Bill Williams - Trading Chaos - Sensex

Simple Charts ( http://simplecharts.blogspot.com/) is for people who believe that Price is all inclusive and you need no more than Price itself to trade. The blog shows the Charts for various timeperiods - 1Day ( Intraday), 5 Day ( Intraday), 1 Year ( Daily), 1 Year ( Weekly). These charts for various time periods show us various Moving Averages ( Simple and Exponential) which are respected by markets everytime. This is still in development phase and future improvements are in pipeline. Happy Informed Trading  because beauty is in being simple.


Options Data updated every hour. Please check at 10.15 AM,11.15 AM,12.15 PM,1.15 PM,2.15 PM,3.15 PM.

Suggestions are welcome
Moneyflow table shown below gives you the liberty to watch where the money is moving i.e. which Nifty levels are generating interest amongst traders. Specially useful in analysing emotional buying of first 30 minutes and last 30 minutes of professional actions which actually charts the future path.


Put Call Ratio
Put Call ratio is a good sentiment indicator which helps to gauge market direction.


For complete view visit Market Watch

Friends, I am trying to implement an Trading Strategy proposed by Mr Bill Williams called Chaos Trading( read his book Trading Chaos: Applying Expert Techniques to Maximize Your Profits) on excel to give an insight in current confusing markets. This is an honest endeavour to understand what is the present trend and following steps which will lead to identify profitable trades. What I have done is to understand the theory through various sources ( books & websites) and present it in an easily comprehensive manner for all and sundry. I will be more than happy to receive your comments to improve this for future trading. Also, I am ready to remove this if it violates any copyright/intellectual rights issues.

Coming back to the Chaos Trading Strategy.
This trading strategy is a simple logic based strategy which tells us to first identify the trends, verify the trends, identify the trading signals, verify the trading signals and execute them if the sentiment is conducive. Seems like very easy and logical but I am amazed as to how it has been done in a very orderly manner in this trading strategy along with verifiable results.

First Step:
Chaos Trading begins with what is called Alligator indicators. In simple words Alligator indicators are composed of three balance lines which have been smoothed with various time periods. There are three Alligators indicators : Jaw, Teeth and Lips. When the markets are range bound the Alligator sleeps which means all three lines are intertwined. The scene changes when there is trend in markets. In an uptrend the price will be above all three line and in downtrend the price will be below all the three lines. The trading opportunity is created when the three lines start diverging and ends when the three lines converge.




Second Step:
the good part of this trading strategy is that it verifies every step. So, since we identified the trend in last step, now is the time to verify it. Gator indicators are nothing but delta value of three different lines. However it brings fore the fact how all three line are behaving in relation to each other. Lines converge when the difference become lesser and lines diverge when difference becomes greater. Analysing both the delta values gives us a clear picture of the Alligator.


Third Step:

This is the most important part of the strategy which actually gives us the trading opportunities. A buy signal is generated when in last five days the highest high is preceded by two lower highs and followed by two lower highs. Similarly for sell signal, there should be lowest low preceded by two higher lows and followed by two higher lows. The explanantion provided earlier is valid for uptrend. The reverse will happend in downtrend.


Fourth Step:
It involves use of two oscillators , Awesome and Acceleration / Deceleration Oscillator (AC). These are simply the delta of moving averages of (High+Low)/2 in different time periods. They show the trend as well as generate buy and sell signals which is to verify the previous signal generated in Third Step.



Fifth Step:
This the step which helps us to dertermine the trading environment based on movement of the oscillators.


I have tried to provide a simplistic understanding of the Trading Strategy. Please observe and understand before using this. As usual data has been extracted from Yahoo, so it will be incorrect for "Today" untill Yahoo updates its feed.

An insight on current scenario has been updated in my last post London Bridge is Falling........................

