I strongly believe what we are witnessing right now is action into the 80 week low. The problem is that this is a longer cycle low hence for it to expand by a couple of weeks or 3 weeks even can be considered normal.
Expect more ups and downs - We should hold 4500-4450 area for this low. I would like it if we can hold the 4600 area but if that breaks, then we should see 4500-4450 area which I think will hold. Oh and I should also mention that 4700 first needs to break before entertaining any bigger bearish targets. Go from point to point and dont get greedy since we are so late in this cycle. Maybe we touch 4720, go up to 4900 and then do the final down to 4600 or slightly below - dont know just speculation for now. But it might happen quite quickly.
I know that there is a lot more possibility of big downs from here - but that is what we should expect in this cycle. But being short is also not easy due to the large swings going on. I am trying to trade here but its going back and forth too quickly - hence not easy. So I am trying to mostly scalp nowadays while we wait for the 80 week low. There are some ways of confirming that the 80 week low is in - I will explain this another day but I am keeping an eye on it.
BTW, I have replied to comments in earlier post.
Best,
Lee
Tuesday, November 22, 2011
Sunday, November 20, 2011
A Review and the Week Ahead - 11/21
I thought I would start today's post with a review of the past few months, what my thoughts were, what actually happened and then what I think is going on now and what might happen in the future. I think this will be good for me also as I will be kind of thinking out aloud here.
Last couple of months or so have not been easy to navigate..But still there were lot of nice intraday opportunities and nice scalp trades out there.
Going back a bit, I think before Oct, I was expecting the 80 week low to come in sometime in November. But what actually happened was for Oct4th to show some kind of major low and put in a spectacular move out of it. The amplitude of the move out of this low was not expected for a 5 week low because a 5 week low was what I was expecting in Oct first week. The enormous rally out of that low had Sentient also confused and it started to label that low as the 80 week low which means it came very early for such a major low. You may remember the flip flopping and confusion at that time. I was very skeptical but eventually 'turned' and started to count Oct4th as indeed a major low. Once we took out 5200, I became confident that we were going to have a good rally for next few months. But market stalled at 5400 and broke down badly from there. Once we took out 5200 to the downside, I sold all cash positions and started to lean in bearish. And now..surprise surprise..Sentient also has changed its count and is thinking now that the 80week low is dead ahead of us. Infact we are very much in the time range for that low. Below is a screenshot of ST's latest view.
As you can see ST is expecting a major low right ahead. Is it already in last week? Could be..but we do not have any confirmation yet. And looking at how the momentum was last week, I think we might have some more work on the downside but it should be over very soon..Maybe next few days will do it. But price can quickly breakdown in matter of few days. Last week showed us that.
So bottom line..
We saw the last 80 week low around May 25th
The last 40 week low around Feb 11th
The last 20 week low on June 20th
The last 10 week low most likely on August 26th
The last 5 week low most likely on October 4th
So now projecting forward, we are around 40weeks from the last 40 week low and around 17.8 months from the last 80 week low. So we are well within the window of the 18month(80 week) low.
So maybe we can go up retest the 5000-5050 area again before revisiting the lows..maybe 4750 again to set low? Or maybe a bit lower to 4650-4600 area? One thing however need to be very careful here because we are in the window of the 80 week low. And rallies out of these major lows can be pretty spectacular and also very unkind to shorts.
Looking at the higher cycles. If you remember my older posts, I was thinking that along with the 80 week nest of lows, we would get the 4.5yr and 9yr lows as well. But after seeing price action over past 2 months or so, I am rethinking on this. I dont think this is a valid scenario anymore. i.e the higher timeframe longer term lows are not yet in...But we still can see a rally for couple of months in another 18 month bear cycle before it tops and goes for the next leg down. Yes too much to think right now but just wanted to put this out there because its a deviation from my original views. So what I meant to say is even though the 80week low can be bought for a positional trade, we will most likely see lower lows sometime next year. But then let us trade cycle to cycle..The smaller timeframe cycles.
I expect the bounceback to continue and then maybe we can go for one more shot down to set the 80 week low. All this can happen very quickly since we are in the 80 week low window. I will post updates if I see something different from this scenario in this immediate timeframe.
Best,
Lee
Last couple of months or so have not been easy to navigate..But still there were lot of nice intraday opportunities and nice scalp trades out there.
Going back a bit, I think before Oct, I was expecting the 80 week low to come in sometime in November. But what actually happened was for Oct4th to show some kind of major low and put in a spectacular move out of it. The amplitude of the move out of this low was not expected for a 5 week low because a 5 week low was what I was expecting in Oct first week. The enormous rally out of that low had Sentient also confused and it started to label that low as the 80 week low which means it came very early for such a major low. You may remember the flip flopping and confusion at that time. I was very skeptical but eventually 'turned' and started to count Oct4th as indeed a major low. Once we took out 5200, I became confident that we were going to have a good rally for next few months. But market stalled at 5400 and broke down badly from there. Once we took out 5200 to the downside, I sold all cash positions and started to lean in bearish. And now..surprise surprise..Sentient also has changed its count and is thinking now that the 80week low is dead ahead of us. Infact we are very much in the time range for that low. Below is a screenshot of ST's latest view.
