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Magikk - Luckki 28

Post a Comment March 12, 2009 – 9:02 am |   | Permalink |  Print This Post |

MAGIK Numbers

Daily and Weekly Dow Jones | FTSE Analysis

By Mr. Magik

12 Mar 2009 | Edition 28

We finally got our bounce from the abyss; we made a new high from yesterday and also a higher low. Today’s action was mainly digesting yesterday gains, essentially weaker bulls passing on the baton to stronger hands. However a word of caution would be all rallies are guilty until proven innocent. The chart formation today was good to say the least whereby we got a smaller volume on the pullback and an attempt to rally in the end. We closed flat for the day indicating even at this level there is a monumental war between the bulls and bears never mind at a higher level. There is so much damage done to the charts in the recent crash that many resistant levels lie overhead to say the least.

We see a high of 7250 -7400 for any rebound in the next week to be the highest we expect to attain. Our plan is to remain long for now and then turn short to ride it down again when panic sets in again. We believe now that the markets will be heading lower into the summer after this bounce. The saying buying in March sell in Easter is to be remembered.

Dow

The Dow closed at 6936 on Wednesday. Indicator is neutral we can’t tell how it is going to bounce tomorrow. My instinct is for this to weaken further before a rebound.

We are expecting the Dow to trade within a range of 7010 (daily R1) and 6860 (daily S1). Swing is neutral at 50%; futures after the market closed on Wednesday was negative on Dow and was down 1%. We expect the Dow to trade within the range or drop further on impulse to S2. No major overlap.

Trade plan

Half strength anchor Buy at 6860 target 7010 stop is 6770. Strong buy at 6790.

FTSE

The FTSE index closed at 3693, in a neutral position. The expected trade range is between 3755 (R1) and 3645 (S1). FTSE showed signs of weakness during yesterday’s trade despite Dow being up on opening. I see this as distrust and predict the latest rally on Dow to fail. The mood on FTSE is a lot more sombre than previously and is now awaiting Dow to pull it out of this rut.

Trade plan

Half Buy 3645 target is 3755, stop is 3580. Strong buy at 3610 weekly pivot, this should hold.

Best to your trade,

Mr.Magik