Bill Williams - Trading Chaos

Simple Charts ( http://simplecharts.blogspot.com/) is for people who believe that Price is all inclusive and you need no more than Price itself to trade. The blog shows the Charts for various timeperiods - 1Day ( Intraday), 5 Day ( Intraday), 1 Year ( Daily), 1 Year ( Weekly). These charts for various time periods show us various Moving Averages ( Simple and Exponential) which are respected by markets everytime. This is still in development phase and future improvements are in pipeline. Happy Informed Trading  because beauty is in being simple.


Options Data updated every hour. Please check at 10.15 AM,11.15 AM,12.15 PM,1.15 PM,2.15 PM,3.15 PM.

Suggestions are welcome
Moneyflow table shown below gives you the liberty to watch where the money is moving i.e. which Nifty levels are generating interest amongst traders. Specially useful in analysing emotional buying of first 30 minutes and last 30 minutes of professional actions which actually charts the future path.


Put Call Ratio
Put Call ratio is a good sentiment indicator which helps to gauge market direction.


For complete view visit Market Watch

Friends, I am trying to implement an Trading Strategy proposed by Mr Bill Williams called Chaos Trading( read his book Trading Chaos: Applying Expert Techniques to Maximize Your Profits) on excel to give an insight in current confusing markets. This is an honest endeavour to understand what is the present trend and following steps which will lead to identify profitable trades. What I have done is to understand the theory through various sources ( books & websites) and present it in an easily comprehensive manner for all and sundry. I will be more than happy to receive your comments to improve this for future trading. Also, I am ready to remove this if it violates any copyright/intellectual rights issues.

Coming back to the Chaos Trading Strategy.
This trading strategy is a simple logic based strategy which tells us to first identify the trends, verify the trends, identify the trading signals, verify the trading signals and execute them if the sentiment is conducive. Seems like very easy and logical but I am amazed as to how it has been done in a very orderly manner in this trading strategy along with verifiable results.

First Step:
Chaos Trading begins with what is called Alligator indicators. In simple words Alligator indicators are composed of three balance lines which have been smoothed with various time periods. There are three Alligators indicators : Jaw, Teeth and Lips. When the markets are range bound the Alligator sleeps which means all three lines are intertwined. The scene changes when there is trend in markets. In an uptrend the price will be above all three line and in downtrend the price will be below all the three lines. The trading opportunity is created when the three lines start diverging and ends when the three lines converge.




Second Step:
the good part of this trading strategy is that it verifies every step. So, since we identified the trend in last step, now is the time to verify it. Gator indicators are nothing but delta value of three different lines. However it brings fore the fact how all three line are behaving in relation to each other. Lines converge when the difference become lesser and lines diverge when difference becomes greater. Analysing both the delta values gives us a clear picture of the Alligator.


Third Step:

This is the most important part of the strategy which actually gives us the trading opportunities. A buy signal is generated when in last five days the highest high is preceded by two lower highs and followed by two lower highs. Similarly for sell signal, there should be lowest low preceded by two higher lows and followed by two higher lows. The explanantion provided earlier is valid for uptrend. The reverse will happend in downtrend.


Fourth Step:
It involves use of two oscillators , Awesome and Acceleration / Deceleration Oscillator (AC). These are simply the delta of moving averages of (High+Low)/2 in different time periods. They show the trend as well as generate buy and sell signals which is to verify the previous signal generated in Third Step.



Fifth Step:
This the step which helps us to dertermine the trading environment based on movement of the oscillators.


I have tried to provide a simplistic understanding of the Trading Strategy. Please observe and understand before using this. As usual data has been extracted from Yahoo, so it will be incorrect for "Today" untill Yahoo updates its feed.

An insight on current scenario has been updated in my last post London Bridge is Falling........................

London Bridge is Falling........................

Surprised!!!

Actually I meant to say Indian Stock Market is on a verge where the fall is going to be very severe. Nifty and Sensex after a month long flat-ish formation have created a situation where a big fall is imminent. The recent structure on weekly charts have paved the path which will keep the news channels busy for couple of weeks in December and may be January too.

Let's get straight to business
The weekly chart of Sensex clearly shows that we have reached the end of a triangle in a downward trend. Rsi sub 30 is also not a good indicator for coming weeks. Slow Stoch has clearly changed course which can spell disaster for Sensex. Levels to watch out next week would be 9341 on upside and more importantly 8467 on downside.