As you can see ST is expecting a major low right ahead. Is it already in last week? Could be..but we do not have any confirmation yet. And looking at how the momentum was last week, I think we might have some more work on the downside but it should be over very soon..Maybe next few days will do it. But price can quickly breakdown in matter of few days. Last week showed us that.
So bottom line..
We saw the last 80 week low around May 25th
The last 40 week low around Feb 11th
The last 20 week low on June 20th
The last 10 week low most likely on August 26th
The last 5 week low most likely on October 4th
So now projecting forward, we are around 40weeks from the last 40 week low and around 17.8 months from the last 80 week low. So we are well within the window of the 18month(80 week) low.
So maybe we can go up retest the 5000-5050 area again before revisiting the lows..maybe 4750 again to set low? Or maybe a bit lower to 4650-4600 area? One thing however need to be very careful here because we are in the window of the 80 week low. And rallies out of these major lows can be pretty spectacular and also very unkind to shorts.
Looking at the higher cycles. If you remember my older posts, I was thinking that along with the 80 week nest of lows, we would get the 4.5yr and 9yr lows as well. But after seeing price action over past 2 months or so, I am rethinking on this. I dont think this is a valid scenario anymore. i.e the higher timeframe longer term lows are not yet in...But we still can see a rally for couple of months in another 18 month bear cycle before it tops and goes for the next leg down. Yes too much to think right now but just wanted to put this out there because its a deviation from my original views. So what I meant to say is even though the 80week low can be bought for a positional trade, we will most likely see lower lows sometime next year. But then let us trade cycle to cycle..The smaller timeframe cycles.
I expect the bounceback to continue and then maybe we can go for one more shot down to set the 80 week low. All this can happen very quickly since we are in the 80 week low window. I will post updates if I see something different from this scenario in this immediate timeframe.
Best,
Lee
Wednesday, November 16, 2011
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
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
Monday, November 14, 2011
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
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
Sunday, November 13, 2011
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
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
Thursday, November 10, 2011
Friday
So big global turbulence going on while our markets are closed. Dont know why this always seems to happen when we are closed :) I have wondered about this before also on the blog..Its weird. Anyhow, it is what it is.
I still stand with my earlier views. I.E the 80 week low did come on Oct 4th at 4700 and we are unlikely to break that for next 4-5 months(till the 40 week cycle top). Next the 5 week low - I did mention it came likely came in last week. But not very sure now - it could be right ahead of us maybe today. Then the 10 week low likely around end of November. Maybe we will just chop around a bit more.
Looks like today market will gap down below 5200 so 5150 becomes important and below that 5100. But unlikely to get so far - Atleast I think so. But we are at potential supports here and so we might get a good size bounce here and then we can re-evaluate. There is pretty good put support at 5100 and 5000 so I do not expect these to break this month. I can be wrong but just seems extremely unlikely unless something really really bad happens on a global scale.
I mentioned in last time update I will be using these scary declines to buy back into stocks..All with the expectation that the 80 week low is behind us and the next 10 week low end of November will provide a base for a good end of year rally into Jan/Feb timeframe. Will phase out my buying until Nov end. Need to wait and watch.
Hope I answered all your queries here Aly.
Have a good trading day All.
Best,
Lee
I still stand with my earlier views. I.E the 80 week low did come on Oct 4th at 4700 and we are unlikely to break that for next 4-5 months(till the 40 week cycle top). Next the 5 week low - I did mention it came likely came in last week. But not very sure now - it could be right ahead of us maybe today. Then the 10 week low likely around end of November. Maybe we will just chop around a bit more.
Looks like today market will gap down below 5200 so 5150 becomes important and below that 5100. But unlikely to get so far - Atleast I think so. But we are at potential supports here and so we might get a good size bounce here and then we can re-evaluate. There is pretty good put support at 5100 and 5000 so I do not expect these to break this month. I can be wrong but just seems extremely unlikely unless something really really bad happens on a global scale.
I mentioned in last time update I will be using these scary declines to buy back into stocks..All with the expectation that the 80 week low is behind us and the next 10 week low end of November will provide a base for a good end of year rally into Jan/Feb timeframe. Will phase out my buying until Nov end. Need to wait and watch.
Hope I answered all your queries here Aly.
Have a good trading day All.
Best,
Lee
Tuesday, November 8, 2011
80 week low confirmed
Yeah I know quite late. But better late than never right?..Anyhow I have the 80 week low confirmed on Oct 4th at 4740 odd. And the next 5 week low came up much higher at approx 5200. This 5 week low came up approximately where we expected our 80 week low. So overall since this low came up very early, its bullish in cyclic terms.
Latest ST outlook -
As you can see in the chart, the 80 week nest of lows is confirmed. And so we are cleared for atleast a few months worth of rise. If I have to guess, I would say cleared for upside until Feb end. This is when we can expect the next 40 week cycle to top. But lets take one step at a time.
