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Sunday, October 9, 2011

Market Updates - Oct 10th

So its pretty sure now I think..That we got the 5 week low on Oct 4th. And that we are in the last bounce from there. I think this is an ABC move from the lows and I think I mentioned last week, we have done the A looks like and in a B now after which we might get a small move high in a weak C. I mentioned Oct 12th as an important date. I see this bounce or sideways move will continue into then. Price wise I already mentioned - 4910-4950 range and then 5030. On Friday market couldnt sustain above 4900 and came down from there. So shorts in that area did well. If we get some more down from here, part booking and reshorting higher will be good. Trade management is important to reduce risk and also remain on right side of the market.



Ok so bottom line is - 5 week low came on Oct 4th. This is the last 5 week cycle before our expected 80 week nest of lows(nest of lows means its also the 40, 20, 10 and 5 week lows). So its an important low. And it will come around 5 weeks from Oct 4th. So around the Nov1st week-Oct 31st timeframe. Will be watching closely in this timeframe for a low and also a chance to buy into some good stocks on cash side. I know there were some comments and questions around this - remember I am waiting for broader market to bottom before looking at stocks. So we will start doing that in Oct end.

But first more work to be done on the downside. Lets watch Oct12/13th as a possible timeframe for topping out this 5 week cycle and heading down. Why does it top early? Because its a bearish 5 week cycle being so late in this 80 week cycle. So it tops early and should head down for 3 weeks or so after that into our 80 week low. Price might remain in this range until Oct 12th before heading down hard OR it might have started already - I am not very sure. But risk reward favours short side greatly right now until a clean close above 5030-5050 range. Keep shorting the rallies till then with some trade management.

A note to all - Please dont ask me questions about you personal trades. I will no longer answer. I did not ask you to get into any trade - then why consult with me on getting out? Is it fair? Also dont ask me questions like - is market going up? Is it going down etc etc. I am posting my clear cut views here daily. If you cannot get that info from here, then I cannot help you. Sorry for being a bit brash. But I have been getting some tiring mails and chats. See its technical doubt or a genuine question, I will answer. Just cannot spend time and energy to try and help with others trades at this point of time.

Will post edits if anything new comes up today.

Best,
Lee

5 comments:

AD said...

Dear Lee

Thanks for your update. It helped me a lot in getting a clearer picture. Also i was hoping if you could guide me to your long term picture of the index. I mean after this large fall and a 80 week low do we get a new bull market or it would be still a bounce to short.

Perhaps you have given the longer terms view on one of your older posts. If you could let me know which one i would be really grateful.

Thanks once again for the amazing work you are doing here.

Anshuman.

AD said...

Dear Lee

12th Oct could be critical since infy is going to declare their results then.

So possibly they could start the down leg.

jonak said...

So u mean to say ...after this 5 week rally Tops out , there is BEARISHness all the way till the 80 week LOW sets in ....and then another HUGE rally ....is it ??

Sujatha said...

Hi Lee

mm..nothing to say about your analysis :)

What's ur live chart says if 5034 crosses directly then in quick time 5169 again? any possibility as usual charts are looking bullish + analysists too :D

r u following "spiral dates"??? as per this 13th/20-21 is turning date for US markets may be + or - 2-3 days always.

Lee said...

Hi AD,
I will post a topic soon on my expectations after the 80 week low.

Infy results..totally forgot about it..Makes sense I suppose since Infy results has been a game changer so many times. This time is bit tricky though. Because there is the rupee factor which has provided a boost in margins. On the other hand, being in the industry I know Infy has been having some really tough times with so many visa issues..They were even thinking of closing up US operations. So maybe it just remains flat. I am not really sure what the market expectation is though. This aint gonna be easy! Thats for sure.
Still my cycles are telling me up for few more days..but thats it.

Jonak, read above and my post and charts more closely. Whatever you need to know is there. 5 week low, then next 5 week cycle which also completes the 10, 20, 40 and 80 week cycle. After which we can expect a rally..How much? I will do a post on this later.

Sujatha, it never is easy is it? But on balance if we have more winners than losers, I cannot complain.

Spiral dates? Not really. But different cyclic principles can coincide. I have a little bit of GANN work as well..Which I try to combine with EW and Hurst..Hence the dates. I still think I am on the right track. However going above 5030-5050 opens up the 5200 range and possibility. Tough to say the least.

Best,
Lee