Well what can I say..expiry really does suck and throws us off our game. I wanted to do a more detailed post yesterday before market opened but could not due to other committments. Anyhow like I posted yesterday at around market open, I kept on adding shorts throughout the day. And got an average price of around 4995. So not bad for a days work. Also got into Oct 4900 Puts. Overall size is not as great as I would have liked - around 75% short. I could have gotten more in but wanted to wait and watch a little.
Coming to expiry. All my observations were correct but this is what expiry does. Option players are the big guys..In the end, market will end up where they want it to be. When we started taking off above 4940, I started covering as I outlined in earlier post until I had just a little left..So I closed that also..Overall got out around 4950-60. So all in all not a bad thing since got to reshort again higher.
There were several important signs on expiry day.
One is the rupee still went weaker.
FIIs still sold.
Advance decline numbers were poor - showing that just few stocks pushed up.
And still market went up.
These were all signs that Friday would be weak. I wanted to outline all these before market open but didnt get time. Still thought I would mention now.
And really above were the reasons I shorted back into the market in the 5000 range. All in all a decent week. We shall review some charts and setups over the weekend.
Have a good weekend!
Best,
Lee
Friday, September 30, 2011
Thursday, September 29, 2011
New Shorts
Not much of an update today. All relevant charts are there in last post. Today as per my last comment in last post, I am building shorts from open till now both NF and 4900 PUTS.
Best,
Lee
Best,
Lee
Wednesday, September 28, 2011
Top in?
I really think so. For this particular move. There are various portions of evidence supporting it. I think unless we manage to get above the 5030-5050 range, I think it makes sense to sell all rallies. And cover on declines partially to reduce cost.
Today we should see sub 4900 for atleast some time. Whether we can stay there is the question. If we can, then below 4870, we can see more declines.
If we get to 4720 area this time, I do not think it will hold. We will slice through it and the next level to respect would be 4650. Still once step at a time. Its always easy to think oh we are going to 4650, 4200 etc or even 5500, 5700 and sit on a losing position. Take one day at a time.
OK enough of today's rant :)
Coming to markets, like I said, 4870 level is crucial. And above 5030-5050 level. In between kind of no mans land but still lot of opportunities to go in and out to get a better price on your positions. This is important. I mean if you are in profit, just book 1/3rd of position. Hold the rest. While this reduces your profit potential, it is a great psychological boost - to hold the rest of the position until target. And as it gets closer to target, cover one more 1/3rd. Then ride the rest of it. I cant tell you how much of a difference this makes!
OK thats it I promise :)
So I did cover a little yesterday..might just sit tight today or cover a little bit more..Reasons are as given above. Just balancing. Rallies will come to re-add back.
First the cycles chart -
Ok next a normal chart look. I have commented on the chart this time -
Another look. This is interesting. This is the Nifty Dollar Index - Defty - Are you able to spot whats interesting?
The DEFTY had already broken the lows corresponding to 4720 on Nifty. So basically the Nifty in Dollar terms is much more bearish that Nifty in Rupee terms. So what do you think FIIs are doing or will be doing? Think about it a little.
Ok thats it. Trade Safe!
If I do anything today, I will post. One thing I didnt post yesterday was that I reentered by NOV 4700 PUTS that I was trading with on the last big fall. I had sold them to buy back and I did that yesterday in preparation for the next leg down.
I also posted some comments in earlier post(s) - you may read them if you missed since I think some good info is there.
EDITS:
1. Not exactly sure what is going on. So stopping out of several of my shorts. Covered few in the morning like I mentioned I might. And rest at around 4936. Better be safe than sorry and live to fight another day. Unfortunately too much of news is coming out tomorrow..so another wild card. Probably around 40-50% short now. Above 5030 something else is happening so will likely stop out fully. Shall wait and watch.
2. Wow..that was some spike..toned down on shorts again..When in doubt better to stay out or reduce exposure..Maybe around 20% short only now. Will reevaluate tomorrow. Yeah I know I might regret this tomorrow..But still better safe than sorry.