What am I doing? - After selling most of my longs at approx 5300-5350 range, I accumulated a good portion back as per my earlier post in the 5200-5280 range. So still net long but have more ammunition to add longs if we do get some one or two day scary declines. It will be a good opportunity if we get that.
Next we have the 10 week low around end of Nov. So this can be another good opportunity to add to longs. So buy the dips will be my mantra going forward.
Target wise - I have a very rough target of 5700 based on Hurst methodology. But I havent fine tuned this yet. Sustaining above 5700 can open up 5900 and even a challenge of our all time highs.I will do a detailed post on this tomorrow. This is based on FLD(future line of demarcation) crosses which generates targets per Hurst Methodology..I havent spoken about this yet but will do so tomorrow.
Best,
Lee
Latest ST outlook -
As you can see in the chart, the 80 week nest of lows is confirmed. And so we are cleared for atleast a few months worth of rise. If I have to guess, I would say cleared for upside until Feb end. This is when we can expect the next 40 week cycle to top. But lets take one step at a time.
What am I doing? - After selling most of my longs at approx 5300-5350 range, I accumulated a good portion back as per my earlier post in the 5200-5280 range. So still net long but have more ammunition to add longs if we do get some one or two day scary declines. It will be a good opportunity if we get that.
Next we have the 10 week low around end of Nov. So this can be another good opportunity to add to longs. So buy the dips will be my mantra going forward.
Target wise - I have a very rough target of 5700 based on Hurst methodology. But I havent fine tuned this yet. Sustaining above 5700 can open up 5900 and even a challenge of our all time highs.I will do a detailed post on this tomorrow. This is based on FLD(future line of demarcation) crosses which generates targets per Hurst Methodology..I havent spoken about this yet but will do so tomorrow.
Best,
Lee
Thursday, November 3, 2011
Thrown off the bus?
Looks like a big gap up today. Again I am in a quandary here. Did we get the last 5 week low at 5200? A little early but still in the window. So did the market just throw us weak hands off the bus, consolidate ABOVE 5200 and is getting ready to take off? Funny how that works. And I did mention that possibility a little while back. Nuts!
See the ST screenshot below.
Sentient Trader Software
See those question marks? Its actually ST's way of saying possible low might have been seen and as some more days and price conditions are met, it confirms the low.
I do not know exactly what to do right now. I covered some shorts yesterday when we tested 5200 area. The rest is hedged with 5300 calls. So today likely will just take the pain and wait for more clarity. I might also start buying back into the cash positions I sold few days back. Yeah I know dumb move on my part but this is how cycle lows work..throw most people out of the bus and then reverse.
The other big thing here is the downslopping trendline which comes at approximately 5450-5500 area. Unless market clears that area, we cannot confirm anything at all.
I might not post for few days until more clarity emerges.
One more thing..I mentioned I would address the longer term buy question. I am not very sure but I think if this 80 week low is in which it most likely is, then we should be cleared for upward prices atleast until next Feb-March timeframe. This will be when the next 40 week cycle tops approximately. We will fine tune as we go along. But markets might be bullish into that timeframe..maybe even very bullish once we clear 5500. Then again I am expecting a bear move into the 40 week lows toward end of June timeframe. All very fluid right now and we need to see as we go along. Cannot assume anything right here. I remember someone mentioning Vivek Patil's views which seems to gel with what I am saying above. So I also concur with it..Can anyone post a direct link to his latest views?
As always, comments are welcome. Have a good long weekend all!
EDIT: I just wanted to add one more thing. The most likely scenario here is that we test 5400-5450 range here and then go down again to test the 5200 support again before taking off to the upside. Else we could just take out 5450 and take off. Wait and watch.
Best,
Lee
See the ST screenshot below.
Sentient Trader Software
See those question marks? Its actually ST's way of saying possible low might have been seen and as some more days and price conditions are met, it confirms the low.
I do not know exactly what to do right now. I covered some shorts yesterday when we tested 5200 area. The rest is hedged with 5300 calls. So today likely will just take the pain and wait for more clarity. I might also start buying back into the cash positions I sold few days back. Yeah I know dumb move on my part but this is how cycle lows work..throw most people out of the bus and then reverse.
The other big thing here is the downslopping trendline which comes at approximately 5450-5500 area. Unless market clears that area, we cannot confirm anything at all.
I might not post for few days until more clarity emerges.
One more thing..I mentioned I would address the longer term buy question. I am not very sure but I think if this 80 week low is in which it most likely is, then we should be cleared for upward prices atleast until next Feb-March timeframe. This will be when the next 40 week cycle tops approximately. We will fine tune as we go along. But markets might be bullish into that timeframe..maybe even very bullish once we clear 5500. Then again I am expecting a bear move into the 40 week lows toward end of June timeframe. All very fluid right now and we need to see as we go along. Cannot assume anything right here. I remember someone mentioning Vivek Patil's views which seems to gel with what I am saying above. So I also concur with it..Can anyone post a direct link to his latest views?
