- In the last few days the Global Indices have seen some bit of correction.
- Nifty has been relatively stronger with a dip of just 400-450 points or less than 3%
- The Smallcap Index is also just 1-3% away from highs.
- At the same time US indices have taken a knock of 3-6%
- The Dollar Index has seen a fresh upmove
- Commodities have taken a dip.
- The strong upside Momentum seems to be broken and a good consolidation would be ideal.
The US Indices have come closer to supports. For now it looks like a bounce back in the offing but if we sustain below the supports one should be ready to scale down positions.
A similar price point for Nifty would be 17100-177300.
Dow Jones – 33000-33500 an important support.
Nasdaq 100 – 14500 an important one and next 14000-14100.
S&P 500 – 4200-4250 an important one.
Dollar Index –
- We have looked into this one multiple times as a whipsaw one only.
- Every swing high has failed in 3-5 sessions.
- Only when this index starts sustaining above 95.5 does it trigger a global Risk-Off.
- Got to watch this one closely. A crack below 93 again triggers a Risk On too.
Conclusion
- For now the US Indices look like a bounce in the making.
- Dollar Index could do another whipsaw move.
- Watch for recent swing highs to break for 4460 on S&P 500 to be a confirmation of a momentum shift to up.
- Be ready to review positions if one sees a crack of supports and a breakout in dollar index.
- If you are a leveraged trader – Time to keep your stops tight, position sizing in control and be nimble.
- For India the Sector Rotations and broader market strength to continue till it holds 17100-17300.
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