Dow Makes a Doji

Dow Makes a Doji

With the US ‘armada’ and nuclear powered USS Carl Vinson stationed at South Korea, the message to North Korea is loud and clear: “Don’t mess up with USA”.

North Korea has so far very recently had two failed missile tests. Was it an act of sabotage or the result of the US deployed THAAD (Terminal High Altitude Area Defence) System in South Korea that disabled the missiles at the launch stage itself?

With the presence of the fleet of US Navy in the peninsular region, quietening of North Korea, who has been testing missiles and conducting nuclear tests for past two decades and who has been openly challenging its neighbours including USA and Japan, will lead to a tacit acceptance of intimidation, but the fact that two missile tests were conducted (whether successful or failed) despite the repeated warnings from the US indicates that North Korea goes undeterred.

US in turn has imposed sanctions and has asked its allies to cooperate.

My concern is that if these two missile tests would have been successful, what would have been the results. Would it have provoked the US naval fleet to intercept? Could this have led to a conflict and a subsequent war?

Meanwhile there have been reports and news about the mystic named Horacio Villegas who has prophesied about breaking of nuclear war on May 13, 2017. This prophecy is dated April 17, 2017.

On the front of the financial markets, all stock indices have made higher highs during the last week totally defying and going undeterred by the abovementioned geopolitical developments. None of the indices except Dow has made any candlestick pattern indicating bearishness, though all the technical indicators have shown divergence, indicating bearishness.

There have also been reports that Nifty is going to touch/ cross 10000 by December and that is just 7% away from the current level. Interesting enough!

Given below is the two monthly candlestick chart of Dow which has made a Doji in the form similar to a ‘Hanging Man.’ A Doji or a Hanging Man (slightly different from a Doji because it has a real body which is atleast half the size of its lower shadow) is formed at the top of the market. These patterns indicate trend reversal. While a confirmation is required on the candlestick charts to confirm bearishness, this time around a confirmation will perhaps be too expensive for the stock markets.

On the other hand, despite whatever the US influential bigwigs of the financial markets may have indicated about bullion, gold and silver are geared up for a long term bull run.

The author can be contacted at: riskadvisory@outlook.com.

DISCLAIMER:

These extracts from my trading files are for the purpose of education only. Any advice contained therein is provided for the general information of readers and does not have regard to any particular person's investment objectives, financial situation or needs and must not be construed as an advice to buy, hold and sell or otherwise deal in commodities, currencies, indices, securities or other forms of investments. Accordingly, no reader should act on the basis of any information contained therein without consulting a suitably qualified financial advisor in the first place.

NIFTY Update

An Update on Nifty

Since my last post on Nifty on April 5, 2017, a few significant geopolitical events have taken place, viz., the US unilateral attack on the Syria on April 6, 2017, dropping of the largest non-nuclear bomb on hideouts of ISIS in Afghanistan on April 13, 2017 and deployment of US strategic assets (anti-missile systems in South Korea) and Air Force and Military troops near the borders of North Korea under the guise of military drills/ exercises with the real intention to counter any missile launch/ attack by the North Korean regime.

Media reports say that a failed missile launch on April 16, 2017 diffused the existing tension. Can we conclude that a missile launch could have led to the break-out of a war or it could have caused a conflict in the region?

In March 2014, at the time when Malaysian MH-370 went missing in the South China Sea, Russia had annexed Crimea and in September 2014 the self-declared republics of Donetsk and Lugansk were being supported allegedly by Russia. However it was interesting to note that the vanished MH-370 hogged the media limelight for a very long period of time and the news of usurping of Crimea by Russia largely got under reported.

Was this under reporting deliberate? Was it because of control of media by the US administration? Is the media being controlled by the US administration directly or indirectly?

Is the missile launch by the North Korean regime more prominent at the present moment in comparison to previous years (North Korea has been launching missiles since many years)? Have the tensions in the South Asian region heightened now within a week’s time or these existed even earlier and had gone unnoticed or not felt by the media?

Is the media deliberately reporting now about a war like situation or creating a situation which is harbinger to a war?

To me the present situation pertaining to North Korea looks more like a James Bond movie or a sequel of Mission Impossible with the theme music playing in the backdrop trying to create sound effects to make the viewers of the movie sit on the edge while Mr. Bond or Mr. Hunt performs feats which perhaps even a Navy Seal may not be able to perform in real life. At the end of the movie everyone is happy with the entertainment without any real life violence.

To me it will always be a puzzle as to how the financial markets are able to time the events?

Here below are two strikingly similar fortnightly candlestick charts of Nifty indicating bearishness.

The author can be contacted at: riskadvisory@outlook.com

DISCLAIMER:

These extracts from my trading files are for the purpose of education only. Any advice contained therein is provided for the general information of readers and does not have regard to any particular person's investment objectives, financial situation or needs and must not be construed as an advice to buy, hold and sell or otherwise deal in commodities, currencies, indices, securities or other forms of investments. Accordingly, no reader should act on the basis of any information contained therein without consulting a suitably qualified financial advisor in the first place. 

NIFTY

NIFTY and BJP

Last month saw the euphoric rise of the BJP and Nifty emanating from a historic win of BJP in the Uttar Pradesh state elections thereby strengthening the party in the Upper House of the Parliament and whereby ensuring easier passage of bills henceforth.

The BJP win also negated the opinions of quite a few political pundits about the impact of demonetisation on the popularity of the Indian premier. Rather in extrapolation, the popularity increased from strength to strength, to the extent that the win has quietened quite a few quarters.

The correlation of the cause and effect relationship of the win, the demonetisation, the rise of BJP and the rise of Nifty can however not be established in the same manner as no one can ever establish the nexus between the political brass, media and the markets worldwide.

Nifty Charts

Nifty on fortnightly candlestick charts has formed a hanging man pattern which needs confirmation on fortnightly candlestick charts in the current fortnight to prove to be bearish.

Nifty on daily candlestick charts has made a doji with a long shadow/ tail akin to a hanging man pattern. This needs confirmation on daily candlestick charts to prove to be bearish.

The author can be contacted at: riskadvisory@outlook.com

DISCLAIMER:

These extracts from my trading books are for educational purposes only. Any advice contained therein is provided for the general information of readers and does not have regard to any particular person's investment objectives, financial situation or needs and must not be construed as advice to buy, hold and sell or otherwise deal in any kind of commodities, currencies, securities or other investments. Accordingly, no reader should act on the basis of any information contained therein without first having consulted a suitably qualified financial advisor.