As always, comments are welcome. Have a good long weekend all!
EDIT: I just wanted to add one more thing. The most likely scenario here is that we test 5400-5450 range here and then go down again to test the 5200 support again before taking off to the upside. Else we could just take out 5450 and take off. Wait and watch.
Best,
Lee
Wednesday, November 2, 2011
Que Sera Sera
So..looks interesting right here what the cycles are doing...If I were not trading or directly involved in the market, I think I might have taken this as a serious academic exercise. Thats how interesting these cycles are playing out right now.
In college, I used to hear, cycles, fourier transforms, spectral analysis etc..But now I see the practical analysis of it. Funny right? Now we see the practical aspect of it!
Ok so now coming to the market, I sold cash positions yesterday. I dont know maybe market will brand me as a fool very soon because I did this. I know most of you will lol..but I have to go with what the market told me to do..So sold cash positions, established shorts at the 5300 area with hedges at 5300 calls. So I will just watch today most likely. We are declining now into the the 80 week low but the problem here is that the US 80 week low is projected toward Nov end while our 80 week low should come in sometime next week. This is the reason why we are more bullish that the US or other western markets.
This is the reason why I mentioned better to sit out and then buy in size when we have more confirmation on the low. I know in earlier post comments, there were questions on longer term buys etc..And what will happen next year..I have some ideas on this..so I will do a post on this a little later. It looks like we are NOT THERE YET.
Best,
Lee
In college, I used to hear, cycles, fourier transforms, spectral analysis etc..But now I see the practical analysis of it. Funny right? Now we see the practical aspect of it!
Ok so now coming to the market, I sold cash positions yesterday. I dont know maybe market will brand me as a fool very soon because I did this. I know most of you will lol..but I have to go with what the market told me to do..So sold cash positions, established shorts at the 5300 area with hedges at 5300 calls. So I will just watch today most likely. We are declining now into the the 80 week low but the problem here is that the US 80 week low is projected toward Nov end while our 80 week low should come in sometime next week. This is the reason why we are more bullish that the US or other western markets.
This is the reason why I mentioned better to sit out and then buy in size when we have more confirmation on the low. I know in earlier post comments, there were questions on longer term buys etc..And what will happen next year..I have some ideas on this..so I will do a post on this a little later. It looks like we are NOT THERE YET.
Best,
Lee
Tuesday, November 1, 2011
Tough Call
Once again I feel we are at some sort of crossroads here in the market. Today we have to hold 5200-5160 area. Else the trapdoor to lower lows might open up again. My idea of shorting in the 5350-5400 area was correct but I also covered too early I guess when I did yesterday. There are some quite bearish possibilities opening up here atleast for the next 1 month. I think we need to be very careful here over the next 2-3 weeks. Remember I was looking for the next low in the next week but it can extend a bit being a major low. So its time to be careful I think.
So I am wondering what to do today. I do have some long cash positions as I have been mentioning for a while. But today I am again wondering whether it makes sense to close most of them and again rebuy again in a couple of weeks. Its a tough call. I would say if you dont have any positions, better to just sit out the next 2-3 weeks and then buy in size. Break of 5160 opens up 5050. And break of that opens up 4800 and maybe even new lows. But we might bounce about a little today and tomorrow before the market makes a decision on what to do next. Lets go point to point without any preset notions. On upside market needs to break above 5450-5500 to go higher. Maybe much higher.
I am sorry I am not able to make much of a directional call here but market has once again thrown us a curve ball and so need to do our best to navigate it.
Bottom line is I will be taking a very defensive position here for the next few days until more clarity emerges. And we should get this over the next few days.
Comments are welcome. Remember always - I am also just like you guys trying to navigate the market.
Best,
Lee
So I am wondering what to do today. I do have some long cash positions as I have been mentioning for a while. But today I am again wondering whether it makes sense to close most of them and again rebuy again in a couple of weeks. Its a tough call. I would say if you dont have any positions, better to just sit out the next 2-3 weeks and then buy in size. Break of 5160 opens up 5050. And break of that opens up 4800 and maybe even new lows. But we might bounce about a little today and tomorrow before the market makes a decision on what to do next. Lets go point to point without any preset notions. On upside market needs to break above 5450-5500 to go higher. Maybe much higher.
I am sorry I am not able to make much of a directional call here but market has once again thrown us a curve ball and so need to do our best to navigate it.
Bottom line is I will be taking a very defensive position here for the next few days until more clarity emerges. And we should get this over the next few days.
Comments are welcome. Remember always - I am also just like you guys trying to navigate the market.
Best,
Lee
Monday, October 31, 2011
Bottom Line
Likely the 80 week low has already been seen price wise. This was on Oct 4th. So the next 5 week low is expected to come in around this week Friday or next week Monday/Tuesday. So shorts should not be taken beyond that and buys are going to be more profitable...Buying the dips that is. Shorts taken yesterday can be covered today and retaken at higher levels or managed with some sort of trailing stoploss. But I still think the big money is to be made on the long side buying the dips into the next 5 week low.
