Hurst Cycles Trading Software - Accurately Forecast Nifty and Stock Cycles

Thursday, September 8, 2011

Topping Process

I can only view this current market action as a topping process. Nothing else. As I have been saying for a while 5200-5250 is rock solid. Can we do a little more than that? Yes possible. Probably around 5300 and above is when we need to reverse to fully bullish. Till then sell the rallies is the mantra for now.

I did enter some shorts yesterday. I will add today and continue to add as long as market remains below 5250. One thing I will say - The way I operate is I keep my initial positions very very low. And add as the situation arises - this may be break of certain pivot levels or it may be on rallies toward certain point on negative divergences. Setting a position is not easy and almost is never popular - because we are always going against the grain. I mean to say a short term trend follower thinks everything is quite bullish now. But a longer term guy says this is just a bounce in the downtrend. So a conflict arises. It ALWAYS about timeframe. As a trader we always need to decide what is our timeframe. Different people are comfortable is different timeframes. Has to do with your frequency and timeframe. Find that out and you will be so much more in sync with your trading.

So many people emailed me around learning Hurst methodology. What I will do is over next few weeks is probably present some material around that because I know its very expensive to learn this by yourself. What I will suggest is going back and looking at some of my earlier posts first..I mean to say there is one called 'backup from VFM' sometime this year probably couple of months back. Start from there and few posts after that. Then from next few weeks I will post more around learning and understanding this. Please understand this is not a simple thing for me to do. So it will take some time. But I will still do it.

Trade safe. Keep emotions out. Run your trading like a business.


Wednesday, September 7, 2011


Extremely strong US market. Will our market remain true to form and take that as an excuse to take profits and sell off? Quite possible. Either way expect the unexpected and remain vigilant.

Replying to comments from earlier post -

Thanks a lot to everyone for your comments in the earlier post.

Sujatha, may have been a bad decision to short yesterday? Early? Maybe...I am not sure..still will work it out. I was very clear on it going to 5150 and above but still could control its small so I am not too worried..I might also exit them today depending on what I see.

Nov Puts because of cycles only. No other reason. Oct also might work out but not sure how long this current bounce will run. Next week is a good time..cycles view wise..for us to turn down. Price is the grey area. 5200/5250 is still what I am thinking.

Not much more to say today. Same views as yesterday. My favoured scenario had always been a C wave - more bounce - into the 5150/5200 area. But even though I took some advantage of it, I could have obviously done much better. Its funny how the markets plays with our psychology isnt it? Still we are only human. We will make mistakes. The ability to cut it and go for the next trade is what will make a successful trader. I think this is one of the most important things I have learnt over the past 3 years and I think what everyone should learn - never to fall in love with a trade. Cut your losers and let your winners run. After all its just another trade.

Today could be interesting. As I mentioned, I did enter some long term puts and some shorter term NF shorts yesterday..Very small amounts but still I think I am early on this. So I might close some of them today on weakness. I think that might be the prudent thing to do.

If time permits, I will post my reliance and US markets analysis here a little later.


1. Covered all my pilot shorts on the early weakness. Not much of pilots were they? lol. Anyhow will play on intraday longs now..Market may be telling us its not ready to top..not just yet! I will update if I see something differently..For now things do not look too bearish. Market may have a date with the 5180/5200 area at a minimum.

2. Done with intra longs. Those were some good points to scalp. But beginning to look weak again. Will start adding shorts from here as we go higher.

3. I did add a quite a few shorts in there..Not very sure but it looks like this cycle has topped and we are going into the next 2.5 week low due sometime toward mid/end of next week. We shall see.


Tuesday, September 6, 2011

Bounce back continues..

So for the past couple of days, I have been mentioning that my preferred scenario is for the bounce to continue after consolidation above 4920 - And that is what the market did.

In between however, I began to wonder what if the global markets crash today - what then? There were reasons. Merkel's loss(big big news from a Euro perspective - its going to breakdown very soon), Euro bank issues, US economic news etc..It could have all come to a 1987 style move today - but there were some interventions out there that happened which has prevented this for now - I generally dont like talking fundas but just thought of mentioning this because its important and is going to come back to bite us very very soon. This may be reasons for the next big fall coming soon.

However we are traders and yesterday when the market was breaking out above 4980/90, I covered all shorts almost at breakeven but left the hedges on and doubled up which is showing a good profit today. I plan to cover atleast 50% of this if not ALL of it today. The other option is roll up to higher strike prices to reduce the amount of money at risk(holding 5100 calls..can roll up to 5200 calls).

So now as I have been saying is my preference, we are in a C up of this particular corrective structure - likely some sort of wave 4 or wave B. After which a final wave down is pending into November end timeframe. Topping area? Good question. I have been saying 5150-5180 for a while. If we get there, 5200/5250 area is strong strong resistance(previous breakdown area). So thats the point to build shorts. However if we manage to somehow get above that, we have to reevaluate. But we shall see. I dont favour us going above 5200 by much for now. So I will be playing accordingly.

Oh and one more thing. Today my blog hit 50000 unique views/visitors. Inbetween big breaks and what not. Still I am back and running - I hope better now than before. And also hope I will not ever stop this again.

Thanks to all for their support and encouragement in this journey!


1. Booked the calls. Not very happy with opening. Into resistance area now. I also started rebuying my longer term puts(Novemeber 4800,4700 strikes) again

2. So been adding few puts in small amounts only for November series. This is longer term so I am not too worried about small term fluctuations. Also been adding some NF shorts with hedges placed. Again small amounts because I am well aware that this can go till the 5200/5250 range.


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.

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 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.


Sunday, September 4, 2011

Quick Update

Dont have time for much of a detailed update today. I am short from Friday..not too plan to cover today on initial weakness..Might not go long immediately but there is a possibility of a bounce(C within an ABC structure) which might go above last week highs or get close...Play with stops if going long - 4870 might be a good point to watch as a stop. But not very sure. Waiting and watching.