Back Again

Okay guys..after a break of almost 2 years, I am back. I hope I will be able to consistently post here for a while.

What I have been doing for the past couple of years..a bit of soul searching..trying to improve my trading methods. More importantly trying to improve my money management techniques - this is by far the most important thing any retail investor/trader should do - But it is the one thats ignored by everyone..More on that later.

I have found that the best way to do things is to focus on the bigger picture..Keep leverage down to a bare minimum. Have a clear idea on the RR ratio..Most folks dont try to determine the risk but instead focus on the reward alone and in the end get bombed.

Another thing guys - Option trading is NOT investing. I saw someone say on a forum some time back that they had 'invested' in 5700 calls. What the hell!...Thats not investing..its speculation lol.

Anyhow coming to the chart. I have posted something similar some time back. This is the weekly nifty chart with KPL's 20 period swing on it. So its a 20week swing. I have found this is the best way to catch the longer term trend and swings with a fantastic accuracy rate. You can see the buy and sell arrows for yourself. This tool is great for a longer term investor and trader.

As I mentioned before, when 5650 broke, I think our market has entered into a longer term bear. This will be negated only on trading above 6181. Over time the swing will come down and we have to keep monitoring this to determine buy point.

I think we are looking at a possible bad year in 2011 and if we get a good low toward end of this year, then I will start looking for possible longs toward then. It might turn out to be the buys of a decade if it plays out the way I am thinking it will...Speculation at this point but lets see. I will say more about this later.

More comments on the chart. Count the points from arrow to arrow. Only price as I have found that that is the only thing can be trusted. Most folks will focus on thousand different indicators which only muddies up the picture. Focus on price alone.



I have been trading on the long side last year until the swing turned down as shown in the chart.

Bear markets are tough to trade for the retail investor. Its a game best left to professionals. Still I am trying to do something on the short side - atleast trying to capture some of the down swing. Lets watch and see how this plays out. Patience will be of great importance here.

More later.

Amazing!

Well the bulls continue to amaze. Every little pullback is being bought..and yesterday it looked like some big money really came in..I only wonder why they are this late to the game but who am I to judge. Anyhow, on the log scale on the daily, Nifty looks to have broken out and next logical target is 3800 area. But keep in mind, market defies logic...Lets see how far this goes. I tried some shorts yesterday..monster moves stopped me out ofcourse..so nothing doing now...wait and watch...

Been thinking again about this blog for a while..And due to various reasons, personal and otherwise, I am taking a rather longish break from blogging..Not sure how long.
I have lots of personal changes coming up...will be moving to India in while and so on so I wouldnt have much time to continue this blog at the same level that I am doing now...Besides I am finding the whole thing stressful at the moment.

So I am going to step back a bit from blogging..And see how I can manage it..If I feel comfortable, I will be back with weekly or bi-weekly updates...For now, bye, take it easy in trading and always keep a watch out for the unexpected.

Best.

Da Wedge

Looks like we broke down from the wedge pattern and now backtesting it..Shorting with a tight stop has good risk-reward here.



Best.

The Week Ahead

EDIT: Intraday at 12:15PM - Interesting action on intraday charts...Here 15min..Looks like a break. I shorted the break..small size only. I missed shorting the open even though my gut told me to..Nevertheless shorted at the break shown in the chart.



Lets see.

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Another shortened week ahead..I have found that these kind of weeks throw me off a bit..I mean timing wise it can make things a bit 'OFF' but well we got to live with it I guess.

Market this week - I am again expecting we see a pullback. It could be very fast and could also be a sidewise shallow correction. Buying the pullback could be profitable..I think for this time. But dont be in a hurry to buy - In my very humble opinion. Lets look at some levels on the charts.

NIFTY HOURLY



NIFTY DAILY



NIFTY WEEKLY



TWO POSSIBLE COUNTS IN RED AND BLUE



As you know I am totally flat right now..I am not sure what I will do next. In 2 minds..I.E to let the market settle down a bit before going long again..OR try a quick and small short for 2 days? Tough call. We will see as it goes. Will update if I see something interesting or do take a position today.

Best.

OUT

Out of longs...from 3166 to 3374 odd..

Not doing anything now..

200+ pts..I will take that.

I will post some charts and thoughts later if I can.

Best.

Some Mumbo Jumbo

Some more mumbo jumbo from my side..more of an extension to the post below this..

Often I've wondered why we go through good patches and then bad patches..Is it luck or is it all in our head? I think its the latter..Even a gambler has good streaks...but again is it chance? is it luck? Or is it something else?