Charts posted yesterday are still valid.
Best,
Lee
Charts posted yesterday are still valid.
Best,
Lee
Sunday, October 30, 2011
Week Ahead - 31/10/2011
Updates for the week ahead. I have included most of my comments in the charts itself but increased the font size so should not be a problem to read now - right click and open in a new window to see the charts. Let me know still if anyone has a problem reading and I will move all my comments to the text section only.
Bottom line is the nominal lows of this 80 week cycle might have already be seen and we are in an uptrend. However we are close to resistance at 5450-5500 so expect a pullback and consolidation for next few days/week. Infact if you remember, this was one of my preferred scenarios - break out above 5200 and then retest it from above. But several possibilities are there.
See the charts and study them. I have tried to analyse various timeframes and possibilities here. I have included a GOLD chart also. Also the final picture is the portfolio update. I think I will move this to be a bi-monthly update from now on - being a cash portfolio will take time to grow. Posting weekly does not make much sense.
Nifty Normal View - Daily
Nifty Weekly View - Weekly
Nifty Hurst View
Nifty Hurst View - Expert Model
Gold Hurst View
Cash Portfolio Update
Link to Sentient Trader Software
Comments are welcome.
EDITS: 10:07AM - In case you guys are wondering whats going on, there is a major currency intervention going on in the Japanese markets. This is what is causing the turbulence in the markets..Yeah its a reason..but we are going for the cycle lows soon looks like..A higher low as I have been saying..So I have been slowly building into shorts here in futures. Cash positions remain as is. The last time they intervened in Forex was Aug 4th. You all know what happened Aug 4th, 5th and after that also. Play cautiously
Best,
Lee
Bottom line is the nominal lows of this 80 week cycle might have already be seen and we are in an uptrend. However we are close to resistance at 5450-5500 so expect a pullback and consolidation for next few days/week. Infact if you remember, this was one of my preferred scenarios - break out above 5200 and then retest it from above. But several possibilities are there.
See the charts and study them. I have tried to analyse various timeframes and possibilities here. I have included a GOLD chart also. Also the final picture is the portfolio update. I think I will move this to be a bi-monthly update from now on - being a cash portfolio will take time to grow. Posting weekly does not make much sense.
Nifty Normal View - Daily
Nifty Weekly View - Weekly
Nifty Hurst View
Nifty Hurst View - Expert Model
Gold Hurst View
Cash Portfolio Update
Link to Sentient Trader Software
Comments are welcome.
EDITS: 10:07AM - In case you guys are wondering whats going on, there is a major currency intervention going on in the Japanese markets. This is what is causing the turbulence in the markets..Yeah its a reason..but we are going for the cycle lows soon looks like..A higher low as I have been saying..So I have been slowly building into shorts here in futures. Cash positions remain as is. The last time they intervened in Forex was Aug 4th. You all know what happened Aug 4th, 5th and after that also. Play cautiously
Best,
Lee
Thursday, October 27, 2011
Update for 28th of October
Will Update a little bit late..probably 15-20 mins late.
EDIT: WILL UPDATE TOMORROW. NOT MUCH OF UPDATE TODAY. UPSIDE CONTINUES.
Thanks,
Lee
EDIT: WILL UPDATE TOMORROW. NOT MUCH OF UPDATE TODAY. UPSIDE CONTINUES.
Thanks,
Lee
Wednesday, October 26, 2011
Wishing everybody a very Happy and Prosperous Diwali
First of all wish everybody a very Happy and Prosperous Diwali!
So looks like this confused bull is maybe slightly vindicated right now with the markets above 5200. So the next thing to see is can we get into the lower 5300 range and then consolidate above 5200 - this is what I will be watching out for. Let us see.
I got up today early morning for this special session. I have few NF longs from the 5050 area which I will be covering today. Its a pretty good profit to take today. Still holding the cash portfolio - To tell the truth its not performing as well as I would have liked but then need to give it more time in the larger scale cycles..We shall wait and see. I am churning it around..cutting down the losers and adding to winners..will be doing this for some more time. Market needs to gain more momentum and confidence. It might only happen after the next 5 week low(and higher scale possibly) expected in the 1st week of Nov. I will post a more detailed view with charts tomorrow.
Happy Trading!
Edit: 5pm: Covered NF after some time after the open and now bought back some. Frankly speaking, not seeing much bearishness. Maybe because its today :) still the Nov 1st week cycle low is looming in there..need to be watchful.I would really love to see some consolidation around here building a base and then moving higher. Anyhow, we will see in coming days how it all works out.
5:10pm - Out again..Thats it for today.
5:20pm - One more add..Buying few 5200 puts now. Not sure if this is a wise move with a lot of big news coming tomorrow but this is in part to protect my cash positions and also because of the upcoming cycle low in Nov 1st week. We shall see.
Best,
Lee
So looks like this confused bull is maybe slightly vindicated right now with the markets above 5200. So the next thing to see is can we get into the lower 5300 range and then consolidate above 5200 - this is what I will be watching out for. Let us see.
