Couple of Questions to All

I had a couple of questions/requests to all...I would appreciate it if anyone responds helping me out with this.

1. I wanted to build an intraday database on Amibroker esp for Nifty but am unable to find good sources of data for this. I have a subscription to desitradermall but downloading each days worth of data and building a DB for more than 2 years is a monumental effort..I know backups are there but even there, the data has differences, is a little bit spotty..so I tried but was not able to get this done..The main reason I am trying to do this is to be able to put EW counts on the whole correction we have got from the last top. So any help in getting the database built up would be appreciated.
The other option is - if anyone has the database already in ami, I could just copy it over and it should work - Please comment if anyone can help me out in this.

2. Tax question. I havent filed anything in my tax returns related to stocks till now. I am unsure how I need to go about this. I started trading back in 2003 mid/end timeframe. So till now no details about my trading operations in my tax returns. But I have been filing tax regularly based on my normal day job income and details. So basically its an omission from the returns.
The main reason I wasnt concerned in the initial years is because I wasnt really making much but now I need to do this to avoid future problems. So I am unsure how to go about this. Is there any way I can account for all the previous trading details in my next return? Will I get in any sort of trouble wrt fines etc if I decide to show all years or just the past one year? Is there any way to avoid this? What is the best way to get everything back to normal and legal? Any help is appreciated.

Comments and suggestions requested.

Thanks,
Lee

Friday - EDITED

SO..market reopening after 2 days off. Will be interesting to see how we perform today. In my opinion its bit of a toss up today. Since we were closed for 2 days and other markets performed reasonably good in those days, we should have a tendency to catch up. However today US markets were weak. So we might also exhibit weakness sometime during the session today.

Last time, I mentioned that the 10 week low was in and we are bouncing out of it..And what a bounce. Going in even at 4840 levels yielded awesome profits. So it was a good trade and call. Now as I have mentioned several times before, we are in the last 10 week cycle of the 80 week, the 4.5 year and the 9 year cycle. So this is an extremely bearish cycle. Which basically means the top of this cycle will be left translated. Basically that is how the bearish cycles will work - The tops will come in very very early in the cycle - thats how we get left translation. In bull markets - exact opposite - Right translated cycles where the peak is formed very late and then weak and quick declines. Hope I am making sense. This one might be forming the peak already around here or maybe a bit more higher around the 5100-5150 range. This is what I am looking for now to slowly scale into shorts.

I am not sure if I should start today or wait for a few more days. I will take a call as we go through the trading the day. 5100 area and above might be good to start scaling in slowly. The important thing is not to get too confident on this and also to play position sizing adequately.



Now if you look at this chart, the breakdown point is quite clear - 5200. This is where the descending triangle broke down and culminated in a devastating move down to 4750. So this is why I was saying any rallies have a maximum cap of this area. If we do manage to go above and sustain above, then we have to admit that something else is going on. We arent supermen with insights into the future - we are traders - so we have to operate on IF-ELSE scenarios - sorry just grounding expectations here. We have good odds but that does not justify not using stops or stop out points.

So for the bearish case, 5200/5220 is the point where it should not go above.

Over next few days to 1 week is the timeframe I expect for this topping process. We should back in and out toward this. Not sure exactly what structure we will take but let us see. My bias is very clear - I will be looking for a top during the next few days - maybe sometime next week - maybe sometime today. Will wait and see how we trade today because making any further decisions.

Thoughts and Comments are welcome.

Oh and by the way, Chandra, I do have analysis on US markets also. I will put this up over the next few days. I do tie up my analysis b/w India and the US very closely even though I dont mention it here. I will explain more in next post(s).

EDITS

1. Big Gap up..Shorted a pilot position on the gap up and hedged it as well. Now wait and watch if this warrants additions to position.

Best,
Lee

10 Week low IS IN - EDITED

Yep..sure looks like it. Yesterday before market open and I think even few days back I mentioned that likely the 10 week low was coming in and looks like it did last Friday/yesterday. I remember few weeks back I was mentioning of a likely low around this timeframe. In between I remember thinking it would come early. Overall worked out fine - except for the fact I missed to take full advantage of the shorts I had due to the huge gap up yesterday.

