Bounce is on...For Now..

Well what can I say..been a tough few weeks in the market. This is the reason why I havent been posting much. I dont want to say something stupid and cause anyone else to make a mistake. I had suggested best thing to do maybe stay out until more clarity emerges. I am also really confused what is going on bigger picture wise.

Let me just try to think aloud here - We do know that some sort of major low was seen on Oct 4th at 4740 around. Lets assume this is the 80 week low for now. It was quite early but let us go with that for now. If we go with that assumption, then the 10 week low is due around Nov end/Dec beginning week. From there again, we can expect a decent rally. We should continue to decline into that low area. BUT for now however, yesterday, I think we saw some sort of very short term low below 5000 and we are doing the bounce up. For longs the obvious stop is yesterday's low.

Last 2 days, I got rid of most of my cash positions - the drawdown was not looking good on paper. But still its a small loss only because of the hedges. Overall I havent done so good last few weeks - so I decided to get rid of cash and go back to trading in Nifty. Since outlook is uncertain, I will be able to get in and out of positions. Also I am beginning to rethink on my longer term ideas. But I will keep that to myself for now and present them here when I have some more confirmation.

So long for now in NF..hope to get out around 5100-5150 area. From where again will try to build some short positions up into 5250 area.

Charts posted below.







Trade safe.

Best,
Lee

Pullback continues

So we got a higher open and then pulled back a lot..Today looks like 5100 test might be on the cards. I think its very important for the market to hold 5050-5080 area - worst case should hold 5000 area. Its been very confusing for few days now..I havent been trading much. Using puts to hedge, cashing it when its making some money - this is what I have been doing. Overall like I said yesterday, it does look bearish and expect it to remain this way until last week of Nov when the 10 week low will come in. The problem though is that I see this as the first 10 week cycle after our Oct 4th 80 week low - so we can expect lows to come in early.

After we get the 10 week low, I still expect a good year end rally from there. Problem is how much we will decline until then. We will wait and see. Ideally we should hold 5050-5080 worst case 5000. Lets see what happens. I might not update for few days atleast until I see some more clarity emerge OR I have something substantial to contribute.

Best,
Lee

Week Ahead

Dont have much time for a detailed update. Whatever I said earlier still stands. But I am seeing a few more bearish signs out there. So maybe we remain rangebound until Nov end or Dec first week which is when we can expect the 10 week low?

Today we should attempt higher and then maybe fallback to consolidate. Last week's lows are important. Breaking will lead to a test of 5080-5050 area. This should hold for the bullish case I think. Overall dicey here. Still holding to cash longs but will hedge them today. I have been buying the big scary declines as I have been saying for a while.

More later.

Best,
Lee