I got up today early morning for this special session. I have few NF longs from the 5050 area which I will be covering today. Its a pretty good profit to take today. Still holding the cash portfolio - To tell the truth its not performing as well as I would have liked but then need to give it more time in the larger scale cycles..We shall wait and see. I am churning it around..cutting down the losers and adding to winners..will be doing this for some more time. Market needs to gain more momentum and confidence. It might only happen after the next 5 week low(and higher scale possibly) expected in the 1st week of Nov. I will post a more detailed view with charts tomorrow.
Happy Trading!
Edit: 5pm: Covered NF after some time after the open and now bought back some. Frankly speaking, not seeing much bearishness. Maybe because its today :) still the Nov 1st week cycle low is looming in there..need to be watchful.I would really love to see some consolidation around here building a base and then moving higher. Anyhow, we will see in coming days how it all works out.
5:10pm - Out again..Thats it for today.
5:20pm - One more add..Buying few 5200 puts now. Not sure if this is a wise move with a lot of big news coming tomorrow but this is in part to protect my cash positions and also because of the upcoming cycle low in Nov 1st week. We shall see.
Best,
Lee
Monday, October 24, 2011
5160-5200
This obviously remains the BIG barrier right now for market upsides. This needs to be cleared before we can say all clear for higher prices. I earlier thought market might clear it an then retest it from above. But does not look like it at this point. So we might consolidate and move lower here for a few days to set the 5 week low before we can rally higher.
Of course today is a big news day so anything can happen. And together with that expiry. So could be quite a day. I still have some future longs from 5050 area. I think I will close them today to be on safer side and wait and watch. Cash side I have already spoken about before. I will be doing some rebalancing today - removing some underperformers and freeing up some funds for later.
Charts are still relevant from yesterday. And I will post some more thoughts later on the market cycles. Dont miss the comments section from last post.
Best,
Lee
Of course today is a big news day so anything can happen. And together with that expiry. So could be quite a day. I still have some future longs from 5050 area. I think I will close them today to be on safer side and wait and watch. Cash side I have already spoken about before. I will be doing some rebalancing today - removing some underperformers and freeing up some funds for later.
Charts are still relevant from yesterday. And I will post some more thoughts later on the market cycles. Dont miss the comments section from last post.
Best,
Lee
Sunday, October 23, 2011
Week Ahead - 24/10/2011
PS: I changed my profile picture to a 'confused bull' LOL :D
Maybe now the market can go down in earnest!
EDIT: 10:05AM: Looks like my comments have been taken in wrong sense. It was part in joke. See my confused bull comments and picture were just to put forward a humorous view on my mentality right now. I am bullish dont get me wrong. But I am still cautious till Nov 1st week end. After that I think we wont see a lower low so buying is the way to go. So Today I had lot of NF longs from Friday.I covered some today...and still holding the rest FWIW for higher prices..But if I think it wont go higher from here, I will be quick to cover..will post updates.
Best,
Lee
Wednesday, October 19, 2011
Oct 20th
So looking at the market action, I think maybe the 2.5 week low came in on Tuesday Oct 18th..Early..but still valid..And now we are in the bounce from there. And likely this will also top soon or has topped yesterday. From here we should have atleast a few down days into Oct end/Nov 4th. Lets see how it plays out.
Another thing I just wanted to show. See this below chart. This is a slightly modified model(expert model in the software) I am using. This one actually says the 80week low is already in. I dont like the 'look' of this due to various reasons..So not favoring it at the moment. But it is however a very good possibility considering the strength over past several days.
Lets see how far the next low comes - depending on that we can confirm. Remember shorter term this doesnt make any difference - 2.5, 5 week cycles are all operating fine.
I have been building into stocks whenever we have been having big bad down days..Its been going good so far. Around 30% into cash stocks right now. Rest I will be building in whenever we get big down days.
I am including a snapshot of what I hold right now..Entry price and current price along with current profit percentage. For obvious reasons I am not including quantity/size here. But I am 30% invested now - will add more on declines. The way I operate is very simple - I will monitor this basket every few days and whatever is outperforming on looks good on the charts - I will add more to them. Whatever looks bad, I will either give it a few more days or cut the position. I will post this snapshot every week maybe Friday going forward. This is to monitor a pure cash portfolio performance using Hurst cycles.
EDITS:
11 AM: Should have updated before..Todays move kind of shows the downpressure. Unless we take some support around here, we will go down to test 4950-4920 range again. I have been adding shorts from 5090 NF since the morning. Looking good so far. Regd the stocks portfolio, like I said, days like these are an opportunity to cherry pick. The key is not to get over excited and do everything in one day. We have till Nov 1st week.
11:45AM: May be overdone for today. Exiting shorts at 5040 and going flat. GN!
Best,
Lee
Another thing I just wanted to show. See this below chart. This is a slightly modified model(expert model in the software) I am using. This one actually says the 80week low is already in. I dont like the 'look' of this due to various reasons..So not favoring it at the moment. But it is however a very good possibility considering the strength over past several days.
