$DJIA $SPX PREMARKET OUTLOOK: 07MAY 2009

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There was lot of fireworks on the U.S. markets yesterday and many short positions must have got squeezed out of the system.  The volume was very high and some fresh buying must have also taken place as some stocks gapped up with the help of better than expected employment change data and perhaps, the "last" worst news for BAC was out. Market players take such worst news in good stride 'if' the news is final in the series. 

Anyway, the mood is gung ho and the bears are back into their lairs in short to medium term.

S&P500(919.53)

It is latching on to its resitance at 920.  Having closed almost at the highest point of the day bodes well in the near term.  It has become a buy on declines since it moved past 900 mark. But the immediate term and short term traders should always observe caution at the tip of the wave.  Immediate support would be 911.5, 908.8 and 906. No fresh longs below911.5 for immediate term.  Short term traders can hold their long positions upto 900.  Risk appetite traders can put a stop at 893.  Short term goes awry on a close below 885.

Immediate resistnce in 920 area.  Targets beyond here would be 945 and 958 in short to medium term. 

DOW (8512)

This index stopped short of our given resistance at 8524 but did not close far below it.  Closing near it at 8512 is positive and the resistance would be easier to bust.  

Immediate supports are 8460 and 8422. Immediate term trader can buy the first support and with stop at the second one.

Short term long positions may hold as long as above 8370. Uptrend loses momentum on a close below 8245.

Immediate resistance is at 8524 and then at 8676.  The medium term target for this upmove could be 9000+. 

Disclaimer: This is not an invitation to trade in the markets.  Use your own discretion as it involves the risk of financial loss.

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