U.S. MARKETS TODAY: 05MAY 2009

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DOW (8427)

Short Term(ST) is up and Medium Term(MT) trend is also up. ST traders may hold the existing longs with stoploss at 8300. ST traders may initiate fresh long positions on declines upto 8310 with stop loss at 8300 on closing basis. ST traders may desist from initiating fresh longs below this stoploss mark. Traders with risk capacity may buy below here for very short term gains with stop at 8190.

Immediate resistance and target is 8524. Book some profit around this level. Once above here then the next medium term target would be 9000+.

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S&P500 (907.24):

Trading volume on this index has been above average though no fireworks there. ST trend and MT trend is up obviously. It moved past our given crucial resistance at 900. It implies that this index should move towards 1040 in the medium term. But given the overall picture, a sideways trend with positive bias may ensue over the next days until below 960.

ST traders may hold their existing longs with stooploss at 892. ST traders may also initiate fresh long positions until this mark is holding on closing basis. Desist from initiating fresh longs below here. Traders with risk appetite could buy around 887 and 882 with strict stop at 875.

Immediate resistance and target is 944 and then 960.

The last hour trading yesterday suggests that profitable and weak short positions are being squared off. The overall picture is signalling that there is no fresh buying for value. However, the trend is up and trend is freind. Bears would not dare to venture out so soon. All the indexes have left behind multiple support which do not seem to be taken out soon. Favored view is that the DOW may stay sideways above 7800, if the sentiment is negative, because the long term view still is negative.

CBOE Volatility index (VIX) cooling down suggests that the bulls are at the controls in the medium term. It is only the short term traders who should always remain vigilant in such situations.

(The disclaimer applies: It is not an invitation to trade in the markets. Use your own discretion as the risk of losing money is involved).

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