Thursday, October 30, 2008

Hurray! another white candle....

0600hrs 31 Oct 08: The US closed green in so called "relatively calm session" by yahoo finance. Dow has ended 2.11% up, Nasdaq 2.49% up and S&P 2.58% up. In Asia however Nikkei has begun session in red - and dropped deeper red - presently at 3.75% down.

30 Oct 08: It was a white candle - so what if the body was just about 12 points big. Well we can say that it was a Doji. More of it when we see candles a little later. Are the bear giving up? They should after the way they have battered the bulls recently. Are bulls still alive? No way - like so many people are saying and expecting - do not buy this as a bull story. All recoveries - to whatever levels are still likely to be just false and the falls back will be more vicious. The suggestion now-a-days is simple - you have a profit in your pocket - get out and sit to a side and watch the action. If you are not a compulsive trader then the fun is to remain on the sidelines and seize opportunity if you get one. Whatever anyone may say - we should move up from these levels and it should be so because - we are here at these levels that are not really justified. Markets may have a mind of their own - but it is difficult to believe them at the moment. All the same - we may visit these levels in future - after all now everyone is naming this as bear times. All the same the rally now - for whatever it is likely to be worth it will run for some time - so being in a hurry will not be a virtue either way.

The world markets are doing pretty well as we remain closed. I am sure that by the time we are ready to open tomorrow - the tides will definitely turn. Asia opened flat and continued a steady climb ending at the best levels of the day. Nikkei was up 9.96%, Hang Seng ended 12.82% up and Strati Times was up by 7.82%. Europe too opened flat - dipped down and then climbed well into the comfortable green territory. The US opened and the AmEx job cut of 10% weighed down heavy on both the Europe and US. Europe stared going down lower and at the moment FTSE is just 1.13% in green, Dax is 3.22% in green and Cac is already in red down 0.65%. The markets are seeming like stablising though. Hope they end in green only. In US two news are playing their role - first was the job cut of 7000 by AmEx - the second is GDP report that says that the economy is contracting at a rate lower than expected. All the same US opened comfortably in green and has ever since been going down. We are just short of the mid session are presently down - from a start in green - the US is now howering around the flat line. There is a strong possibility that the ending is green - but markets are just unpredictable now-a-days.

Well on the candles as I have already mentioned. The candle is a Doji - well it does not make too much sense since we hardly had a trend it is trying to change. I would rather clasify it as confusion and utter confusion alone where neither bulls or bears have charge of the situation. Well as far as the Bollinger bands are concerned the width has not varied - so do not see a change in overall direction anytime soon.
The Divergence between the red and blue line has reduced somewhat - but the red line continues to trail below the blue line. The volumes were good. The Bollinger band divergence has reduced but red line is still below the blue line, Mass index line is still above 26. RSI remains in oversold territory. SlowStochastic red line is above the blue and both above the 20 marker heading towards the 50 marker. The TRIX still looks down. SO that is all that there is.

A fuel price cut on the cards? - it should ordinarily go a long way to take us into some sort of recovery. Waiting.. waiting... waiting...

Inspite of US looking down at the moment I feel that they may close in green and we may have a kick start of a good session. Best of luck to everyone.


Wednesday, October 29, 2008

Belated Happy Dipawali.....

Firstly let me please wish everyone of you a belated Happy Dipawali! I hope and pray that this Dipawali onwards all of you make tons of money. Well I was on a self imposed three days off the markets. Actually my schedule for past few days had been so hectic that I did not have time to check mail, see markets leave aside trading. There was nothing in the markets that would have cheered me - or for that matter anyone except the Mahurrat Trading yesterday - Ofcourse it came as an answer to a million prayers ;-).
"All that goes up - must come down..." well the opposite also has to be true. There is another angle to it... the sharper the rise the harder the fall... so putting this the other way ... the harder the fall - the sharper the recovery. Well I am sure that the ferocity of this rise now will kill as many bears as many as the dead bulls. Would I buy in this - ? actually I should have already bought - like they say - there is nothing like finding the exact bottom or the exact high a day prior to when it happens.