3. Dont know. I am out fully. Hope the market does not crash tomorrow. Will reevaluate and come back. For now, bulls look very strong. Expiry sucks! :)
Best,
Lee
Today we should see sub 4900 for atleast some time. Whether we can stay there is the question. If we can, then below 4870, we can see more declines.
If we get to 4720 area this time, I do not think it will hold. We will slice through it and the next level to respect would be 4650. Still once step at a time. Its always easy to think oh we are going to 4650, 4200 etc or even 5500, 5700 and sit on a losing position. Take one day at a time.
OK enough of today's rant :)
Coming to markets, like I said, 4870 level is crucial. And above 5030-5050 level. In between kind of no mans land but still lot of opportunities to go in and out to get a better price on your positions. This is important. I mean if you are in profit, just book 1/3rd of position. Hold the rest. While this reduces your profit potential, it is a great psychological boost - to hold the rest of the position until target. And as it gets closer to target, cover one more 1/3rd. Then ride the rest of it. I cant tell you how much of a difference this makes!
OK thats it I promise :)
So I did cover a little yesterday..might just sit tight today or cover a little bit more..Reasons are as given above. Just balancing. Rallies will come to re-add back.
First the cycles chart -
Ok next a normal chart look. I have commented on the chart this time -
Another look. This is interesting. This is the Nifty Dollar Index - Defty - Are you able to spot whats interesting?
The DEFTY had already broken the lows corresponding to 4720 on Nifty. So basically the Nifty in Dollar terms is much more bearish that Nifty in Rupee terms. So what do you think FIIs are doing or will be doing? Think about it a little.
Ok thats it. Trade Safe!
If I do anything today, I will post. One thing I didnt post yesterday was that I reentered by NOV 4700 PUTS that I was trading with on the last big fall. I had sold them to buy back and I did that yesterday in preparation for the next leg down.
I also posted some comments in earlier post(s) - you may read them if you missed since I think some good info is there.
EDITS:
1. Not exactly sure what is going on. So stopping out of several of my shorts. Covered few in the morning like I mentioned I might. And rest at around 4936. Better be safe than sorry and live to fight another day. Unfortunately too much of news is coming out tomorrow..so another wild card. Probably around 40-50% short now. Above 5030 something else is happening so will likely stop out fully. Shall wait and watch.
2. Wow..that was some spike..toned down on shorts again..When in doubt better to stay out or reduce exposure..Maybe around 20% short only now. Will reevaluate tomorrow. Yeah I know I might regret this tomorrow..But still better safe than sorry.
3. Dont know. I am out fully. Hope the market does not crash tomorrow. Will reevaluate and come back. For now, bulls look very strong. Expiry sucks! :)
Best,
Lee
Tuesday, September 27, 2011
Quick Update
Ok..now I suppose everyone is feeling slightly to raving mad bullish and not at all bearish..cursing themselves for taking those short positions hehe..Its good. This is how everyone is feeling..and is a natural cycle of market psychology nothing else.
So as I mentioned..Options were disintegrating yesterday so I covered them all..I had OCT PUTS...did not want to hold against the obvious decay in price and this turned out to be a good decision.
SO...I am holding shorts today..October NF..hedged with 5000 calls which I entered yesterday around 17-18. Its 33 right now. So it offered me some sort of protection. Not much but something. And also in these kind of situations, I hedge at the ratio of more than 1:1..Means if I have 2 lots NF short, I might have 3 or 4 lots Options 5000 call long..This is because of deltas. A google can help you understand this better. I am not the best person to explain.
So coming to the crux of the matter, I dont think we are entering a new bull move. This is just a squeeze of the shorts. And this is the same game thats played always..over and over again. Once all the shorts have covered or have been squeezed, the next move down will start. Is it ready? Are we there yet? Maybe..But definitely close.I will be trading today according to this principle.
Updates will follow with charts. Havent got a chance to look or analyse them yet.
