The end of a sport?

S&P screamed through resistances in a big rally on Friday. The reverse head and shoulder pattern is now firmly in place. The S&P has fulfilled all the requirements of a classical RHS. It broke above its neckline on 23rd July, came close to retesting it on 17trh August and now has rallied strongly to a new high. This pattern implications are for a rally to 1200 at the least.

Well the reason for focussing so much on the US is because there are currently two drivers to world trends in equities and commodities viz US and China. We have talked about China in the past few days. It is important to note that the US still has some relevance left in the scheme of things.

Commodities have seen a rally on Friday with Copper continuing its incredible run and Crude continuing to remain strong. As discussed last week, SHCOMP (Shanghai Composite Index) could be a lead indicator to the world trends. So we will track this index very closely.

As far as Nifty is concerned, a rally above todays first hour high would signal a change in trend in our RSI 50 system. (It had turned into a buy on Friday which will be acted upon today). The smaller time frames like hourly are already in a buy mode. It would be interesting to see whether we go through the first hours high. The other thing of interest is that Nifty is finding support from a trendline connecting the March and July lows which is a good sign for the bulls. On the flip side there is a strong resistance at the 4730-4750 levels. The range between the overhead resistance and trendline support is contracting on a daily basis leading to this largely trendless activity in the Nifty in the last few days. This trendless activity will continue until one of the two is broken.

I love it when I can fill up pages within minutes. Hopefully the sentence formation and the syntax is right. That is most important. It would be bad form to not write well. Whether the views on markets are well formed and correct is besides the point.

And before we part for the day, we talk about what would have been, until a few years back, an incredibly satisfying event for me. The English win over the Aussies in an Ashes series. It is sad testament of how much cricket has declined, that I have not even bothered to watch the matches closely. The 2005 series was another matter and I had really enjoyed watching all the Tests. But both the teams have declined horribly and watching this series was only slightly better than watching Bangladesh play Zimbabwe!!!.