US PREMARKET OUTLOOK: 08MAY 2009

The spirit of momentum waned in the face of that 'stress test result'.  Profit booking happened on big volume and suddenly there appear some sharp divergence in momentum indicators. Bearish engulfing pattern on DOW and SPX could also be a matter of concern, but these candles do not have significant impact in a strong trend. The uptrend is intact so far and any good data could boost the markets ahead.

Data listed for today is Average Hourly Earnings, Nonfarm Payroll and Unemployment rate(Please see the economic calendar at the bottom of this page).

This data does have an impact on the markets in either direction and it is a day of cautious optimism for bulls. It would have to be seen how markets give closing to the week.  This weekly closing would help us determine the further trend as ususal. Our weekly update gets published here by Sunday. Watch out!

DOW(8410): Yesterdays high point was 8577 and low point 8358. For today, these two points would hold the key. A close below the low point should signal towards impending weakness in the short term. Similarly, a close above or near the high point should signal for fresh longs.  Favored view is that the US markets still have some steam left in it to move higher in the days ahead. 

S&P500(907.39): The high point on this index was 929.6 and the low point was 901.4. Trade according to the strategy given for DOW above.

At the same time it would also be prudent to have a look at the outlook of yesterday as given below.  Or click here to read it.

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