If we watch Nifty weekly chart , the the conditions are identical.RSI and Slow Stock do not augur well for Nifty too. Levels to watch out in coming days would be 2833 on upside and 2571 on downside.

360 Degree Analysis for Nifty has thrown up the following levels

UPSIDE :
2592.43    2603.14    2613.85    2635.28    2656.7    2667.41    2678.12    2699.55    2720.97    2731.69    2742.4    2763.82    2785.25    2795.96    2806.68    2828.1

DOWNSIDE:
2809.39    2797.59    2785.78    2762.18    2738.57    2726.76    2714.96    2691.35    2667.74    2655.94    2644.13    2620.53    2596.92    2585.11    2573.31    2549.7    2526.09    2514.29    2502.48    2478.88    2455.27    2443.46    2431.66    2408.05    2384.44    2372.64    2360.83    2337.22    2313.62    2301.81    2290.01    2266.4

Here is an interesting read
What the Bear Market Has in Store, Part 1

"Forecasts for the Bear Market
Finance
- Stock markets around the world will continue to fall. Ultimately, the averages will drop more than 90 percent.
- Real estate values will fall more than they did in the 1930s and 1940s.
- Rating services will resume the trend of downgrading bond quality. Eventually, states, counties, cities, corporations and even nations will default on bonds in record amounts.
- Debt packages made of mortgage-backed bonds, auto loans and credit card debt will become viewed as unworthy investments.
- Many, if not most, pension plans will fall in value and be unable to provide the promised benefits. Anger over this development will result in demonstrations, violence and tardy and ineffective political reform.
- Prices for collectibles will continue to fall. Many will become little more than curios.
- More banks will fail than failed in the 1930s.
- The total amount of credit outstanding worldwide will decline substantially.
- The Federal Reserve chairman will be labeled a fool who is greatly responsible for the collapse."

Warren Buffett

"With each passing year, the noise level in the stock market rises. Television commentators, financial writers, analysts, and market strategists are all overtaking each other to get investors' attention. At the same time, individual investors, immersed in chat rooms and message boards, are exchanging questionable and often misleading tips. Yet, despite all this available information, investors find it increasingly difficult to profit. Stock prices skyrocket with little reason, then plummet just as quickly, and people who have turned to investing for their children's education and their own retirement become frightened. Sometimes there appears to be no rhyme or reason to the market, only folly."

Update on 12/12/2008

London Bridge is proving to be stronger than what I had thought. However the manipulations in our indices have to respect some technical aspects. Let's see how long can this continue. One interesting thing was the tussle which was seen in the indices throughout the week. Fantastic!!! Bulls may have succeeded in preventing bears to take over but have a strong trendline against them ( see updated chart). Under no circumstance can this  lead to situation where Nifty can go beyond 3000 levels. This has been evident in todays pull back after 2945 levels. Important thing to note here is the vested interest of manipulators who have specific expiry levels in their minds. Also, It has been observed over last few months that whenever Nifty falls it is always very close to expiry where only a certain section of traders/FII's/Manipulators make profit

Updated weekly levels from 360 degree analysis

High

2714    2736.62    2747.93    2759.23    2781.85    2804.47    2815.78    2827.08    2849.7    2872.32    2883.62    2894.93    2917.55    2940.17    2951.47    2962.78    2985.4
 

Low


2945    2920.46    2908.19    2895.92    2871.38    2846.83    2834.56    2822.29    2797.75    2773.21    2760.94    2748.67    2724.12    2699.58    2687.31    2675.04    2650.5    2625.96    2613.69    2601.42    2576.88    2552.33    2540.06    2527.79    2503.25    2478.71    2466.44    2454.17    2429.62    2405.08    2392.81    2380.54    2356    2331.46    2319.19    2306.92    2282.38    2257.83    2245.56    2233.29    2208.75    2184.21    2171.94    2159.67    2135.12    2110.58    2098.31    2086.04    2061.5

How Will The Bear Market Saga Unfold? Its worst out there.

