Most Probably Yes..Action in US markets today was very clear. Almost half of the uptrend was wiped out within less than couple of hours.
I had been calling for past 2 days or so for 5150-5180 to top out this current upmove and for the next big wave down to start. In Hurst terms, for the 2.5, 5 and 10 week cycles to top out and the next big move down to start into the expected November lows(with a small pause October 1st timeframe).
So likely we started that yesterday.
Now price - Like I have been saying. 5000 first needs to break. Then 4900. Then only we can confidently say we are going to break the 4740 area also. But you know what my bias is :)
So I am short..probably too much..So as usual, I will book some as we go lower..And ofcourse then ride the rest...Hopefully into the abyss.
I am surprised guys..no comments around here..Is it that you dont understand what I am saying? If so, maybe I need to revisit the way I present things..OR is it that you fully agree with my analysis and dont want to comment and add anything more? :)
Or is it that you fully disagree with what I am saying..And dont want to argue with a crazy raving madman speaking gibberish..lol :D Well whatever it is, I always appreciate comments guys..Even if I dont reply directly, I appreciate it and if its a question, I always try to address it in upcoming posts - The last few posts are clear examples.
Ok nevertheless, back to business. A small note about cycles. Its funny. If this same news had come out lets say at a different point of time, the market would not have reacted this way. If you think about it, there was no need for such a big selloff but that is where cyclic pressures come into play and exert themselves. Bottomline is we dont need to worry about any news events. I was calling for a big top for past 2-3 days just like I called for a bottom around a week back.
Same ol game. Just need to be able to read it accurately and MORE IMPORTANTLY, be positioned for it in the right way with least amount of risk.
Wish you all a profitable trading day..And expect a bounce back from some level today..most likely around the 5080/5050 area if we can get there. If that doesnt hold, then 5000.
And as always, comments are welcome!
OH and EDIT: One thing more - the fractal I posted yesterday. Looks like its playing out. If so, close down the hatches - we are in for a bumpy ride down. Those who know me from 2007/08 know the amazing fractal I posted and traded at that time. This also has the potential to be something quite spectacular. Wait and watch. And as always trade safe!
One more thing is the USDINR pair - I was telling all my friends when we were at 42.XX that this is going to 48.XX first stop and probably above 50.XX soon. I think the call is already justified. Right now IT is rallying anticipating increase in profits but sooner or later a mean reversion will happen there are well..As I said, wait and watch. And dont forget to take profits periodically.
EDIT:
1. Booked around 25% shorts..Just to be on safe side. And also to sleep sound. Now my effective short price is way above 5200 - so I am safe for now. Its just good trade and money management. Cannot afford to be greedy in this profession.
2. Hmmnn...ever since I covered a portion, market seems to be building a base for a small move higher. So expect this. Maybe 5080 or 5050? Possible but I think not worth playing for - the big move is still short and stay short. But if you want to, covering here and reshorting higher might be prudent if you are awake and trading. I on the other hand dont have such luxuries. So I will sit tight.
Jesse Livermore once said "After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting"
Will go to sleep and see tomorrow what happens. Whatever it is my avg short price is way above 5200 like I mentioned due to trading and covering some portion right now. So I will hold. Wait and watch. I think this is JUST the TRAILER. Full movie will be released soon ;)
3. WOWZA..so much for the so called 'bounce'..LOL..Bye goodnight going to sleep..Still short and strong. ;)
Best,
Lee
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24 comments:
I more or less agree with your estimates. But what is happening for some time this indian market is not following global trend fully. Now if you see S&P has come down from resistance area, but will it be the same here for Nifty. Honestly I'm not doubting your study, infact I tend to agree fully. But in reality I m somehow waiting to see that happen. Coz that seems to me logical. Lets hope market gives clear downward movement.
Rgds.
Good going Lee... BTW, I had started making short positions after you and Ilango Sir had predicted this long ago... ;)
Hi Aimnifty,
Actually yours is a very valid point. It all comes down to correlation - and our Indian Nifty does not correlate too well with the DOW or SPX...Yes its true..Most people might wonder then what is the point of what I have written here.
Yes - this is something I want to touch upon in next few posts. If you look at pure day by day correlation, then it does not, its a very very less percent of correlation if you actually study it.
Now why?
Yes - this is why I posted the Hurst study of US market couple of days back. It all has to do with the cycles. We are right now leading US by around 7.5 weeks - this is why. Pure and simple. This is why lot of days you see a bearish US market but India rallies. Its just leading - that is all.
BUT there will be times when we will also match closely. I believe this is on of those times. Atleast better correlation that usual times. Why? Because US has topped the 5 week, we have likely topped more than that. But the reason why the lows were so different is because of the time lag. This is exactly why the India lows came in Oct 2008 and the US ones came in 2009 March. Its all about the cycles.