Unfortunately that's what happens at the fag ends of cycles. Still we know its a low...so take what we have and run..See the open yesterday..never even came close to it after the open...What a rally!..shows the power coming out of the 10 week low. So I humbly covered my shorts around 4840 and went long, pyramiding as we went upward so overall did good yesterday. Today, respecting the holidays, I might book profits. 4960-5000 area might be a good area to do this. We will see where it opens.



So like I mentioned yesterday, the last 20 week lows came in likely on June 20th. And now we are 70 days from that low = 10 weeks. So its the 10 week low alright. And what next. As has been the case on the last major lows, the rally and tops have been extremely left translated. This one should also be the same since we are in a bearish cycle and also this is the last 10 week cycle of this 80 week, 4.5 year and 9 year cycle.

So expect the highs to be set in within the next 4/5 days to the next 2 weeks. And the price should be something around 5100-5180(if we can clear 5000 for good). 5250 will be the stop loss for the bearish case to work out. If these work out the way I think it will, we will top around there and move quite lower into the Nov 80 week low..Somewhere below 4000/3800 is what I am thinking for the coming last leg. But one step at a time.

I will post some normal TA and charts next. Along with some more considerations. If you guys have any questions or comments, you are more than welcome. I see lot of visitors but very few comments..I hope people are getting what I am posting..If not, then just ask.

EDITS:

1. Covered 50% longs at 4988 AVG. Hedged rest 50% at same level. Now wait and watch.


2. Covered rest at 4980..Closed hedges also..Totally FLAT now. Just watching. I expected bit more but looks like everyone is scared of the holidays..Still not bad for a 1 day counter-trade :)

3. Got to go sleep. But if I was awake, I would try scalping a bit on short side now..Unfortunately cannot..So cheers all and I will post some more ideas over next 2 holidays. Its past 12:30am here and I need to go to work tomorrow..so GN!

Best,
Lee

Short term bottom in or close?

Well as I said last Friday, I did short near the top around 4870 and am enjoying some nice gains as of now...I believe we are close to a short term bottom or might set it today.



Need to watch this a little bit. Now we can assume that the last 20 week low was set around June 20th timeframe. I believe there was a question on this in the comments section so yes my answer is this is my preferred possibility. If so, then right now we are setting the 10 week low around now and from here we can expect a short term rally for a few days if not for a couple of weeks. But as has been the case for the past few lows, this one also should be left transalated and we should set the high in a few days and continue down until the Nov low - the 80 week major low.

So a dead cat bounce is all we can expect at this point. Lets see...Around this area till 5000? Possible. Clearing 4960-5000 and staying above will target 5100 around. More than that, is tough.

So today my plan is to cover shorts today..I am not sure, we might get a gap up and then consolidate for a while..a lower low is also possible. So wait for a while is what I think..And when going long, I will also hedge it considering the uncertainty and also the shortened trading week this week. If I go long, 4650 is the area I will be watching with great interest. Holding this is crucial for the short term uptrend. Longer term, I expect the market to slice through this like a hot knife through butter. But lets wait a little bit on that ;)

EDIT: Covered at open and trying few longs...

Best,
Lee

What next?

Good question right? I am in a dilemma right now. As I mentioned earlier, cycles are very unclear right now so trading this is tough. I was expecting some sort of bounce into 5100 range - may happen or not - need to wait and see.

But, so far, the pressure or money flow has remained on the downside and that is expected to remain so until the projection of the Nov low.

Trading short term has been volatile and full of whipsaws.

This is the problem. And I am not sure how to resolve it unless you are ready to take some pain.

Today, I will look to close the few longs I have and maybe go short in few amounts. Not sure if the market will let me. Its very fluid right here. Need to see how the market is trading before making a decision either way.

The other problem is within US, tomorrow is a big day...there is a fed statement..there is lot of news coming out...So news will direct the trading atleast on a short term basis.

Wait and watch.

Best,
Lee

Trying on long side

Just started..4800 is support for today..Just started very small..will buy on dips.

Best,
Lee

Looks Corrective - For Now

Its corrective all the way and may last for some more time. There is an outside chance that the 5 wave down has started but it only gets confirmed below 4800. And then also it can quickly find support.

So for now, its essential to be quick and nimble. Scalping and very quick trades might work. So for some time I am not going to post my trades because it will changes quickly in and out. Yesterday is an example. I couldnt post frequently enough depending on how I traded.