Bear markets are full of confusion. What will be the bottom? When will it will form? Questions like this are doing rounds in almost all forums. There are many who are providing answers to this and many who follow. The important thing is to understand "why" of the level or the date predicted. I am also confused ( bound to be s this is my first bear market experience) and so I did some analysis on this. I may be wrong by 100 odd points here and there and similarly for the date, a couple of days here and there. Please take this analysis as a sincere effort to understand and predict future action on stock markets and not as a something which is certain. I can assure you of that it will surely follow the broader course of action predicted.

In the chart shown below, it is evident that Nifty is in a downward channel. I had shown this quite early when the whole world was hell bound on 5000 and above levels in How Will The Bear Market Saga Unfold? Markets have been religiously following it since then and will continue to do so for sometime.

Now for some technical analysis ( actually I feel it is more of logical reasoning). We are almost at the end of the downward channel and here is the important part. If some level has to form an intermediate bottom, it is important that it is tested as seen in last intermediate bottom of 3790. This means that coming few days it will be very volatile. Nifty VIX is currently at 39.30, however to form a bottom it should ideally be somewhere around 50 or above which is due. The levels I have got from 360 degree analysis for an intermediate bottom are 3332,3315,3293 and 3255. I am proceeding with the worst case scenario. After forming such bottom Nifty should correct ( meaning rise ) to around 4000 levels. 4000 odd levels should be the level at which new shorting activity should take place and which will give 1000 odd points. Slow stoch and RSi also indicate formation of intermediate bottom. So guys this will be another chance to get rid of long position or it will be only pain.

Some basis for my analysis ( and mind you this is indicative and not firm for the predicted values or date) which will be updated as time passes

Here is some interesting statistics for you. It is now very clear that Us and other developed countries indulged in some big time profit making without caring a lot about good practices. The basic problem is that US financial institution developed some exotic instruments called CDS or Credit Default Swaps. Wikipedia explains it as below
"A credit default swap (CDS) is a contract in which a buyer pays a series of payments to a seller, and in exchange receives the right to a payoff if a credit instrument goes into default or on the occurrence of a specified credit event, for example bankruptcy or restructuring. The associated instrument does not need to be associated with the buyer or the seller of this contract."

This instrument was something which US financial industry thought was the best way to make money and that too big time. The reason that US is in turmoil because everyone thought that housing market would always rise and they kept on increasing the exposure. Unfortunately because of slowdown in growth the housing markets crashed and this was followed with payments related to CDS. Just to give a ballpark figure, Bank for International Settlements has figure of approx 60 Trillion of outstanding CDS contracts. Just imagine 700 Billion compared to 60 Trillion or 60,000 Billion. It is impossible to clear this mess. Any amount of co-ordinated attempt will not be successful. AIG is one such behemoth where this is taking a toll. God save the Americans and other developed nations whre this has been followed. Unfortunately the FII's( american one) are now short of capital and they will take it out from where they can. China is down alomost 70% from 52 week highs and India is only 40% odd. I don't think Chinese economy is doing bad and neither are we. If China can go down 70% so can we.

I am not trying to scare but telling the truth which is hidden from us by the Business channels which only shows rosy pictures. Think on this and speculate where we can reach. 2000 for Nifty. Does it look probable now?

Bear's Ferocity

Bears are known for their ferocious attacks. Every trader should keep that in mind and give due respect. It is for this reason that the bear rallies and downward journies are real fast giving no time. I have been pretty busy since last few months and have been just managing to update the daily levels which are shown on the blog.

