5 Week FLD

As I mentioned yesterday the 5 week FLD is crossed. Chart below with comments added.



So yeah it would have been nice to hold to the shorts for one more day or two. But ok a profit is a profit. What we are seeing right now is action into the 2.5 week low. I want 4800 area to hold as a maximum. Break of this will damage whatever the bulls have built till now. 2.5 week low is expected Friday or Monday as I mentioned earlier and from there we should have another decent rally into the target mentioned in chart. So I started going long yesterday with 4900 Puts as Hedge. I will add more today and on Monday as per the plan.

I read the comments. See the way the FLD works is its sloping down here right? Its an image of price action in the past. So crossing it on one day - and next day a 2.5% drop happening might not be enough to push it below the FLD. The cross is still valid. If you see the chart you will understand what I am talking about.And the FLDs do tend to act as support and resistance lines.

Chandra, not intraday. It happened a day back. See the chart posted above. And its still a valid crossover.

GD, I remember you asked about SPX analysis. While I dont have a latest chart. You can take a look at this analysis. Maybe on weekend I will do one of mine. This guy is very good and is one of the people I learnt a lot from on Hurst. He was earlier looking for the 80 week low same as I was but now he seems to have changed his views a bit looking for a major low next year mid. I can see his rationale so something to keep in mind. But bottomline is, it does not matter right now for short term trades.
2 analyses done below. One for Nov 28th and one for Dec 7th. You can see in the posts the difficultly right now everyone is facing with coming up with an accurate phasing of the cycles.

Link to SPX Analysis Nov 28th

Link to SPX Analysis Dec 07

Best,
Lee

5 week FLD

Quick update. 5 week FLD has been crossed generating a target of 5350. So I was short from yesterday because of the expected 2.5 week low expected Friday/Monday. I covered most shorts at 4950 Nifty TODAY - I was very clear on this and the rationale behind it. I also started to go long because the FLD has been crossed today and we can anticipate close to 5350 soon. Charts will be posted tomorrow.

Best,
Lee

Wednesday

I dont have time for a detailed update today so will do so tomorrow.

Bottom line is 5 week FLD is not crossed. And the 2.5 week low is expected around Dec 12th - Which is next Monday. So we might not cross the 5 week FLD instead might try to but fail and then fall down a bit before moving back up.

This is really just speculation but I dont have any action signals yet. I might try some small shorts today via puts playing for the 2.5 week low OR I will use hedged futures to try to play for some downside. Target is however anybody's guess. 5000 seems to be strong support and ofcourse below that 4950-4875 area. 4800 is rock solid as per options data. So I think shorts should be hit and run only. Or be defensive in playing for it. The 5 week FLD cross is near - So we will have to be long from next week onward as per my calculations. Will post charts tomorrow.

EDIT
Changed my mind. Posting a chart here with some comments and showing the current FLD position. Keep in mind no short signal is generated but I am trying some shorts with tight hedges. I will add until bit more higher into the 5200 area. I agree with Kumar Sir - above 5235, then better cover all shorts. Hedges should protect me till then. More comments on the rationale in the chart.



Best,
Lee

Week Ahead 12/5

Well last week was a pretty great one for the markets. It was also a good one for me. A excellent target based trade driven by FLDs and followed out to almost the dot. So since my target was achieved on Friday, I exited all longs at 5050 area. I know we are higher now and might also gap up today. But my target was achieved and so I took profits. I think we will get a chance to reenter or we can reenter on the next FLD cross.

I have tried to explain things below using charts.







The first 2 charts just show an explanation of things that happened so far and how the trade worked out last week. The last chart shows the next move to look for.
As you might have noticed, ST has almost confirmed the last low at 4650 as the 80 week low. But remember its not up up and away from here. I still think we have major pain coming next year...but just speculation now.

Anyhow back to the last chart. Note that the earlier 2 charts shows that targets of the 20day FLD cross was achieved at 5050. And now we are actually in between FLDs. So at the moment no higher targets are generated. But it will once the 5 week FLD is crossed as shown in last chart. I expect we will have some pullback this week and then try to cross the 5 week FLD. So lets say we cross the 5 week FLD at around 5000. If so, we have a move to around 5350 generated (5000+(5000-4650)). Note that this will also generate a bigger target due to the 10 week FLD cross. And this cross is giving a very unbelievable target even for me - 6050 Nifty (5350+(5350-4650)).
(EDIT: I just read Kumar Sir's update...Funny!..And also makes me a little more confident on this.. :) But still damn skeptical! )

Well keep the last one one the backburner for now. I am really really skeptical about it. First let us cross the 5 week FLD which will generate a 5350 target. Then we see.

Chandra, I dont have good charts generated using Nifty. It might be because of lesser amount of data. This is why I use Sensex. Somehow have to deal with it this way..i.e I think Sujatha used to say - Watch Sensex and Trade Nifty :)

BTW, thanks to everyone for their compliments on last weeks analysis. Its always nice to get appreciated. Things really worked that time. Hope it does this time too.

I am totally flat now..But I will post as soon a the next trade is generated. Till then wait and watch.

Best,
Lee