I have had some stupendous periods of gains and good trades .. I have wondered what made me do that..What created that? And why does it not continue ad infinitum? I believe its all about being in the 'zone' .. Now what is being in the zone..simple..I am sure we all would have played some kind of sport in our life and during some point of time, we would have been playing at the top of our game in a particular game..and NOTHING you do...NO MATTER what you do, it always goes right..Thats the ZONE.

Now traders also have this zone...I have found myself somehow stumbling into this ZONE sometimes..Its mostly by accident but sometimes by design as well..And once we are there, usually something stops the streak and reality snaps back..I think a lot of it depends on having the right amount of confidence and also the right amount of common sense...Most expert traders remain in the ZONE permanently and trading for them is like a second nature..Traders like me..well not quite there even though we'd like to be there...Its a tough game this trading..No matter what you do in life..what all you do successfully, nothing can prepare you for trading successfully except for trading itself.

Its a tough road..Most give up..

But heres to sticking on the road..And getting into that permanent 'ZONE'!

Thoughts on the market later.

Best.

WOW

..I mean just wow...Been a long time since I've seen something like this...Market digested the big gap down and just powered ahead like its a new bull market..My decision to cover and go long in the morning paid off nicely..Position size was not as big as I would have liked but lol, I'll take it...Beer money :)

The markets are getting a bit ridiculous now..I still have a bad feeling this wont end well..but well thats just me..We shall go by what the market does...200pts in one day from low to high!!...well I wont complain as I caught all of this move...Still its amazing how this is going now...Looks like no one wants to miss the bull bus.

As you might have observed(lol, right), I havent been in good form lately and whenever this happens, it pays to step back a little and regroup before trading again...Bad streaks good streaks call it what you will but I believe its all in the mind...I guess I might be finding my groove again..Keeping fingers crossed.

Trading in the Zone is a good book by Mark Douglas on psychology in trading...I recommend this to everyone..More than often the enemy is within us..I want to also sincerely thank SS(Timamo) for encouraging and helping me during this time. Thanks!!! :)

Footnote: I would be very careful in the market now..Its close to euphoria now..You know what comes next..It can run some more but the last 5-10% of the rally is dangerous to catch - use extreme caution folks.

More later.

Best.

Getting Interesting...

Back into the grooove... :)

Getting interesting in here...down to first support..taking a stab at some small longs...Not sure of timeframe yet.



PS: Dont get into this trade unless you have balls of steel! :)

Best.

Pullback and then...

So we are going to get the pullback..And what next? Dont know..lets look at the charts.

HOURLY


DAILY


Looks like after this pullback, we might make one more attempt at the highs..Maybe a bit higher as well before a more serious pullback..As of now, the megabearish scenario is on hold...After a rally with this much momentum, we need to look to buy the dips..For NOW...Not to say this cannot change quickly as well...

For NOW, the hourly is on an uptrend and the 20hr swing is on a buy..until this changes, it pays to buy the dips...Overall(1month-2months), I believe we shall top out and have a downmove but its not possible now to say how far this goes, so lets not try to predict and instead play the hourlies.

I might look to go long today on the pullback..small amounts only..As you might know, Lee needs to get his GROOVE back :)

In other news - Cramer calls the bottom again :D

Visit msnbc.com for Breaking News, World News, and News about the Economy

LAST TIME WHAT HAPPENED -


Best.

Pullback due this week....

Lots of discussion regarding following the trend..I agree that we need to follow the trend..But tell me? - How do you define the trend? Hourly? Daily? Weekly? What I mean to say is where do you decide that the trend changed?

The market over the past several months have been rangebound...A large range but still rangebound...Anyone trying to trend trade on the daily would have been burnt...Maybe it is changing now..Do not know..Since the daily was burning me, I decided to move to the hourly. Since then the market has not given a meaningful pullback..just surging ahead on top of gap ups and new found optimism.

I am open to a new mini bull starting but this action is not healthy in my very humble opinion..Up on gaps..Same can happen in reverse.

We should see some sort of pullback atleast..this week and then maybe power up higher..The 3240-3260 area is of obvious importance as I have pointed out in previous charts. We are this close to taking it out...So lets watch that...If long and market goes above that, setting stop a little under that might be prudent.

For shorts, I am still waiting for the hourly to set up a sell so that I can go in short in bigger size. Unfortunately its not happening...Maybe that is the plan..Power ahead like this till 6300 without any pullbacks? :)

Best.