As I have been saying so many times - one thing is sure - longer term/medium term is bearish into the expected Nov 80 Week low. Nothing else is certain at this point of time but it should clear up over time.



Now as you can see from above..Its very confusing. The main confusion point is where is the last 20Week low. Unless this is placed, we cannot resolve the lower timeframe lows. 10 Week, 5 week etc. See the questions marks? That shows the confusions. I am hoping things clear up by next week or so. Till then we have to scalp.

Problem is earlier I was thinking that the June mid low is the 20 week low. And what we are getting now could be either a 5 week low and then in few days the 2.5 week and so on. But this picture shows something different. That the last 20 week cycle may have extended - which is bearish - and low we might be coming out of a low point.
If this is the case, then a bounce higher above 5000 into the 5150-80 range cannot be ruled out. So as I said confusion overall. But being bearish overall is safer. If you are bullish, I will suggest, keeping the trades short(timeframe) and safe. Also hedging while it reduces the profits, gives some peace of mind. This is how I will be playing for next 1-2 weeks - both longs and shorts.

If you guys have any questions, please feel free to ask. I sense that some questions are there..I saw a few here and on mail which I tried to answer..but still anything else, please feel free to shoot and I will answer them over a weekend post.

Best,
Lee

Talk about bad timing

Yeah..I know..should have held on..Its funny how the market works and plays with our emotions..I am back short in very small amounts. Will add if conditions work out.

Meshach, Already posted details of the cycles below. You may check the charts below.

EDIT: Can see a 5 wave move intraday. This may be an A wave of the B wave within this 4th wave move. So means we can add shorts on upmoves today to cover either later today or early tomorrow. Then one more bounce upward lasting maybe couple of days to complete the 4th wave move.

All guidelines only. Trading 4th waves are always tough - Its what separates the men from the boys! :) If in doubt, stay out.

Best,
Lee

OUT

Got out of shorts on the morning dip. Closed all positions. In hindsight, I should have closed around 4800-4850. Nevertheless I did earn some money through the hedges but not ideal. Will watch for now..And plan to short higher. My biggest worry right now is a possibility of 5150-5180 coming in few days.

There is still chance for dips here..But want to watch for some time.

Thanks,
Lee

4950-5000 range

Well the rally continues. I did not expect it to do this much. I guess thats why they call it trading and the stock market. Cant expect things to work out all the time.

Anyhow today would be a very interesting day. Because after this big rally in the US markets, it would be interesting to see how we react. A gap up is sure but then what? We have been notorious for spiking on overseas markets and then giving it all back and more..So today will be interesting to see if we stay to form or do infact take support somewhere and rally.

For now 4750-4800 has established itself as temp support. And clearing 4950-5000 range and staying above, we can attempt the 5180 area again. Kpl provides a view on this here-

5180

I am not very sure how to trade around this with my existing positions but I will post updates later today after seeing a bit of the action.

Cycles wise, things are murky again. And this tends to happen in the fag ends of cycles. Once again, taking profits early would have proved to be very prudent. Hurst always mentions on trading short - need to be much more cautious than when trading long. Because as I have mentioned many times - Lows tend to be spiky and fast. Highs on the other hand can be a bit more rounded out giving us more opportunities to get out of longs.

Still over the medium term, nothing has changed. The 80 Week low is still scheduled for Nov mid timeframe.

More later today.

Best,
Lee

Rolled Up

Rolled over to higher strike calls(5000) in the morning pop up as I said, after booking profits in 4800 calls (from 80s until 136..so made up for any notional losses in the shorts).

Now we wait for a retest of the lows or lower. Maybe maybe not :) Wait and watch!

Best,
Lee

Bounce..for now

Ok we got the bounce. 4900. 4950 can come. I hedged yesterday with 4800 calls. Today I plan to roll that to either 4900 or 5000 calls. Now why did I hedge yesterday? Because in this intense volatility, it becomes extremely difficult to forecast cycles. Even my software is having problems placing the lower timeframe lows..let alone the higher timeframe ones. So I expect the 10 week low to come in around 6-7 days. But thats not what the Hurst software is expecting. So I have to go with my judgement. So I will go with my expectation that the 10 week low is coming and will coincide with the EW wave 5 down of this full wave 3 structure down. If I am wrong I will give some money back but overall will still be ok.