Ok enough for now. I will expand on this a little later. For now, its a homework for you guys - Study the cycles charts and come back with observations. I am also studying this intently. Apart from making for an interesting study, it also throws clues to future market direction. So not a effort gone in waste.
Thanks Bharat.
Appreciate your comments guys.
Best,
Lee
Looks like today 5050 is not going to hold, SGX is already at 5033. I was thinking that till this series expiry it will just be range bound, however looks like we are in for a surprise on expiry. Like you I am short and playing for november only. Time is not permitting to do intra day and reduce cost.
I like your analysis and open your blog couple of times a day to see if there are more updates. I wasnt reading your blog in 2007-08 but I am extremely impressed with it.
Great work and keep it up.
Rgds,
Raghuveer
Good call Lee. I got burnt today going long yesterday at 5110. My reasoning although "on paper" might have been right EW wave 5 to 5220, I also noticed EW at a higher degree indicate top at 5170 range.
Lee - please also give calls on US market. I am sitting on cash with very little trading. Made some money this month but long term I feel some good stocks are waiting to be bought.
Hi Lee,
Came across your blog couple of weeks back. Its really amazing the way you present things in a clear manner.
Your post yesterday was spot on.. Took some puts and made a good profit.. Please keep up the good work Lee.
I am also interested to learn more about Hurst after seeing your posts.. I agree that it requires commitment ... I will start with it soon.
Have a great day Lee. Thanks once again for your blog.
Regards,
Ganesh
Hi RSR,
Thanks. I think 5000-5020 area is what we need to watch. If we cannot hold, then I think we go down very quickly. Thank you for your comments.
I had some good and bad times during 2007 and 08..But stopped in b/w because of other commitments and because this blog was interfering with my trading.
Hi GD,
US markets, I will try to post some stuff regularly. I was not aware ppl were there who trade it. I dont trade it but still track it for the academic exercise. My earlier comment also provides some explanation to why I do that.
Trades come and go. One thing we always need to tell ourselves is a trade is just a trade..Other opportunities will come. We need to go with the flow without getting stuck up with something. Believe me I have done this so many times - But ultimately it strikes me - There are so so many opportunities out there..Why we need to get stuck in one trade?
Thanks Ganesh. I will recommend that you read some of my earlier posts from this year if you are really interested in learning the Hurst methodology.
Best,
Lee
Hi Lee,
I came to know bout your blog through that of Ilango Sir,whenever you make a post there I come and see your blog.It always helps, whilst I do not understand hurst cycles, I have noticed that whenever EW says down and you say down, it invariably goes there.Always keen to know what you think.
Thanks and Regards,
Neha
Reached yr blog thro JNifty, and interesting to read yr analysis with another approach.
Tuesday's upmove was a surprise to the expectation of price fall below 5050 levels.But as market is supreme ,will have to bow to it.I work with the Median line method which too indicated the downside targets of 4500 in the coming weeks when it breaks 4700.My charts are posted regularly in my blog www.NiftytradeswithPitchfork.blogspot.com.
Will be following yr blog for yr updates and look forward to the great Fall!!
Hi Lee,
Thanks for explanation on different timecycles for nifty and s&p. Today we are looking in sync with world more than in last few days.
I will look forward to your post for interesting study. FYI I do visit your blog many times in day to see if anything new has come up.
Regards.
get up man - u punctured the market and sleeping well :)
Hi Lee,
I silently follow your blog right from the time I found in Ilango's blog. Somedays I felt disappointed when there was no update. Also the disclosure of your trades help us also to plan our strategy. I suffered some big losses on earlier Shorts this month even intranet trades did not work. I however held on to the shorts done @5010 though actual value is still low due to intra day losses. I wanted to continue to hold shorts with SLl 5200/5220.
Your big drop prediction for next month along with Kumar sirs bearish stance with SL @ 5200 prompted me to buy October 5100 puts. Today sold 50% of puts @214 and recovered 75% of my losses. Thanks a lot sir.
I hope you will continue to post every day about the status of markets as your inputs are very valuable.
Must say you and Kumar sir saved me from some heavy losses.
Bvdr
some interesting facts
the fractal comparison you had posted earlier has one more similarity ...at the end of july contract FII index futures position was a net short of 1.1 lakh contracts... and today the figure is a net short of 0.93 lakhs .. few more days to go i guess OCT may be a repeat of OCT 2008.....