Well I will not talk about the Global cues a day before - but for today - the world has gone crazy it seems covering their shorts. FTSE and CAC were the moderates closing just 1.92% and 1.55% up. Dax is up by 11.28% up. US gains too are nothing but out of the world. Dow up 10.88%, Nasdaq up 9.53% and S&P up 10.79%. If the bears do not cover in these circumstances then they never will. Asia too has started on firm footing. Nikkei up 6.18% in early trade. Hang Seng and Strait Times - both up 1.49% and 2.42% as of now. Nikkei had opened moderately up and moved up with vigour and the other two are just about oscillating in positive.

On to the candles now. There was a Hammer day before - on 27th. The following white candle should signal a reversal in short term. See the problem here is that the trading was only for an odd hour and the volumes were too low - means the bears may be too busy celebrating to be involved in the markets. The real conformation that should come - would be today as to where we swing. The Bollinger bands continue to be as wide as before. The 5 EMA too is still way below the blue line - but slightly lesser than day before. The MACD divergence has reduced a little bit. Mass index is on 26 point. Have no doubt about this rally - we will at some time retest these levels we are leaving behind. The RSI is grossly oversold and that should be a relief to bulls (if there any left in the wild - and have not been tamed so far). The TRIX still continues to look down with still no mood to look up. The Slow Stochastic - red line has crossed over above the blue line and has infact come out from below the 20 marker. The blue line remains below the Red line now and still not out of the oversold territory. So as I see it - we should hit and break a couple of resistances and that should be helped by massive short covering that should trigger off - the last Thursday being tomorrow.

Best of Luck everybody.


Friday, October 24, 2008

Welcome to the new dawn....

Or Dusk .. the dawn part is my wishful thinking. Well we were not wrong to have guessed a recovery yesterday - so many reversal signals that I had to respect them - but to hold at those levels with the cash rich bears - well that is a different story itself. I will not be able to comment on why we went lower - I really do not know nor see them. I also think that nothing really is mattering in this rot that has spread in the system - it will take its own time and reason to come out.

Well the Asia closed red yesterday - and we were the part of that closing. Europe opened Green and went down deep red but recovered somewhat by closing. FTSE was finally up by 1.16% on closing, Dax down 1.12% and CAC up 0.38%. It is however US's turn to behave confused and not know what signals to take and what to filter out. Dow opened flat went red climbed well into green to touch days lows and then once again close green/red - depending on which index you are seeing. Dow was up 2.02%, Nasdaq down 0.73% and S&P up 1.26%. This confused state of US has failed to cheer the Asian markets and they started the last day of the week with a red bang. Nikkei is down 4.11% and Strait Times down 2.37%. Now the question - will they recover and help us recover or will we recover and help them come off the days lows?

On the candles there is a second black candle of almost the same length of the last one. Another one will sort us out as the pattern that can now be made is the "Three Crow Pattern" That will not be good and I am praying that it does not do so. What I suppose it would or should happen is that we should open lower taking cues from the Asian opening and then steadily recover - if that be so then we may have a white candle and that would be really great. The Bollinger bands are of the same width as before. 5EMA line is still as below the 20 EMA line as earlier. The volumes were fairly high yesterday. The MACD divergence has increased and Mas Index is now below 27. I will spend the week end on Mass Index and try to ask it - what it is really intending to indicate. RSI has once again dived down in the oversold level. TRIX continues to look down. MACD red and blue lines are virtually overlapping and below the 20 marker - it has now been there for more than an average time it is seen below the 20 marker. It needs to get out of this situation soon.

There is nothing much to say or do. As I am about to put the blog online the Asia is in red - Nikkei down 4.33%, Hang Seng down 2.05% and Strait TImes is 2.89%. Best of luck.

Hey someone has rated last post as five star that said I will not be able to Post an update yesterday - am I hated so much that not able to post is being taken as a welcome relief? RFOL

Investigation complete - that was my dear pop giving me a five star rating on the last post - LOL


Thursday, October 23, 2008


It would be extremely difficult to post updates if any today as I have an engagement for the evening. Will try my best to do it in late night or tomorrow morning.


Wednesday, October 22, 2008

A bad day..... but was it really unexpected?