NUTS

This thing is just too strong...

What a rally...feel disappointed to have missed out..The hourly buy alone would have netted 600 points so far..damn!

The worst part was..no substantial retrace and most of the gains came on gap ups..

Frustrating to say the least...

I really dont have substantial positions in the markets now...Some shorts only as I said before. I will likely get out next week sometime...

And then, will just wait and watch...And will post if I get a signal on the hourly.
Trading that and ignoring everything else seems best.

Lot of news, the G20 etc next few days..Our market is on long holiday..Will be interesting to see what comes out of all of this...

Have a good weekend all - and take your mind off of the markets :)

Best.

Bull Over or Just a Retrace?

@ 11:09AM - HEADS UP: Market is just chopping around..But 20hr swing is now at 2962.75. Below this and we have an hourly sell. I would respect this signal just looking at the earlier track record. Chart below -

Also see the red line I have drawn below. Below this, we can see a strong selloff.



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Bull Over or Just a Retrace?
===========================
Ah the billion dollar question..No I dont have an answer now but just some clues...

I was not able to post yesterday as I was moving house..Been damn busy over the weekend...Hopefully things can get back to normal soon :)

The market..All the baby bulls got their heads handed to them...Had some idea this might happen but did not expect it to be so dramatic. Well now the big question is are we starting a new bear move or it this just a retracement in this so called 'new bull market'? I dont know...

I mentioned a few days back that I had some interesting stuff to share. Chart with comments below. Now note this is just a scenario. I dont trade based off of this..Just looking at the bigger picture.



AGAIN just want to stress..Dont pay too much attention to above..Using EWT for trading can be fatal for those who take it at face value..Just use it as a guide.

Looking at the hourly...My main trading system for now.



All in all a bit of a confusing picture...But we should get more clarity in coming days.

Personally, I do think the bears are back though. If I do get another rally, I will use it to reposition myself better.

Will post intraday updates if something interesting comes up.

Best.

Keeping things small..

Sorry folks for the late update...not much to say...the bull juggernaut continues...Just watching how long it goes..

I am short but in smaller size..and hedged..so not going to worry about all these silly upmoves...Its too late to go long so definitely not doing that..

If we do get some kind of pullback soon, we shall see then.

For now, short and watching...I will take off the hedge if I get an hourly sell..till then maintaining status quo.

Charts later..Bit busy today. I have some interesting thoughts to share but not now.

Best.

What am I doing?

PS: DONT IGNORE this one either...



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12:00 NOON UPDATE: Could this be a flag? If so, breakout above will make market run up quick. Not sure for now..But if it does, its good for an intraday trade.


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Okay guys...You saw I shorted a bit yesterday...I added some more today...And I hedged this with 3000 April calls. I am not sure at this juncture what we are going to do next...I see at minimum a pullback and then a move higher...It is actually too late to go long which is why I am not doing this...

For the bullish case, we need to have some sort of pullback here..else I am sorry to say, we are going into bubble mode and we will have a fast crash-like move...I am not raving bearish anymore..more like neutral..so remember my positions reflect that...

I mentioned earlier that I am looking more at swing signals(thanks to kpl) for trading signals going forward..So that I keep out of trouble going forward.

See the 20hr swing below.



Coming to sentiment...Its turned very bullish now..I would be cautious on longs..If we get a decent pullback I shall look to go long..Ofcourse will reevaluate at that point...Frankly this is a very confusing juncture..tough trading.

EW structures...I have some interesting ideas..One bullish(the obvious one) and the bearish one...Now since the obvious is more often incorrect, I would be cautious. I am thinking STILL along the bearish lines...For those familiar with the EW lingo, I think its a bearish wave4 flat or a wave4 triangle still..with w5 down still to come..However we need to respect momentum here and wait for some confirmation on downside...tough to say right now...But I will post these scenarios with charts later..maybe tomorrow....If anyone else has thoughts on this, please comment.

Intraday setups - I dont have anything at the moment but I shall post if I do see something interesting...note that these setups and patterns dont come often but when they do, we can bank some good coin and low risk.

Best.

Trying a small short...

...not going nuts on this short...very small compared to my normal short...And I have a hard stop at yesterdays highs...above that and I'm out...else I am playing for a pullback to 2860 odd...maybe a bit lower also...but let us see...

I will share some charts in a little while.

Best.

Just a small break

Read all the comments...Just wanted to say some stuff..which I also posted in the comments section of previous post -

Everyone..really...No defeat and all...I will come back with more analysis..And will come back stronger...