I had a chance to go through some of the blogs in the "Morning Dose" and forums I visit and I came back surprised. People seem to be in perennial hope of revival of Bull run. This is also very common in my office. This motivates me to quote some gyan on Bear markets once again

"bears are exceedingly dangerous environments for investors. Fools ignore bears at their own great peril, and even the prudent are filled with plenty of trepidation. For the most part, you can't merely weather a bear by buying the best-of-breed companies. They will get sucked into the selling too. Other than sitting in cash, the only viable strategy for surviving, even thriving, in bears is actively trading these merciless beasts. "

"The key to successfully trading bear markets is understanding their primary driver, sentiment. The mission of a bear is to gradually hammer on investors until their perceptions of stocks radically change. When a bear begins, optimism and greed abound and traders are far too complacent. But by the time the bear ends, all hope has been beaten away. Pessimism and fear remain and traders are totally demoralized. "

"To trade a bear, traders have to carefully monitor popular sentiment. And then when it gets to an extreme, they must do the opposite of what mainstream market thought considers right. When the thundering herd is scared, traders want to go long and buy stocks. When the herd is greedy or complacent, traders want to go short and sell stocks. Contrarian trading within bears is dazzlingly effective. "

Enough of gyan but let me give you some levels which I have been persistent since I posted How Will The Bear Market Saga Unfold?  on August 8th.

Check for yourself, how the markets have stopped, took a breather and resumed its downward journey

Levels to take note of


"4577.53 4558.30 4539.07 4500.60 4462.13 4442.90 4423.67 4385.20 4346.73 4327.50 4308.27 4269.80 4231.33 4212.10 4192.87 4154.40 4115.93 4096.70 4077.47 4039.00 4000.53 3981.30 3962.07 3923.60 3885.13 3865.90 3846.67 3808.20 3769.73 3750.50 3731.27 3692.80 3654.33 3635.10 3615.87 3577.40 3538.93 3519.70 3500.47 3462.00 3423.53 3404.30 3385.07 3346.60 3308.13 3288.90 3269.67 3231.20"

Figures in red are all done and the rest yet to be completed. The last one in red being todays low.


“ Market Timing is a wicked idea. Don’t try it ever.” -Ellis, Charles D.




“ There are two kinds of investors, be they large or small: those who don’t know where the market is headed, and those who don’t know that they don’t know. Then again, there is a third type of investor –the investment professional, who indeed knows that he or she doesn’t know, but whose livelihood depends upon appearing to know.” -Bernstein, William.

 

Failing Of A Long Jump

Has the wheel started moving? Last week I had presented the scenario of How Will The Bear Market Saga Unfold? Inspite of all the pseudo positive atmosphere being created by various components of Indian Stock Market and its valued participants, Nifty failed to reach those heights ( read 5000 and above). After a week if we take stock , things are not as rosy as it is being projected by vested parties. I think there is something fishy in the way markets are being made to behave. The day IIP data was going to be published a valued B-Channel flashed IIP data before it was officially published and that too incomplete/wrong. What can be the motive behind this? Markets however reacted to the data being flashed. It high time the regulators take note of the parties who are trying to manipulate markets.

On the other hand Interactive iPath MSCI India Index ETN (INP) has fallen almost 5.5% till 13.08.08 while Nifty fell by 2.2% only last week. Another omnious sign for the coming week. Not to forget that we have a truncated week and by the time we open on Monday ( 18.08.08) much water would have flown under the bridge. Scenario in US and Europe are not rosy too.

Charts as on today also don't look like there is much cheer for BULLS next week.

In the daily charts Nifty is still in the channel. RSI, MACD and Slow Stoch are all indicating falls next week. In the weekly charts RSI has turned down after facing resistance at 50 levels ( indicated by blue line). Slow stoch ( weekly) is indicative of the BEAR week coming next.

So in true Olympic spirit the much awaited long jump of Nifty from 3790 to supposedly 5000 and above has failed. The path to the failure was indicated in my last post How Will The Bear Market Saga Unfold? 

" 4577.53 4558.30 4539.07 4500.60 4462.13 4442.90 4423.67 4385.20 4346.73 4327.50 4308.27 4269.80 4231.33 4212.10 4192.87 4154.40 4115.93 4096.70 4077.47 4039.00 4000.53 3981.30 3962.07 3923.60 3885.13 3865.90 3846.67 3808.20 3769.73 3750.50 3731.27 3692.80 3654.33 3635.10 3615.87 3577.40 3538.93 3519.70 3500.47 3462.00 3423.53 3404.30 3385.07 3346.60 3308.13 3288.90 3269.67 3231.20 "  Figures in red have all been achieved this week . Just check how the lows of the week match with the levels.

