Hurst Cycles Trading Software - Accurately Forecast Nifty and Stock Cycles

Thursday, February 5, 2009

Reflexivity and Inverse Reflexivity

I meant to post earlier today but some work came up....Still here are my thoughts as promised...No charts today...Just typing some random thoughts and ideas.

Now the topic -
For those who don’t know about this concept, its very useful -

Reflexivity basically equals ‘a self forefilling prophecy’ - traders expect a gap and big decline, so they sell causing a big decline. This is actually a pretty widely followed concept. You can google for more information.

Inverse Reflexivity is a different idea - its an ‘unforefilling prophecy’ - its the contrarian flip side, where in this example, if too many traders go short anticipating the decline, the market makers aka operators can’t resist picking their pocket - coz believe me my friends, they know two very important things -

1. They can see how many short positions are out there and where hard stops are.

2. They know all the methodologies we use, what triggers setups, what triggers stops

If this is the case here, then likely it will roll over again down once the shorts are cleared, maybe by the close today or maybe by Monday.

Now above is what I think of the market now...As I said before I am just a trader...I am not a market GOD...You need to make your own decisions....I dont want you to lose money and then come back and post over here as that ANONYMOUS LOSER...I am sure that big loser lost so much money and he is totally pissed off at the world. Well my friend, no one but you is responsible for your own losses....Same thing I have to say to all....

Having said that, I thinned on some of my shorts yesterday...Still heavy so was looking to thin down some more today...If I get a good setup...But overall planning to hold shorts into next week. If you are risk averse, do not simulate my positions or my views :P

A wise guy once said about TRADING - The HARDEST WORK in TRADING is the WAITING ;)


Chill Out!

Another attempt...This time Bryan Adam's 'Back to you'

Comments appreciated.

One More Thought - EDIT*

EDIT: Sorry I had to delete earlier post and repost here...One idiota loser who probably has not even made a single cent in the market in his life has started posting anonymous comments that I will soon fail and commit suicide...LOLZ. I feel for you my friend - I think you have lost a lot in this bear and are just venting your frustration out...I guess you are also the same guy who commented a while back that 2250 is not the short term bottom but it would be 1860...Hows that working out for you?

Sorry could not resist...

I have changed settings...No more anonymous comments...

So that the latest post and comments do not get lost, I have pasted them below.

Latest read on markets - Well I dont know...I am still seeing possibility of a big down day...Or even cumulative down...Either way I have to start seeing sub 2700 in next 2-3 days. Else have to start thinning down on shorts....Already I managed a few, took profits on some and so on....But probably will think about really cutting them down soon.


I have a pretty good feeling that we can have a very big down day today or on Friday. Be very careful out there if you are trying to bottom pick. For the down day to trigger, 2750 should break first..Then 2700. If so, then I think the goose is cooked and we head to 2525 first stop.

I will put up a new analysis video over the weekend.



Yoda said...
Something about this fall isn't right. Can't put my finger on it.

Most stocks by this point are uniformly poised to drop - that syncing hasn't happened yet.

I'd advice caution since yesterday's fall was so controlled.

February 4, 2009 6:36 PM

Lee said...
Yoda, I agree with you to some extent...Something is not in sync...I can feel it also...Which is why if you see my last 2 posts, I am advocating lots of caution in case the whole premise is cant put a finger on it either but STILL...I have to play the odds...And short still seems the way to go...If we dont drop in next 3-4 days, I have to rethink this whole fractal...


Tuesday, February 3, 2009


Hope you all enjoyed the video in the post before...The quality in the video posted in the post was really bad which is why I uploaded the video in full quality. If you download those, you will be able to see it in full resolution. The blog embedded one sucks...

If anyone has a more effective solution on how to put the video IN the post itself, I would really appreciate it...Suggestions welcome.

Some folks had problems with actually playing the downloaded file. If you are having problems...Go to this link -

Download VLC media player...Superb player and will play pretty much every video file under the sun..Few it will not but thats fine...

Do this, and I am sure your problems with actually playing the file will be solved...

Regd the earlier posted poll, majority was bearish..But I think this is because you guys are reading my views and are influenced by it. Mainstream as I see is not so bearish...Sure there are bears but there seem to be a lot of baby bulls. Scary.
The other thing I feel is this...We are probably in the terminal end of this decline phase..So this means lots of people are bearish...But still the decline will come to wipe out the last smidge of bullishness so that the new baby bull market can start.
This is my feeling and interpretation. I can be wrong also. :)

Okay now coming to the markets...

So far, the market has been driving both bulls and bears crazy...Rangebound moves...And very volatile both ways and taking out both bulls and bears. I expect we will continue to be in a wide range of maybe 2500-2900 for atleast few more weeks...And the interesting part is we might test BOTH ends of THIS RANGE very soon. Get ready for some fireworks! :)

Be careful though playing in these conditions. What we have in some serious volatility compression...And we are building cause for a move in a certain direction. I am still looking for down as per my fractal map but still will be playing things cautiously...For example day before, I got out of some of my puts which I will likely enter today...Only thing I am not sure is whether to go for Reliance or Nifty but will see...Either case, I believe in next 4-5 days we have to start the big move down...2525-2600 first stop.

Charts and Commentary below -



SENSEX something important...Even though I am raving bearish here and I am sure many of my readers are...Its important to play safe...We never know what can happen in these environments..SO...Play Safe!