Why did I say I am taking a break?

Just regrouping..rethinking..evaluating what went wrong and so on..

When a big loser happens, we need to do that, else emotional trades will happen.

For the record -

My last short trade - From 2600 odd till 2800 I shorted...My AVG price was around 2720...I had several signals to cut and run in between which I ignored...This was my first mistake. Adding a lot to a losing position was the second...

However breakout above 2840 was my last point as I must have mentioned several times in previous posts..Market gapped up above and never looked back...

To be totally clear...From 2720 to 2860 around 140 pts loss...If you take all the earlier gains, this is not so BAD....BUT thats a traders folly and false justification..For me this was the biggest loser trade so far..So I needed to step back and see what went wrong..For me it was more of mindset that anything else...I need to clear that and come back fresh..

I will do so soon.

Best and Thanks to everyone for their comments..I know a lot of bears lost money...You can see how much I lost above...

Dont worry too much..Its all part and parcel of the game.

I WILL BE BACK LATER WITH MY CHARTS AND MORE ON OUTLOOK.

I am trying some new stuff..i.e using the 20period swing system on different timescales to see which one is better. I might post some trial entries later today with this..The only thing confusing me for now is which timeframe to use...1hour or 30 min swing...Trying to evaluate which is better.

Regd outlook - This rally has gone too far..We should get some kind of pullback and consolidation after which we will make an attempt to take out the highs...So it looks like we have to put bearishness on the back burner and try to trade on the longer side and buy dips...

But this will come later...I dont think the pullback is done yet..I will use the swing indicators to show where to go long or where to go short.

More later.

Best.

Intraday Thoughts

EDIT: Just wanted to make things clear..I am totally flat now..Not trading for a little while..Generally after some losers, its better to regroup and come back..So thats what I will do..Frankly I am surprised all the bullishness..But generally market defies logic...So maybe a new bull is starting..Who knows...More thoughts later...trade safe out there...And dont trust anything..bye.

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EDIT: Dont know..Dont know..I am capitulating fully and going flat..Will decide on future positions later...Now just going to chill a bit...Better to let things sink in and not trade emotionally...Things look very bullish for now...Atleast for today.

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Okay guys...The US market futures has done bears in...I am capitulating a bit over here...Covering all option position shorts in loss...Also rolling the future shorts to April...Also hedging ALL of them with 2900 calls. Dont know how this turns out...But I cannot see any reason to be bullish now..Maybe I am wrong and will be bankrupt soon...Feel FREE to fade me.. :)

Below is what I wrote few hours back...I still feel the same...But US futs gapping up has obviously thrown a spanner in all bears works...Let us see how this works out..
Tough trading..

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Past several hours, I've been reviewing market data and charts..I've also been reading several blogs and forums...And overall, what I read is scaring me and making me question my earlier views in past few posts where I was toning down on my bearishness...

I see that everywhere, the bulls have started hoping against hope again...And on
what basis? That things cannot be TOO bad...HOW did they reach such a conclusion?
Price has done absolutely NOTHING on a medium term basis...So WHY bullish? I am pretty surprised...At best I expected some neutral sentiment..Price has not moved anywhere over past 3-4 months..So because of this one would expect more neutral sentiment...The bulls are back though...Last week pushed sentiment to the more bullish side...Maybe they will be right and we will push higher up...I continue to be skeptical But lets play point to point...

Best.

Weekend Thoughts

A more objective look at things that transpired last week and also a look at possibilities for next week -

As I alluded to in the previous post, the last week in US was QUAD EXPO week - Basically everything expired..We had a lot of games played by the market makers...A lot of manipulation...Yeah I know lot of you dont believe it...But the markets are manipulated! So big rally in US = Big rally for our markets...Nothing else...Did something good come from our side of things? Nope...Okay instead of looking for reasons, lets see what can happen next -

CHARTS - See those posted in the posts below this and the next.

So what I see is - as I think I explained last week, a move to 2700 area is almost surely on the cards...After that, it gets fuzzy...We could make one more move back up to 2820 area at which we have to see what happens...OR we break 2700, 2660 and continue lower. At this point since there has been a lot of base building at 2500, we might not break it any time soon...Maybe never...

So taking it one step at a time...Maybe the bulls are right and we pullback a little and mount a huge rally..But I dont see it yet...I will see how we react after our pullback and expiry before making these decisions..