Important Levels for this week are:

Upside - 4457.84, 4476.26, 4494.68, 4531.53, 4568.37, 4586.79, 4605.21, 4642.05

Downside : 4611.25, 4591.88, 4572.5, 4533.75, 4495, 4475.63, 4456.25, 4417.5, 4378.75, 4359.38, 4340, 4301.25, 4262.5, 4243.13, 4223.75, 4185, 4146.25, 4126.88, 4107.5, 4068.75, 4030, 4010.63, 3991.25, 3952.5

Jesse Livermore


"The price pattern reminds you that every movement of importance is but a repetition of similar price movements, that just as soon as you can familiarize yourself with the actions of the past, you will be able to anticipate and act correctly and profitably upon forthcoming movements.

I never hesitate to tell a man that I am bullish or bearish. But I do not tell people to buy or sell any particular stock. In a bear market all stocks go down and in a bull market they go up. "

Mean while for a read this week
The 5 C's of Trading Consistency

"To summarize, the 5 C's of trading consistency are:


• Clarity
• Commitment
• Courage
• Confidence
• Calmness

Consistency is most difficult and most readily proven during tough times. How someone weathers the storms demonstrates their skills."

How Will The Bear Market Saga Unfold?

There is hope in air. A friend of mine asked me if we are going to touch 5000. The B-Channels are more than happy to give such figures, the reason best known to them. Some five weeks back everyone was asking if we are going to touch 3600 - 3000. Now just five weeks later  everybody is going for 4900-5000 levels. This exactly what bear market feeds on. Its always a contrarian call. When everybody was 3600 the markets went up till 4600 and now when everybody is 5000, market will spring a surprise.

Enough of gyan , lets check it with some chart. You have to show some proof to the world to make them realise their folly.

 

So we can clearly see how the markets have moved since January. Lets see another chart to bring more perspective to what I am saying

  

I think now it must be clear. A point to note is the Slow Stoch which is likely to go downhill bring down Nifty with it. So get ready to short guys. This will be a lifetime opportunity to earn money by shorting , buying puts and build a portfolio when we are close to bottom. Stock will be sold at unbelievable prices.

Levels to take note of

4577.53 4558.30 4539.07 4500.60 4462.13 4442.90 4423.67 4385.20 4346.73 4327.50 4308.27 4269.80 4231.33 4212.10 4192.87 4154.40 4115.93 4096.70 4077.47 4039.00 4000.53 3981.30 3962.07 3923.60 3885.13 3865.90 3846.67 3808.20 3769.73 3750.50 3731.27 3692.80 3654.33 3635.10 3615.87 3577.40 3538.93 3519.70 3500.47 3462.00 3423.53 3404.30 3385.07 3346.60 3308.13 3288.90 3269.67 3231.20

Meanwhile for some reading

Some excerpts
"bears are exceedingly dangerous environments for investors. Fools ignore bears at their own great peril, and even the prudent are filled with plenty of trepidation. For the most part, you can't merely weather a bear by buying the best-of-breed companies. They will get sucked into the selling too. Other than sitting in cash, the only viable strategy for surviving, even thriving, in bears is actively trading these merciless beasts. "

"The key to successfully trading bear markets is understanding their primary driver, sentiment. The mission of a bear is to gradually hammer on investors until their perceptions of stocks radically change. When a bear begins, optimism and greed abound and traders are far too complacent. But by the time the bear ends, all hope has been beaten away. Pessimism and fear remain and traders are totally demoralized. "

"To trade a bear, traders have to carefully monitor popular sentiment. And then when it gets to an extreme, they must do the opposite of what mainstream market thought considers right. When the thundering herd is scared, traders want to go long and buy stocks. When the herd is greedy or complacent, traders want to go short and sell stocks. Contrarian trading within bears is dazzlingly effective. "

