Sunday, April 11, 2010

Update on The Ultimate Momentum Signal - 12h April, 2010

  The Greek Tragedy, Act I Over, But There Is No Act II ...! ( For Now... !)

The markets can be very fickle. It almost never moves up without some down days in between many up days.  Before last Thursday, the markets achieved four up days. So it was waiting for a reason for a small correction. Then came the opportunity to enact the Act I of the long playing Greek debt tragedy. But there wasn't any Act II ( follow up selling ) on Friday. (Well this is valid for a short time. If the opportunity arises again, the markets may again consider it...! ).  Instead it bought off and closed at 5367, almost at at the same area it closed  for most of the last week.

Nifty Futures - Daily Chart

The technical position of the market remains the same. The uptrend is still in continuation and the Nifty futures are still trading in the upward moving regression channel. The supports too remain the same.

Meanwhile, the major international markets are also trading in a very similar manner. The US S&P 500 closed at a new 2010 high last Friday. Please see the chart below.

US S&P 500 - Daily Chart

The CBOE Volatility Index ( VIX ), which shows the implied volatility  embedded in the S&P 500 options, too closed at a post June 2007 low of 16.14. The low close of the VIX indicates the lower risk perceptions by the investors and traders  about the equity markets at present. Hence, the slow and grinding rally may continue for some more time.  

CBOE VIX Index - Daily Chart, Period Feb. 2007 to April 2010

The Updated Momentum Signal Spreadsheet

The updated spreadsheet showing the Momentum Signal as on the close of  9th April 2010, is given below.

Projected Momentum Signal Close Values

The projected levels of closing values corresponding to momentum shift / neutrality / continuation as on the close of trading on 12th April, 2010 are given in the table below. The table also include the projected closing values of BSE Sensex corresponding to momentum shift / neutrality / continuation.
  Please click on the table to enlarge. For more info on the above table,  please click here.

The closing values required for the continuation of the uptrend have stayed static. The triggers for a downtrend have moved upward. Readers of this blog may please note that any momentum indicator may generate  many whipsaws in the markets wherein the long slow moving rallies may takes place. Accordingly, the Ultimate Momentum Signal is also susceptible to whipsaws if the present condition continues. However, the third method of entry may give better returns at such times.
Cheers and Prosperous Investing and Trading !!! 

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