Dear Lee
Thanks a lot for making our life simpler and peaceful. Really you are an angel for us. I had suffered heavy losses in the market but with your and Iliango Sir blessings did wonders for me. I am on the path of recovery now. For the first time I am getting confidence in the trades. I want to learn Hurst methodology also. Sir whenever u visit India, I would like to meet you. May God bless u with best of health and prosperity. Please write me anandmdms@gmail.com Thanks a lot. Dr. Anand Bansal
Hey lee
Just wrote at jn and than came here, happy to hear abt ur rupee's past view and now eager to read ur further analysis of rupee.
I request just once try gold and silver in ur hurst term i think PM respect this term perfectly.
Hope u will do
I regularly visit here but to be frank ur posting time is irregular so irregular visitors think u r not going to update. I know its difficult there
A solution
Join twitter and add option that ur post directly post on twitter and follower will get alert no cell....oh i am advising too much
Dear Lee,
No comments worry solved. 15 comments already. It is just to say that on this week end "vipanisangeetham" will be referring your Hurst cycles with correlation to Rahu.
Hi Lee,
can you upload "Jesse Livermore" audio book somewhere. Or send me to my mail i.e. aimnifty at gmail
Regds.
Lee,
All i can say with my experience of 2 years as traders is.. trade the time action.. not the price action.. price action comes automatically.. three more trading days of weakness if we do 2.5 week cycle again.. else this weakness or flat market for next 2 week..
Then a big rally is pending.. again i think upto 5200.. and then the final touchdown..!!! Ocotber mid will give very very nice oppurtunitites to short the market and sleep till Novemeber..!!!
Nice blog. Am mainly a commodities person but keep a sharp eye on the S&P and dollex. And I haven't read up about the cyclical pattern that you have mentioned , but , I intend to do so now. Have a bearish outlook too. S&P futures are headed south big time.
Might want to check out me at http://mcx-advisory.blogspot.com
Thanks Neha for your comments.
Kavima..true..but whatever cyclic forces are in play will eventually exert itself. Before that yes, we will have lot of false moves as well.
Hi Aimnifty - I think market just proved my point. We wont follow always. But yesterday I was confident we will..Thats why all the important updates.
Thats why I posted on blogs and VFM as well. Did not want anyone to miss it.
Ha ha Sujatha..Yeah I just sold around 10000 lots of nifty and punctured the market..no recovering from that lol(but I did have several
nightmares in my sleep)..hehe ;)
Hi bvrd, glad that my views helped you.See my below responses as well. Kumar sir is one of a kind..dont even compare me to him lol..he is just damn
awesome..on a totally different level. Views are one thing. Trading is totally another thing. I hope one day I will be able to trade like him..
Kumar sir, are you reading this????!!! :)
Meshach, thanks for the info. Definitely interesting.
Thanks Anand..Thanks Sim also..
Hehe Nandi..yeah I am happy..Nice to interact with people..I wont bite!..you can always comment here..Will be awaiting your post.
Guys, I will upload the book audio files very soon and post the link here.
Sachin..probably...however I doubt we will see 5200 for some time..we will see soon...Its always unfolding..price action..They key is to be flexible.
Hi Jigs,
Thanks for the comment.. :)
Anyhow, what you have said is true...I know I have been very irregular..Its just that some things in trading life was not going good..
Hence I had to take a long break..If I did not, it would have literally killed me...Posting a public forum is not an easy thing..
So I had to go on a soul searching mission..To rediscover myself..
My job is another thing..working 2 jobs, 2 lives aint easy..I have to do lot of extra effort to get this done. It was killing me
back in 2008 and 2009..Now I think I am coping better..but still running a blog along with usual day job is tough..Hell trading the
market itself is tough..Now unlike 2008 I am a big manager also here..so additional responsibilities..its tough to say the least.
Someday I hope to be a full time trader..And hopefully a fund manager also! Just my wishes and ambitions.
Now I am back blogging..and even much more stronger, much more mature as a trader than before. I will keep this blog very active
going forward - God willing. I am updating views daily for past few months I think. And dont plan to stop that anytime soon.
So you can rest assured, I will have atleast 1 post up daily - unless ofcourse something happens that I cannot control.
Rupee and commodities..I will try to put up some views soon..All markets follow cyclic principles.
Twitter..let me see what I can do..
Best,
Lee
Its difficult 4 you lee and i can understand, its hard work and i know charting any analysing market takes too much time.
You are doing wonderful job and plz keep it up
Hope all ur future plans and ambition comes true god will help u
Regarding twitter there http://twitterfeed.com/
Hi lee,
Good to see your post on nifty.. keep posting daily to help fellow traders to learn from your past exp and make profit from trading...do post when u feel it is time to go short again in nifty big...
You are being very modest. You are as good as Kumar Sir. Your style of trading is different from that of Kumar. A combination of both will prove awaome.
Hi all,
Please go through "Hurst, Rahu and the sky signals" post dated 24th Sept in "vipanisangeetham" blog.
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