Today, I will cover the calls I have for a good profit and roll to higher strikes anticipating more bounce.

BUT since this whole month has been weak, expect expiry also to be weak. Longs might need to wait a little while more..maybe for a retest of the lows..maybe a bit lower to set some divergences. Somehow I dont expect a V shaped bounce.

I meant to post some charts but not now..a little later today.

Best,
Lee

4800 Bagged and Tagged - Hurst Updates 8/22

Excellent week I had last week..was completely in sync with the market..got most of the moves I was anticipating.

Looking ahead to coming week, it might not be as easy to trade I feel. Because there are some changes coming up - most important of which is that we are closer to a temp low than before. Pricewise I am bit uncertain but timewise it should come around this Friday to next week Monday timeframe. Maybe a little bit more than that but in that timing vicinity. This will be the 10 week low as per my calculation and from here we will get a sidewise bounce sort of move for few weeks atleast.



Okay so bottom line as before - still bearish over medium term into the November 80 week low. Bearish also into the 10 week low in the next 6-7 trading days. Slightly bullish after that for couple of weeks and then again bearish for the final move. You can visualize this from the chart above. If we saw the last 20 week low in June 3rd week or so at around 5200 and from there we are in the last 20 week cycle before Nov. So this is a bearish cycle and we have already broken several key lows along the way.

Now we are in the last 10 week cycle in this 80 week cycle so its also a bearish one however some small bounce can be expected soon - this may come in the form of a larger scale wave 4. Ilango gives good counts on his blog around this scenario. Assuming we are in a wave 3 now, we should finish the downmove into the 10 week low and from there start the wave 4 I was talking about.

All ideas only. Does not have to pan out. And when trading we need to remember not to get fixated on any single idea but be flexible.

My trading plan for today is to get some hedges thrown in for my shorts because we are at some sort of support levels and also because my earlier hedges I had closed couple of days back. And then wait and watch. Levels wise, 4800 showed some support, breaking of which will lead to more downsides - 4700 might be another area we test soon. Below that, 4500 also comes into play. But one step at a time. Remember this might be the last portion of this section of the downmove so dont get overly bearish and fall into a trap.

If you arent short, then this is not the time to get into fresh ones. If you are short, take portion of profits off and hedge the rest. If you are long, expect some pain..maybe lot of pain before a low takes hold - Just a guess - Might be wrong on this also.

Wanted to post more charts and thoughts but no time..So will try to add some stuff later.

If you missed earlier posts on Hurst, you might want to read up again my earlier posts.

Best,
Lee

4800 is here..what next?

So we are so close to 4800..I am feeling an intense urge to cover my shorts. I am not sure. I see some bounce over here but..I feel its only a waystop to lower lows below 4750 next week. Yeah I think next week will be bad as we go into the 2.5 week Hurst low. Normally I wouldnt give much importance to this but consider all longer term cycles are down, we have to give more importance here. So I am continuing to hold the shorts (2/3 only) from approx 5160 area. Covered 1/3 around 5000 yesterday and holding rest.

I think next week will be bad...After some sort of bounce. Waiting and watching.

Best,
Lee

Wow 4800 is really calling now :)

Even I underestimated the weakness of this market...In the morning yesterday, I was expecting a bounce from 4970-5000 area to a little bit higher - As I had mentioned, a very weak bounce. This is why I covered 1/3 of the shorts I had from 5160...that and money management rules. But market as usual had other plans and continued to breakdown.

I had mentioned in my earlier post about internals. It was a sea of red yesterday in all the broader stocks - I mean mid and small caps. This was the first red flag. The second was the inability to hold the support range. Yeah I wish I were holding all the shorts but I will take what I have. :)

Technically from a Hurst viewpoint, yesterday was bad. Because the market breached the 5 week low implying that the market is breaking down from a cycles viewpoint as well. Now it looks like 4800 is coming quite fast. Like I said before, break of 4950-5000 range will get us to 4800-4750 in a jiffy. And as I mentioned in one of earlier posts, first target is approx 4768 - the 38.2% retrace of the full rally from Oct 2008.

Long live the power of Hurst! :) ..Ofcourse combined with traditional TA and sound money management.

Later.

Best,
Lee

Very Weak

Looking very weak..Still holding the 2/3 shorts..The hedge lost some money but in excellent profits overall with the shorts from 5160 area. Market not being able to stage a bounce from here shows how weak this market is now.