Lets see how far the next low comes - depending on that we can confirm. Remember shorter term this doesnt make any difference - 2.5, 5 week cycles are all operating fine.
I have been building into stocks whenever we have been having big bad down days..Its been going good so far. Around 30% into cash stocks right now. Rest I will be building in whenever we get big down days.
I am including a snapshot of what I hold right now..Entry price and current price along with current profit percentage. For obvious reasons I am not including quantity/size here. But I am 30% invested now - will add more on declines. The way I operate is very simple - I will monitor this basket every few days and whatever is outperforming on looks good on the charts - I will add more to them. Whatever looks bad, I will either give it a few more days or cut the position. I will post this snapshot every week maybe Friday going forward. This is to monitor a pure cash portfolio performance using Hurst cycles.
EDITS:
11 AM: Should have updated before..Todays move kind of shows the downpressure. Unless we take some support around here, we will go down to test 4950-4920 range again. I have been adding shorts from 5090 NF since the morning. Looking good so far. Regd the stocks portfolio, like I said, days like these are an opportunity to cherry pick. The key is not to get over excited and do everything in one day. We have till Nov 1st week.
11:45AM: May be overdone for today. Exiting shorts at 5040 and going flat. GN!
Best,
Lee
Tuesday, October 18, 2011
2.5 week low is close...
3 charts posted below. Most of my comments are in there. 2.5 week low seems to be coming in...Maybe today or by tomorrow..From where we should have another bounce before declining into our expected nest of lows toward Oct end-Nov4th timeframe.
If you missed it, check out my last post where I have explained how the Hurst software works. And also given more details on its benefits. Also check the comments section.
LINK TO SENTIENT TRADER
Best,
Lee
If you missed it, check out my last post where I have explained how the Hurst software works. And also given more details on its benefits. Also check the comments section.
LINK TO SENTIENT TRADER
Best,
Lee
Monday, October 17, 2011
Some thoughts..
Charts are there in previous posts. Still relevant for today. Just thought I would add some words to it for today :)
Looks like the 2.5 and probably the 5 week cycles have topped and we are now moving toward the 2.5week low expected this Friday(+or-1day). From there we are likely to have a bounce which can be again reshorted for a downmove into the 80week cycle nest of lows expected in Nov 1st week.
Now there has been a lot of good debate on the extent of the next downmove - some of this can be read in the earlier post comments. We are clear about the direction but its the magnitude that is doubtful at this point to me. Why? Because the upmove we saw from the last 5 week low was pretty awesome. And its not something one might expect from the last 5 week low in this 80 week cycle. So for this reason, the downmove also might not be as big as was initially expected. Now remember this is all speculation - we are sure of direction..so let us play that for now. Let the market go where it wants to go - we will profit from it as we know the time cycles.
Now why do I think this downmove wont be as big as initially expected? Market Internals are the major reason. Sunil over at TIMAMO has given some good studies on it. This is just one thing. Breadth is important - its like looking under the hood at a car's engine - on the surface things can look great or ugly..its only when you lift up the hood and look at the internals that you begin to see things that werent very obvious before. Sunil does some pretty good studies on this.
Apart from this, I track internals of the US market very closely..Better tools are available for this. And things are slowly becoming bullish.
All these reasons are telling me we might get at best a higher low. And for this reason, I do not think we will break 4700 this year. But I still reserve the right to change my views at any point :) I have been wrong many many times before! :D
But remember as I said above - Trading has got nothing to do with these so called forecasts. We trade for money and NOT to be RIGHT - Want to stress this point.
Many times I end up being wrong - but still manage to make some money out out it. As traders this should be our aim. Ego can be costly to any trader.
Now coming to cycles - I have some ideas as to why we might be turning bullish earlier than expected - Its because of sectors. Meaning there are many sectors out there..Oil and Gas, IT, FMCG etc..some of these sectors might have already bottomed out with their 80 week cycles..And so they might be lending upward pressure even though the broader 80 week lows have not yet come in. So...what I would say is be careful either way out there..The fag ends of cycles can be brutal if we have fixed mindsets - So I just say be flexible in your thoughts and positions.
Position Updates - I am short from yesterday open. Will try to cover at the 2.5 week low and reshort on a bounce into the 80 week low. This is the plan. I will also be looking to buy into good stocks for delivery as we go into the expected low. I am starting some pilot positions already just to track them. Let the market decide how far it wants to go in this downmove.
I hope with above post and explanation, my stand on this is a little bit more clear.
I dont really care how far down we might go.
=====================================================================================
Ok, so thats my thoughts on the market. Next, several folks asked me about the Hurst software that I use and they wanted to get some more idea around it. I am going to do a write up here..show some examples of how the S/W works. The trades it generates, projections etc.
The software is called Sentient Trader. I have given a link on the top of this page which will direct you to the home page of Sentient Trader.
