Hurst Cycles Trading Software - Accurately Forecast Nifty and Stock Cycles

Sunday, September 25, 2011

Market Update - Sept 26th

So back refreshed for another new week of battle :)

Last week was an excellent week for me as you can see from the posts. So it was a nice weekend off away from the market without having to worry about any open positions. And I think it was a good decision on my side - got almost low tick and almost the absolute bottom to cover the shorts. And maybe today we will get a rally to start re-initiating shorts.

I want to be clear on this. Re-initiate does not mean all in at once. I will go in small increments so as to reduce risk and also hedge a little so that if the market moves up some 100 points extra than what I expect, I will still be ok. OK - so the shorting range is around 4950+or-25 points - can use your own discretion. Also maybe hedge with 5000 calls. Will get rid of this as the situation arises - will post updates. Thats the plan for now. Still bearish for now. This will be just a dead cat bounce in my viewpoint. The 5 week low is expected in the October 1st week timeframe. So maybe around Oct 7th plus or minus a few days. Will tone down on bearish positions before that. But till then the downside pressure should be on. After that another dead cat bounce.

As I have preaching for some time, the 80week(4.5 and 9 year) nest of lows is going to come in November mid timeframe only. Till then its a bear only punctuated with bear rallies. If something changes in this view point which I think is unlikely, I will alert in advance.

Now price targets - I generally dont like to do this. Because it ties up our mind in one expectation. But still a wild guess for me would be around 4400/4500 for the 5 week low and lower that than for the major 80 week low. Still one day at the time. Dont want to go with targets. Will go with my timing model. If price also works out, then great.

Charts below. Just in a picture what I wrote about above.


http://www.sentienttrader.com/

So like I was saying the last major low at 4720 was likely a 10 week low(this software shows it as 20week but I think this is unlikely), and then the 2.5 week low came at 4911 on Sept 13th. So we are now 28days along the 10 week low and 10days along the 2.5week. The software is expecting the 5 week low around Oct14th(I think it will come in earlier because the 2.5week low came in early). Also the 80week low is showing as expected in last week of November(maybe might come earlier as I mentioned above but bit early to say right now). Just explaining so you can understand better what is shown in the chart. If you have questions, please shoot.

There are also some good comments in the previous 2 posts. You may read if interested.

Ok there were some questions on the Hurst material. I have mentioned before. Its not for the faint of heart and its expensive as well. But if you are really interested and really dedicated -

https://www.traderspress.com/detail.php?PKey=99

Alternatively, read what I write here and try to understand for yourself. There is another book that Hurst wrote initially - I will not recommend this one. Its confusing and Hurst wrote it when he just started developing this concept. The above link is best if you are interested and dedicated. Its not going to be easy.

Also here is the Jessie Livermore Audiobook I had promised. Download when you can. I will deactivate the link in few days -

Reminiscences of a Stock Operator - Edwin Lefevre.rar

One more thing - please refrain from asking me about your specific trades. I will not answer. I think I am providing more than enough thoughts and guidance here to be able to figure out for yourself what to do.

One question to readers - Whats the feedback on ZERODHA if anyone is using? Indiabulls is really eating into my profits because of brokerage. Really eating.

Okay - updates later during trading day. As I tried to explain above, my aim will be create shorts as much as possible toward the 5000 area. If we can get close enough.

EDITS:

1. Hope everyone shorted atleast partially at open..I just started a round(20%) at around 4872 NIFTY OCT FUTURES. Will add if we go higher. Also a small round of OCT PUTS 4800. Hedged with 4900 calls of current month.

2. Continuing to add as we go lower..boths PUTS and FUTS..I might go up to 75% allocation for now provided we do not break back above 4850 on spot. Looking very weak to be frank!

3. Trading trading, enjoying ;) Lots of shorts taken from 4870 down to 4840..now covered 50% at around 4765....Will add back as we go up..Keep trading to reduce cost..No longs at all for now..My view..just my view..you are always welcome to do hit and runs!...enjoy ;)


Best,
Lee

15 comments:

Sim said...

Thanks for the update. I use Angel broking and find them really good. Brokerage far better deal than anyone ( dont knw abt zeroadha)plus they are very customer friendly. You could get a very good deal depending on your turnover.

Tehas said...