Will see tomorrow.

Best,
Lee

4800 is calling...Updated...

Ok..some more thoughts and charts..

Past few days, Advance decline stats have been absolutely horrendous..This is very important information because it shows the market's internal makeup and structure and that is quickly falling apart. Now when we look at the full market not just Nifty, it shows a lot of weakness and lot of stocks are crashing every day. This shows the internal weakness and without internal strength, the market cannot move up from here..Apart from weak bounces that will quickly fail.

Today a small bounce is possible which can extend into end of this week. And then next week might again be bad. Either way, the maximum time I would give this current pause in the downtrend (thats only what it is - pause in the downtrend) is until the last few days of August or by September 1st/2nd..After which we should see a move below 4950 and below that 4800/4750. Take it for what its worth!

Now a chart.



Now what I would say first is my software is a bit confused here. So am I. Its a little bit uncertain now on the smaller term cycles. But longer is very clear..i.e we are going toward the longer term low in November mid timeframe maybe a LITTLE bit early.

Shorter term, uncertainty rules now. My main confusion is whether to place the 20 week low on the June mid low or whether to place it on the most recent August 8th low at 4950. If I place it this late, it shows an extended 20 week cycle which I am not very happy with. Still it will be clear after some more time.

So the next 20 week cycle has started - only question is when did it start?

So this recent low could be the 20 week cycle low OR the 5 week cycle low. Confused yet? :)

Even though this might seem confusing, the picture is clear in the medium term to longer term..Not a time to be bullish or bottom pick - YET!

Trade Safe.

Best,
Lee

4800 is calling...

...But expect a small bounce of couple of days(?)..Not very sure but we are close to support so its possible for market to try one more time to bounce from here.

Still 5200-5230 is rock solid..Short on rallies is still the mantra.

I covered 1/3 of shorts and hedged the rest. Will wait and watch.

I will update this post in some time with some charts and more thoughts.

Best,
Lee

Intraday - 8/17

Ok I had thought of covering 2/3 of my shorts..but I am not getting enough signals for me to go ahead or my targets...So I am holding 60% shorts as of now..I will look to reshort if we continue to rally higher. I am not very sure about this since my initial feel was to cover shorts and reshort higher but looking at the moves today, I think we have more downside coming and risk-reward is in shorts favour. If you want to reduce risk, please go ahead and reduce shorts and reshort higher...But I would not recommend going long considering the shape of the cycles right now. If in doubt, stay out!

Best,
Lee

Update - 8/16

So far downward pressure has been exerting itself as I thought it would and it should as we go into the 80 week low expected in Nov mid to end timeframe. Expect small bounces in between but the longer term trend will remain down until Nov mid/end.

Today/tomorrow, if we hold above 5000, we might stage a small bounce from there. If however we lose the 4950-5000 range, then like I said before, we will get to 4800/4750 in a jiffy.

I am still short from 5160(mentioned few days back)..added on the bounce yesterday..Today tomorrow I will watch to see if we can hold support..I might close most of the shorts if so.

There was a comment from Nagendra on how low we might go into Nov low and how high/timeframe after that - I want to be clear on this - Hurst defines the timeframes clearly. Targets we get hints on how far it might go..In this case, I have a target of 4500 on Nifty by November mid. I think even 4250-4300 is possible. Can we see below that? Its possible but for me the absolute worst target is 3800/3600 range. Not lower than that.

After the low, then what? Too early to say. But I would suggest you to read my earlier 2-3 posts below..There are lots of important information in there..Some stuff will give you clues on what to expect. Crests will be always translated - Since the next 80 week cycle will be bullish, you can expect a right translation. Read my posts from before to understand more on what I am saying here.

I will post the cycles chart in a few days. Not much change in what I posted before.
We are likely topping the first 5 week cycle in the last 20 week cycle of this bearish 80 week cycle. Its bearish all the way apart from small bounces. Sell the rallies and cover/take profits on the panic dips.

Take a look at CNX IT and S&P CNX 500 normal charts for how bearish it looks..IT index shows a breakout of an Head and Shoulders and even target achieved! Anyone trade this? :)



CNX 500 on the other hand shows a clear breakdown as well over past 2 weeks..Target is more than 20% lower! Check it out...



Best,
Lee