FII's - The Open Secrets Of ETF's

I have tried to research more on this topic since my last post FII's - The Open Secrets You Would Like To Know . The results are that there are four India specific Exchange Traded Funds or ETF's.

iPath MSCI India Index ETN (INP)
Morgan Stanley India Investment Fund (IIF)
PowerShares Index (PIN)
WisdomTree India Earnings (EPI)

The important question here is that how can we use this information. Two important questions which are now unanswered are:
Do the performance of the ETF's have any effect on our index - Nifty?
How is the FII activity in Nifty related to the FII activity in these ETF's?
This is not an exhaustive list and many more may arise as we delve deeper into this. Till then this post is like a snapshot page which has all of these ETF's against Nifty.


5 day Comparison Chart of NSE and iPath MSCI India Index ETN. For technically inclined guys, Pls check Interactive iPath MSCI India Index ETN (INP) Live Chart (Yahoo)







5 day Comparison Chart of NSE and Morgan Stanley India Investment Fund (IIF). Check for Technical Charts




5 day Comparison Chart of NSE and PowerShares Index (PIN) Check for Technical Charts




5 day Comparison Chart of NSE and WisdomTree India Earnings (EPI) Check for Technical Charts

Interactive WisdomTree India Earnings (EPI) Live Chart (Yahoo) Live Chart (Yahoo)

Interactive WisdomTree India Earnings (EPI) Live Chart (Yahoo) Live Chart (Yahoo)

Interactive PowerShares Index (PIN) Live Chart (Yahoo) Live Chart (Yahoo)

Interactive Morgan Stanley India Investment Fund (IIF) Live Chart (Yahoo) Live Chart (Yahoo)

FII's - The Open Secrets You Would Like To Know

One news item from Economic Times which seemed like another run of a mill story was actually more than it. The article speaks about the performance of Indian funds listed in US. So, What?

No, actually this is like an indicator of the FII activity on a future date told one day before. Don't believe me. Read the story....

A 5 day Comparison Chart of NSE and iPath MSCI India Index ETN.Check previous day activity to know how Nifty will behave today. For technically inclined guys, Pls check Interactive iPath MSCI India Index ETN (INP) Live Chart (Yahoo)

Interactive iPath MSCI India Index ETN (INP) Live Chart (Yahoo) Live Chart (Yahoo)

Bears lost last week but.......

It was Mangal all the way. Indian Markets blasted off like they had not done even in hightime Bull Market. For 5 straight days Nifty zoomed 749 points from the low of 3790 on July 16th. The rally could have gone abated had it not faced the upper trendline of the downward channel. Couple this with the fact that some intelligent traders had other thoughts at 4500 levels.

Next week is a sell week with Slow Stoch pointing downwards.However as next week is an expiry week it will be an operator driven market.

Key Upside Levels : 4123, 4174, 4225, 4276, 4327, 4378, 4429, 4480, 4514
Key Downside Levels : 4482, 4425, 4368, 4312, 4255, 4198, 4141, 4085, 4047, 4028, 3971, 3914, 3858, 3801, 3744, 3687, 3631

Mangal ya Amangal

WOW! What a week... Phew..

We started off around 4000 peaked at 4118 came down to 3790 and zoomed back to 4092. Now this is what is called a traders week. Bulls and Bears happy with their pound of flesh. People who rode the bulls and bears at right time are also happy.

So Nifty 50-50 is actually divided 50-50.

Now what can we expect next week. Next week we have a Major political event which will define the market for quite sometime. A win for UPA can sooth some nerves and a loss can ensure nervous breakdown. Monday should be a very boring day in market unless something dramatic happens which makes markets dance to its tune. Tuesday will decide which way Market breaks out. It is already at resistance as seen in the daily chart ( I expect Monday also will respect this trendline). A breakout on upside will mean atleast nifty touching close to 4300-4500 which will also respect the weekly trend ( chart attached below)

Key levels for next week are

Upside: 4105,4121,4137,4169, 4216,4263,4311,4358,4405,4453,4500,4548
Any break of 4169 will mean that we can touch 4263 next week where we can face huge resistance. Next level for nifty after 4263 will be 4358.