Matthew bro nice update in detail. I have been using ZERODHA for the past 6 months. Just one word AMAZING. Well it really doesnt matters if you use any brokerage if you are on the right side of the trade, but it dosent hurt to squeeze in some extra profits from the brokerage. I am day scalper, with around 400 options lots daily. Just imagine how much Indiabulls or other trading firm might have become rich. But with ZERODHA it just comes around 1.5-2K daily thats it. As far as the creditability concerned its an electronic age. Just keep on passing the excess funds to the bank account on daily basis.
Its business model is like that of US, charging flat brokerage per trade which is just fantabulous unlike the other brokerage firm which charges exorbitant prices and just take away a good chunk of our profit for no reason.
I just explained you since you explain the market in detail.
I would suggest you to open an account. Well to each his own.
Have a wonderful week ahead. TC

Tejas

EARN AND SHARE said...

Have been following your blog for sometime now...Good one,to say the least..can u pl clarify on the hurst cycles,just for my understaning..

Suresh

Sujatha said...

Hi Lee

Yeah, ZERODHA..no problem they are providing NSE NOW software. not bad at all.

My point is take out your profit "monthly" on regular basis if high profit take it with in 15 days becoz they are "new player" in the market. Protecting profit is good. Let us play safely with less brokerage :) :D

PS : Can;t expect much technical parameters from them.

Rahul K. Jamkar said...

Thank you very much for the book sir.

tanayb51 said...

D/Lee,
Tehas & Sujatha are right.Zerodha is
no doubt more profitable for high vol
traders.
thanks & regards
Tanay

arc said...

Dear Lee,

the file Reminiscences of a Stock Operator. The .rar file is corrupt, can you pl reupload.


thanks
Anil

Lee said...

Thanks for the comments on brokerages guys. Zerodha seems good for me for my FnO trading.

Suresh, read my older posts..I have explained everything in detail many times.

Anil, nothing wrong with it. I just checked myself again. Probably you need to check again..did the download complete properly? do you have the adequate software etc.

anyone else have issues?

Best,
Lee

Sachin said...

Lee,

I would give one word of caution.. dont frontload your options. traders make losses when they frontload in their analysis.

It has gone wrong so many times..

lets take on cycle at a time.!!!

Sachin said...

Lee,

Do you track time cycle for particular stocks? If yes, can you share those as well.

Lee said...

Hi Sachin,
Thanks..

But I want to point out to everyone..I never go heavy..I learnt the hard way that to make money consistently in the market, we cannot go 'ALL IN'..It will bust eventually. But determining points of lower risk and point where the path of least resistance supports your position, then why not take a shot?..With also a point where you know you are wrong.

Price is great. Time is great. What if you can combine both price and time - This is the ultimate tool a trader can have! And that is what Hurst and traditional TA combined has done for me..so far.

So I never try to hit home runs or sixers..Its the singles and the doubles that will grow the account over the longer period of time..But occassionally a sixer or home run will also come - And this gives the additional boost ;)

Hope I made sense. Bottomline is after going bust a couple of times in my trading life, I know enough not to take un-necessary risk. And I trade in and out..Yesterday is a good example..Today again I will do the same..Eventually if the break comes thats I am expecting will, we will be there for the ride. Most others will get squeezed. Perfect example is the reason run up to 5150-60.

Who remembers last week beginning - I said next 2 weeks have the potential to become bad..very bad..Most people had already started expecting 5500, inverse HnS's and so on.. ;) That how the market rolls. The ultimate aim of the market is to separate you from your money. Are you savvy enough to deal with it? Noone is smarter than the market - this is why the path of least resistance needs to be determined. This is down for now and so I continue to be a bear.

Best,
Lee

Sujatha said...

Trading trading enjoying???:) you sleeping, sleeping enjoying???:)

by the way mkt showing opportunity for shorters to create mega shorting opportunity for october??? this month end may show us "path" :) till then let us enjoy this small move too

regds

PS : u can benefit more in options also in zerodha

Lee said...

yeah you bet Sujatha..hehe..Not sleeping yet..I am still adding to shorts...Dont know if market will take me to the cleaners yet!

Lee

Sachin said...

Lee,

A trader should not be a BEAR or BULL. He should trade with directions. If he has a bias of being "bear" or "bull", he will eventually loose money.

Thats my take, i have had an experience like that earlier. I am not saying that your trading style is good or bad. I am saying, dont frontload your analysis saying that NIFTY cannot do this, cannot do that.

Inverse HnS is something everyone knew and hence market surprised. It will come into play when everyone is so bearsih that no body sees nifty above 5200. Trust me.

To each his own.

I like your time analysis and hence visiting this blog. I generally dont visit blogs. I do my analysis and trade.

Sachin said...

Lee,

NOM. And thanks for sharing the audio.

I have not downloaded yet so please keep it open for atleast 2 more days.

Cheers!!