further weakness happens, prices won't go down much - yes, hoping.

So what will happen tonight? Tonight key Non-farm payroll and Unemployment figures - before the market opens. Direction will be provided by them to a very large extent. Its another binary event so anything can happen. We have to remember that Fridays are big days in US markets - big rise or fall. But recent job data has not been favourable for stocks and employment is running strong. But we do need some help from these numbers else we could go much lower. Last time PCE data came out all right. Although odds are not good, there is a chance that once again the data tonight may come out all right and we take back 3800 on SP 500. Wil that happen? Lets hope so. Enjoy your weekend and all the best.