Downside: 4066,4015,3963,3912,3860,3809,3757,3706,3654,3603,3551,3500.
If by any chance we break 3706 this week then 3603 and 3500 is a high probability

Think hard because its your money.

Nifty Fifty - 50 - 50

Nifty Fifty , our beloved index which took world by storm is all set to hit 50-50. Nifty which hit an all time high in Jan 08 topping out at 6300 levels is going to hit 3500-3600 levels in couple of weeks ( for technical people charts attached).

Whoosh!!! Almost 3000 points decline in a span of 6 months is something amazing which happened. A lot of people might have given all sorts of explanation for this decline. Onset of Bear Market, US Economy... blah blah. I would like to add one more to this..

Do you remember P-Notes? Yes, the reason why we hit circuit not far from now. The govt then had asked the FII's to phase out P-notes in 18 months and the FII's obliged to the govt. Till now they have taken out 27000 crores this year ( ET Link). I am sure not all P-notes will be converted to registered FII's and some will find it difficult to disclose their identity in public. The best they could do was to pull out and this is what they are doing.

Nature has strange way to reconcile things. So we can give it any name Bear Market, US recession, P-notes etc etc. One thing is sure what goes up has to come down ( and afterwards will go UP )

Mull over this chart for time being

Few Good Links...

Thought just to pin point few of the good men amongst the crowd

Economic Times:

• Investor's Guide
• Market Live
• Stocks News
• Analysis
• Swaminathan S Anklesaria Aiyar

Financial Express

• FE Columnists

Business Standard

• Market Technicals
• Market Trends

Live Mint ( I like the quality of articles)

• Money Matters
• Columnists

Hindu Business Line

• Markets
• Investment World
  

Is the Party Over?

Today I was surfing news websites and I found this... Economy: The party is over

Has the mighty Jumbo stopped running or has it started jogging suddenly? This is a question that will haunt many economists in their night dreams. "India Shining" has just lost its sheen it seems.

Key snippets:
"The higher inflation has dashed all hopes of lower interest rates. Growth is also likely to be relatively lower than the previous years."
"Higher interest rates and increasing expenses would directly mean that demand for goods and services would lessen, which could put pressure on economic growth. "
"The sectors, which are already reeling under higher rates may feel the pinch. "Sectors like consumer loans, real estate and auto will feel the pinch. "

Do you feel your grey cells working.....

Nifty Spot and Futures Chart

Simple Charts ( http://simplecharts.blogspot.com/) is for people who believe that Price is all inclusive and you need no more than Price itself to trade. The blog shows the Charts for various timeperiods - 1Day ( Intraday), 5 Day ( Intraday), 1 Year ( Daily), 1 Year ( Weekly). These charts for various time periods show us various Moving Averages ( Simple and Exponential) which are respected by markets everytime. This is still in development phase and future improvements are in pipeline. Happy Informed Trading  because beauty is in being simple.

Interactive Nifty Live Chart (Yahoo)

Simple Charts ( http://simplecharts.blogspot.com/) is for people who believe that Price is all inclusive and you need no more than Price itself to trade. The blog shows the Charts for various timeperiods - 1Day ( Intraday), 5 Day ( Intraday), 1 Year ( Daily), 1 Year ( Weekly). These charts for various time periods show us various Moving Averages ( Simple and Exponential) which are respected by markets everytime. This is still in development phase and future improvements are in pipeline. Happy Informed Trading  because beauty is in being simple.

Live Nifty Futures Chart

Simple Charts ( http://simplecharts.blogspot.com/) is for people who believe that Price is all inclusive and you need no more than Price itself to trade. The blog shows the Charts for various timeperiods - 1Day ( Intraday), 5 Day ( Intraday), 1 Year ( Daily), 1 Year ( Weekly). These charts for various time periods show us various Moving Averages ( Simple and Exponential) which are respected by markets everytime. This is still in development phase and future improvements are in pipeline. Happy Informed Trading  because beauty is in being simple.