Hurst Cycles Trading Software - Accurately Forecast Nifty and Stock Cycles

Monday, September 5, 2011

Market Update - Sept 05

Yesterday even though the whole world was in red, our market managed to get through without any major injuries..This lends more evidence to the idea that we might have one more wave up pending. However the situation in global markets worsened considerably afterward and today and everywhere is in deep red..And no recovery yet.

So today will be interesting. Will we set another low close by and rally from there? Or atleast make an attempt? Maybe? We shall see. After my update yesterday, there were some good opportunities for intraday longs. Watch out for same today..BUT caution..We have a notorious way of doing what is least expected by most! :)
I still feel we might have a few days of bounce/rally left. But we need to hold 4920/4900..Worst case 4870. Below 4920/4900 itself no longs should be held. Until then we can try longs with appropriate stops.

Ok now a look at the Hurst viewpoint.



Now what is new here is that the software is looking at the 4750 low we had few days back as the 20 week low now. Which is interesting to say the least! Why? Because this means its basically saying the last 20 week low ran very late..Almost 29.3 weeks. Is it possible? Yes ofcourse - basically once we enter bearish periods like now, cycles tend to extend.

Why? Because - in bullish times, lows are early and hence cycles a bit shorter as there is less selling pressure and more buying pressure. Folks can be falling over each other hurrying to jump on the train before it leaves again. The reverse tends to be true in bearish times as it takes longer to get low enough or "safe enough" to allow speculative buying (catching a bottom in bearish times). Hope it made sense.

So till now I was thinking it could have been the 10 week low but lets go with the view that the Sentient trader software has right now. This does not change much for us at this point..Except that there is the possibility that instead of the November timeframe MAJOR low, we can extend into December. But lets fine tune all that later. Now lets look for a top soon. Unless ofcourse its already in at 5050 odd. Tough to say at this point..Need to watch a little bit. Ofcourse the 20 week can top very very early being a bearish cycle as I have explained before..So caution should be excercised here.

I had promised a US market view soon..I will try to put that up asap. I was also thinking of doing an analysis on Reliance soon because I think it might be one of the leaders in the next bull market.

EDITS
1. To tell the truth, even though I expect a bounce still..I am very wary of holding longs now..Why? Because of possible crash like situations out there in the global markets..Lets just focus on hit and run trades only on the long side..Intraday only.

2. Short side. I am going to focus over the next several days on building a core short position with hedges. I will only scale into this very slowly because I still see a possibility of a rally to 5150 area..Hence the hedges as well. So strategy is to start a line..but add only closer to 5100/5150. OR on a break below 4920.

3. As mentioned started my short lines near the open. But this is a possible bounce zone..4940-4920..As I hinted above..Part book and reshort higher? Not sure but I am holding for now with hedges. Break 4920, and we get into a more precarious state.

4. Stopped out of all shorts at 4980 for breakeven..This baby looks like going higher..If it crashes, let it do so without me..Will reshort on retraces then. Good night..going to sleep.

5. Wow what a move after I covered..talk about good timing..WHEW!

6. Nice..couldnt sleep..Making some good money on them hedges..I should've have mentioned that I was still holding them :(...Anyhow doubled up on them also..So carrying a good profit on it.



Best,
Lee

6 comments:

Sujatha said...

Hey Lee,

Your chart is like "Oonam's" pookolam

Really tough for me to understand these "cyclings" and all. agree 4920 is main Key as of now. Rangebound market. Now it's one's own risk to play in market :) instead copycat :D

This time 4927 breach decesively then possibilties to breach 4720 too but culprit holding :P who's
stupendous effort is this?? holding the support level well?? huh.

Lee said...

Haha Sujatha..too many colours eh? :) Yeah I know..but unfortunately I dont know how else all the cycle details can be shown..I will try and clean it up a bit..

For me this is an important tool in my arsenal..In addition to our usual traditional TA methods..

Did you start buying any longer term puts yet? I am dipping my toe in ;)

4927 breaks, then 4720 will too..I think very good chance for this. But will we chop around for a bit more? Possibilities are very high.

Sujatha said...

Yeah Lee,

In sept. series i am disposing then and then @ certain cam or fibo level buying again @ retracement level as premium is vanishing. it's like tomatos :P

october series yes holding lower level puts bought @ single digit :D now trading at double digit don't ask strike price :) am in profit watching sensex nd doing nifty will book profit or hold according to sensex i will not calculate much on options apart from this.

Sujatha said...

That's good what u did. It will not crash without u :)

check 30min. chart 26th aug. to 5th sept. solid supp. 4949 below 4927 then very deep. as it's a RB mkt v can take advantage of the volitle for fast trade. but timing s the problem for u :( will give hint for u whenever time permits in ADVANCE. u can cross check for "short term trade". I will change often to 15 min. hrly and even to 5 mins. chart depends on the mkt trend. But EOD is always King :)

regds

Lee said...

Not to worry Sujatha..I am taking advantage of this breakout via some calls...so happy! :)

Kumar Technicals said...

Dear Lee!

Either colour, charts or levels but we can not beat Sujatha. East or west but Sujatha is the best:)

Very good going, keep it up:)

Rgrds

Kumar