I am an intermediate term trader...Still I do try to identify very short term opportunities which I do post here..You'll remember the wedge, the flag pattern etc..All of these made for excellent intraday trades....I do trade them also when I see some good stuff like that...Doesnt come all the time but when they do, its worth trading them...

Which brings me to my next point...There has been some debate on anticipation vs. reactionary trading...And Sajal raised some good points to counter..

Really you think about the wedge I posted earlier or the flag breakdown..Both of them worked perfectly...It was anticipation...correct? The point is, when will you react to them? 20 points lower? :)

Okay another example, in the charts in below post, we have 2820 area as strong resistance to overcome right NOW because of the falling DT line...NOW, IF I short here with stops above...Tell me - Reaction or Anticipation? :) Hope you are getting my point...And this is not TA? Think about it.

There are different methods to make money in markets...Do your own thang..But dont be so quick to dismiss others...

Most traders lose money some time or other..The main problem I have is that whenever I do this, I do so in front of a large audience in real time :)

Think about this also a bit...

Best.

Do ya feel LUCKY PUNK?

WELL DO YA?




:D

Bulls get off this train with what you got so far...Thats ALL I have to say...Sure you might get some more upside...But dont fall in LOVE with the UPSIDE..

What you got already is way more that what you should have....

AND Thats all I have to say...

I read all the comments in the chatbox...I am happy with what I read here and elsewhere...People are ready for a new bullmarket..Already...That itself tells me you all are wrong...way wrong...

And when I look at my charts, its like the icing on the CAKE.. :)

For those that did not know this last week wast QUAD Witching week in US where pretty much all derivatives expire this week..Its a very rare occurance and so lots of manipulation comes up...DO you guys think Indian markets went up on their own accord? If so, GOD bless you guys...

Cheers to All...And have a GOOD weekend.

I will most my more sane thoughts later when I am NOT this inebriated... LOL :)

Ok you guys, understand this post is more of weekend fun that anything else..I dont mean offense to anyone...Its just not my style...Just thought its a funny post to do....I will do a very sane post tomorrow...with all my thoughts..I have to give this past week to the bulls...But I think next week belongs to da bears..

GO BEARS!! :D

Best.

What's the Beef?

Okay guys..Whats going on...I have been really really busy the past several days...Still I am trying to come here and make some kind of update...I obviously missed to do this yesterday...Tried to say something in chatbox..And invited the IRE of some 'guy' there...

Also some folks on comments also are saying some stuff..See guy and those on comments, I dont disagree with you...I use TA too...What I use might be different from what you use...The only thing I see wrong in what I did - I missed the last 100-150 points on the upside...Now you leeches hold me to that..yeah..I know..You guys will do that...See there are different methods of TA and trading...Respect other methods too...I might be using a contrarian approach..But I do that coz thats what I am comfy with...

So okay...Have your laughs..I am wrong for now..And I am feeling the pain..BUT...

Overall I see very little reason for the market to continue up from here..If it does, I will abandon my bearishness...

Well what can I say..When I go right, lots of folks come out and praise...Some bugs wait for things to go wrong, then they come out...they however disappear when things go right again...I have been seeing this for the past several months...

You guys think I dont use money management or some kind of risk management? That was the aim of my post yesterday..Unfortunately it seems to have been too much to comprehend for most folks...Nothing I can do here...

Coming to the markets...I been wrong..No doubt...But looking at stuff today, I dont see any reason for bullishness to continue..In fact I see a good amount of downside..Very closeby...

2 scenarios I am looking at -

1. Bear Scenario - We decline fast from here, break 2770 first, 2700 second, 2660-2600 third and then touch 2500 strong support. Breaking 2500, while not impossible, seems unlikely for now...But if we do, we shall test 2200-2000 range very quick.

2. Bull Scenario - This one also portends a drop from here...We need to see where we can take supports...Will it be 2700 or 2660 I dont know...One of those areas, should support..And then we should mount another much stronger rally...

Seriously I do not know which one of above will play out...Its a toss up right now...Play level by level..Thats all we can do...There is some very bullish signals coming out...But the best thing for the bulls would have been to go down and set some really good divergences..But you know bulls..CHARGE..Yeah..This is going to be some tough trading...

I am however becoming more medium term and long term bullish..This I will give to the bulls...

Short term however...No cigar!

What I did over past few days..Reduced shorts considerably at around 2750 as I said in earlier posts...I added back some yesterday...Overall not so great of trades but lets see this to completion. See the charts below for what I am looking at.

Charts -





And as Tom Hanks said in Forrest Gump,

Thats ALL I have to SAY about THAT... :)

Best.