Update on World market crash

Shanghai broke the 100 EMA support line while the Indian market also broke another important support. Looking at these two emerging country charts, it seems that further downside is to be expected in these markets as we head to next supports. In contrast, the US market is very close to support and should start bouncing back this week. If this is the case, money would start flowing back to US from many of these hot emerging markets of 2007. Also, European markets have been able to reverse some of the morning damage and would possibly close in green.
As I am writing this Dow futures are down 440 points and S&P 500 is down about 66 points. I will post the chart of S&P 500 (starting from 1985) later today to show why we would most likely bounce from this level. No action from Fed yet. This could be possibly due to TED spread.
Good Luck !!

Nikkei and Shanghai markets

Nikkei and Shanghai markets have opened with about 4% declines mounting to yesterday's decline.The Shanghai Composite has sliced through the Nov-Dec support. More importantly it broke through the 100 EMA support. This was ALWAYS a support since the 2006 bull started. This is very bad for the Chinese markets.
Now, let us see how Indian and European markets open.

Black Monday for world markets

Every market around the world has virtually crashed due to the expectation of global slowdown that would be triggered by US recession fears. The US markets were disappointed on Friday following the not-so encouraging economic stimulus package from President Bush. China was down 5%, India was down a massive 7%. The 7% decline in Indian markets marked the biggest ever decline in its trading history. Developed economies in Europe stacked declines anywhere between 5% to 8%.

US market is closed today due to Martin Luther King holiday but the futures are indicating a 500 point decline in Dow Jones. It is best to stay away from this market till things improve. The QQQQ that I closely follow will break the August lows on Tuesday morning. The next stop is around March lows. Market is not onlyexperiencing financial fears but that is coupled with recession fears with higher inflation.

We would have to wait and see how world markets open tonight and if there will be any FED action tomorrow morning. Till then stay in cash and be safe. These are tough times for us. But don't worry we won't stay here for long.

QQQQ weekly chart

QQQQ is breaking the weekly trendline. If the market closes below the trendline for the week, that is the time to be aggressive with shorts. At this time, long or short is dangerous. INTC earnings are really creating a havoc.
We have more earnings this week, so the swings can be wild and dangerous. Best time to go fishing.

Intel INTC earnings and chart

Intel Corporation today announced record fourth-quarter revenue of $10.7 billion, operating income of $3 billion, net income of $2.3 billion and earnings per share (EPS) of 38 cents. This indicated a 51% jump in earnings.

Bottom line: The estimate was at 0.40, so this is a miss.
Chart: Posted is weekly chart of INTC. It hit the upper trendline and now it will head to the dotted blue line, which would indicate a price of around 15-16. INTC closed at 22.69 today, so this would indicate a major cut.

Weekly chart of QQQQ

We made a 'not-so-strong' bounce from the lower trendline on the weekly chart. So, this means we will be spending some more time down here, swinging from one side to the other.
The good thing is that last week's low should be the low for this market. We are going to have a nice bounce moving forward to the upper trendline and then where we go from there is anyone's guess.
The ^VIX is also indicating that market's downside is limited.
Good Luck !!

MOS earnings

Mosaic, a fertilizer company specializing in phosphate and potash reported a SIX-FOLD increase in earnings. Net earnings for the fiscal second quarter ended Nov. 30 rose to $394 million, or 89 cents per share, from $65.9 million, or 15 cents per share, a year earlier. Sales jumped only jumped by 44 percent.

The rise in earnings were mainly driven by rise in the prices of phosphate and potash. As the agriculture boom continues worldwide, the prices of these commodities are expected to rise.
I believe year 2008 will continue to be a year of commodities.
Hot commodities to watch this year would be:
1) Oil
2) Gold
3) Agriculture related

I am planning to focus my investments and trading around these commodities.