Greenspan predicts RECESSION, oil above $60 --> Negative Sentiments, Price closed Gap, bounced off Moving Averages --> $860
5 Minutes Emini Nasdaq 100
Hi,
There are negative sentiments in the market today... Greenspan predicting a recession by the end of 2007, oil hitting above $60 and gold above $680 due to Iran...
This gives me a rough idea of where the market will be reacting in the coming session. BUT, this does not provide enough signal for me to enter or exit the market... Technical analysis is still the KEY.
Price opened with a gap up, and started to close the gap.. as you can see, I missed the first leg of this down trend... and was hoping to catch the second leg... unfortunately... price movement was very irratic thereafter... and I had to wait till 12:00...
At 12:10, I shorted 1 contract at 1837.5 after price bounced off the moving averages with the stochastics moving sharply down and short-term MACD bouncing off the zero-line... I shorted another 2 contracts at 1835 where price rested for a while.. I exited at 1825.5 with profits of $860... Notice how the stochastics and MACD moves up after I exited? ( orange circles).
Fundamentals:
When you get this far away from a recession, invariably forces build up for the next recession, and indeed we are beginning to see that sign," Greenspan said via satellite link to a business conference in Hong Kong. "For example in the U.S., profit margins ... have begun to stabilize, which is an early sign we are in the later stages of a cycle."
"While, yes, it is possible we can get a recession in the latter months of 2007, most forecasters are not making that judgment and indeed are projecting forward into 2008 ... with some slowdown," he said.
Greenspan said that while it would be "very precarious" to try to forecast that far into the future, he could not rule out the possibility of a recession late this year.
Greenspan also said he has seen no economic spillover effects from the slowdown in the U.S. housing market.
"We are now well into the contraction period and so far we have not had any major, significant spillover effects on the American economy from the contraction in housing," he said.