EDIT:
1. If you have been trading/adding short like me since morning, now maybe a good time to take some off just to be on safe side and also to reduce shorts cost. I have done this and will be going offline in a little while.
Best,
Lee
So as I mentioned..Options were disintegrating yesterday so I covered them all..I had OCT PUTS...did not want to hold against the obvious decay in price and this turned out to be a good decision.
SO...I am holding shorts today..October NF..hedged with 5000 calls which I entered yesterday around 17-18. Its 33 right now. So it offered me some sort of protection. Not much but something. And also in these kind of situations, I hedge at the ratio of more than 1:1..Means if I have 2 lots NF short, I might have 3 or 4 lots Options 5000 call long..This is because of deltas. A google can help you understand this better. I am not the best person to explain.
So coming to the crux of the matter, I dont think we are entering a new bull move. This is just a squeeze of the shorts. And this is the same game thats played always..over and over again. Once all the shorts have covered or have been squeezed, the next move down will start. Is it ready? Are we there yet? Maybe..But definitely close.I will be trading today according to this principle.
Updates will follow with charts. Havent got a chance to look or analyse them yet.
EDIT:
1. If you have been trading/adding short like me since morning, now maybe a good time to take some off just to be on safe side and also to reduce shorts cost. I have done this and will be going offline in a little while.
Best,
Lee
Monday, September 26, 2011
Bounce back continues..
Sorry for the late update guys..dont have anything more to say from yesterday or from what I posted comments section yesterday - If you missed it, I would urge you to read it now.
Anyhow I am shorting into these levels here. I dont know if it can clear 5050 but I think until it does so, downside pressure remains. Take it for what its worth. You know my bias. 4925 upward till 5050 are good areas to short gradually.
EDITS:
1. I have to mention..I have closed all my NIFTY PUTS at a loss of around 25%(just quantifying the loss on the option values alone - if you look at my full account, this is just maybe 0.5% loss or less. Its all about money management..which is why I mentioned before its not about being a rockstar or owning the world in a few days..just to make profits consistently - Anyone who is a full time trader or experienced trader will understand what I am talking about here...Atleast I hope so.). Full disclosure - Just mentioning openly. I mentioned my profits so mentioning my losses. I am closing all options today. I do not know. This is going too fast and too strong for now. Still holding my NF shorts and earlier updates still stand. Remember - do not trade beyond what you are comfortable on.
2. Just wanted to be clear here - Reason I closed PUTs is coz of time and time alone. Options always have a clear expiry date. Cannot hold hoping for something - similar to holding some milk close to expiry date lol. What I wanted did not come, so closed..Nothing else. After I closed I have been adding nicely in Futures(OCT) with hedges on 5000 calls. Coz I am still bearish.
Best,
Lee
Anyhow I am shorting into these levels here. I dont know if it can clear 5050 but I think until it does so, downside pressure remains. Take it for what its worth. You know my bias. 4925 upward till 5050 are good areas to short gradually.
EDITS:
1. I have to mention..I have closed all my NIFTY PUTS at a loss of around 25%(just quantifying the loss on the option values alone - if you look at my full account, this is just maybe 0.5% loss or less. Its all about money management..which is why I mentioned before its not about being a rockstar or owning the world in a few days..just to make profits consistently - Anyone who is a full time trader or experienced trader will understand what I am talking about here...Atleast I hope so.). Full disclosure - Just mentioning openly. I mentioned my profits so mentioning my losses. I am closing all options today. I do not know. This is going too fast and too strong for now. Still holding my NF shorts and earlier updates still stand. Remember - do not trade beyond what you are comfortable on.
2. Just wanted to be clear here - Reason I closed PUTs is coz of time and time alone. Options always have a clear expiry date. Cannot hold hoping for something - similar to holding some milk close to expiry date lol. What I wanted did not come, so closed..Nothing else. After I closed I have been adding nicely in Futures(OCT) with hedges on 5000 calls. Coz I am still bearish.
Best,
Lee
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
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
Subscribe to:
Posts (Atom)