About the S/W - It is a great package out there in the market today which sticks to Hurst Cyclic principles to generate cyclic projection both time and price based. So it will give you projections in time and for price as well. And you can use this to analyse any market out there provided you have the data for it. Overall the software package is pretty awesome. It is expensive but worth every cent. I was very skeptical before buying it but have to say was pleasantly surprised by how much it has improved my trading. And whatever it cost me, I easily made that back and more within few weeks. It aids me a lot in all of my trading decisions and views nowadays. Readers on this blog would have seen the calls I made over time and you can judge for yourselves. Sure there have been duds - but that what makes the market. Cannot expect to hit home runs all the time. But on balance the software is an excellent aid to any serious trader out there in the market - Any market. We as Indians are always stingy when it comes to buying software - I know - But believe me this is worth every single cent.
CLICK HERE FOR THE SENTIENT TRADER HOMEPAGE
A chart that shows better what the software does -
(see also the charts from previous post: I think they are very clear)
There are many many other features also in the package. FLD lines which generate price targets..VTLs which will show if a low has passed on not and so on..Too much for me to go into in one post..But I will try to in later posts.
Feel free to ask me questions. I will be happy to answer.
Bests,
Lee
Looks like the 2.5 and probably the 5 week cycles have topped and we are now moving toward the 2.5week low expected this Friday(+or-1day). From there we are likely to have a bounce which can be again reshorted for a downmove into the 80week cycle nest of lows expected in Nov 1st week.
Now there has been a lot of good debate on the extent of the next downmove - some of this can be read in the earlier post comments. We are clear about the direction but its the magnitude that is doubtful at this point to me. Why? Because the upmove we saw from the last 5 week low was pretty awesome. And its not something one might expect from the last 5 week low in this 80 week cycle. So for this reason, the downmove also might not be as big as was initially expected. Now remember this is all speculation - we are sure of direction..so let us play that for now. Let the market go where it wants to go - we will profit from it as we know the time cycles.
Now why do I think this downmove wont be as big as initially expected? Market Internals are the major reason. Sunil over at TIMAMO has given some good studies on it. This is just one thing. Breadth is important - its like looking under the hood at a car's engine - on the surface things can look great or ugly..its only when you lift up the hood and look at the internals that you begin to see things that werent very obvious before. Sunil does some pretty good studies on this.
Apart from this, I track internals of the US market very closely..Better tools are available for this. And things are slowly becoming bullish.
All these reasons are telling me we might get at best a higher low. And for this reason, I do not think we will break 4700 this year. But I still reserve the right to change my views at any point :) I have been wrong many many times before! :D
But remember as I said above - Trading has got nothing to do with these so called forecasts. We trade for money and NOT to be RIGHT - Want to stress this point.
Many times I end up being wrong - but still manage to make some money out out it. As traders this should be our aim. Ego can be costly to any trader.
Now coming to cycles - I have some ideas as to why we might be turning bullish earlier than expected - Its because of sectors. Meaning there are many sectors out there..Oil and Gas, IT, FMCG etc..some of these sectors might have already bottomed out with their 80 week cycles..And so they might be lending upward pressure even though the broader 80 week lows have not yet come in. So...what I would say is be careful either way out there..The fag ends of cycles can be brutal if we have fixed mindsets - So I just say be flexible in your thoughts and positions.
Position Updates - I am short from yesterday open. Will try to cover at the 2.5 week low and reshort on a bounce into the 80 week low. This is the plan. I will also be looking to buy into good stocks for delivery as we go into the expected low. I am starting some pilot positions already just to track them. Let the market decide how far it wants to go in this downmove.
I hope with above post and explanation, my stand on this is a little bit more clear.
I dont really care how far down we might go.
=====================================================================================
Ok, so thats my thoughts on the market. Next, several folks asked me about the Hurst software that I use and they wanted to get some more idea around it. I am going to do a write up here..show some examples of how the S/W works. The trades it generates, projections etc.
The software is called Sentient Trader. I have given a link on the top of this page which will direct you to the home page of Sentient Trader.
About the S/W - It is a great package out there in the market today which sticks to Hurst Cyclic principles to generate cyclic projection both time and price based. So it will give you projections in time and for price as well. And you can use this to analyse any market out there provided you have the data for it. Overall the software package is pretty awesome. It is expensive but worth every cent. I was very skeptical before buying it but have to say was pleasantly surprised by how much it has improved my trading. And whatever it cost me, I easily made that back and more within few weeks. It aids me a lot in all of my trading decisions and views nowadays. Readers on this blog would have seen the calls I made over time and you can judge for yourselves. Sure there have been duds - but that what makes the market. Cannot expect to hit home runs all the time. But on balance the software is an excellent aid to any serious trader out there in the market - Any market. We as Indians are always stingy when it comes to buying software - I know - But believe me this is worth every single cent.
CLICK HERE FOR THE SENTIENT TRADER HOMEPAGE
A chart that shows better what the software does -
(see also the charts from previous post: I think they are very clear)
There are many many other features also in the package. FLD lines which generate price targets..VTLs which will show if a low has passed on not and so on..Too much for me to go into in one post..But I will try to in later posts.
Feel free to ask me questions. I will be happy to answer.
Bests,
Lee
Sunday, October 16, 2011
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