1150 hrs: Hope and a prayer will help us break above 3000k and then bears are in for a rude shock. Inflation - 11.04%

0800hrs: Nikkei - 5.52%, Hang Seng 4.38% and Strait Times 3.96%. I hope that no one is taking them to be positive. All down.. down.. down. Do I see ting of recovery? or are my eyes playing cruel jokes on me?

22 Oct 08: We have got used to every small increase in value in the markets followed by a sell off. Partly it is because of the sentiment and partly because we are not convinced of any long lasting health of our economy. Is it right or wrong... it is a long and a fruitless debate. There are good reasons to justify both sides. Unfortunately the fact is that in this environment - the fear and panic is being created by almost all channels of propaganda that are available, be it news, financial dailies, internet.... blah blah blah... the list goes on and on. I call it propaganda because most of the times they are just trying to read into blank sheets of paper. The results have not been half as bad as expected by the markets, commodity prices are falling (may be because of the anticipated cooling of demand - but all the same) and will lead to easing of inflation. Demand may be lowering but not drastically. Our own demand is self sustaining in many spheres. Yes the times ahead may be bad - but maybe not as bad as being propagated.

Any way - let me get on to my blog - there was blood on the Asian streets and were just part of the overall bear plan. BSE and NSE fell 4.81% and 5.25% respectively - just in line with the other asian economies - Nikkei down 6.79%, Hang Seng 5.15% and Strait TImes 5.19%. Europe tried a half hearted act at recovering after a red opening but was unsuccessfull ending - FTSE down 4.46%, Dax down 4.46% and CAC down 5.1%. These levels were the bottom most in most cases. US too opened red and has been thereafter trading in a narrow band. Dow as of now is 3.05% in red, Nasdaq down 1.82% and S&P down 3.27%. Chances of recovery?.... well perhaps... will update tomorrow morning.

Candles -- well for those of you who would understand -- "Gayi Bhans Pani Mein..." All the good show by the last two days of white candles have gone down the drain. But all the same the bottom has held and may give us a reason to again try a pull back. The candle bottom on 17 Oct was 3047, on 20th was 3059 and today it has been 3052. So there may be a barrier here that may hold in short term - however if it breaks then we should see - into a very deep dark pit. The closing too had been 3074 on 17th and 3065 today. Pray and that is about all. The Bollinger bands are back -- expanding I mean. 5 EMA line has again dropped down the 20 EMA line. the volumes were lower than yesterday. MACD divergence has lessened today - surprisingly. The RSI is back to the oversold territory. Slow Stochastic too is in oversold territory and red and blue lines are overlapping. Mass Index line has dropped reaching just above the 27 line. The TRIX still looks down.

The rupee - after showing some strength is again weak. Short selling via the P-notes has been banned - or an understanding to this effect has been reached. Fairly good company results. Oil down .. down.. down .. 68$ a barrel. And nothing else. If you have something that can help recovery - you are most welcome to post here... Best of luck.


Tuesday, October 21, 2008

Open with strength ..... Close with .... Weakness?

0600hrs 22 Oct 08: Yahoo did it - do not blame me please - they are laying off 1500 people and the profits have dropped 64%. The US markets have finally ended Dow down 2.5%, Nasdaq down 4.14% and S&P down 3.08%. Nikkei has opened red and slipped deeper - presently at 2.62%. Welcome to Russian Roulette.

21 Oct 08: Okay - slowly and steadily we have the indicators coming back showing consolidation/reversal. One must keep in mind that every attempt to recover will be met with resistance. There is bear talk and everyone and anyone who gets a pie in the market will take it out and wait for entering again. Personally I would prefer a slow and steady recovery - rather than a runaway increase in markets and a fall the next day. This would be interspersed with periods of uncertainty still - but in the end we are somewhere in the bottom of wishing well and all we can do is to inch up and out of it. There are people saying 2800 or 2500 on Nifty. I cannot take positions or neither would I like to comment on these. 50% chances will remain that they will be right and 50% that they will turn out to be wrong. 3200 had turned out to be a good support level and so was 3000 level. Beyond this I do not know.

Okay we did have a run and like I said earlier - it is the best that we move up steadily rather than rushing into trouble. Nikkei opened green and closed up 3.34%, Hang Seng too opened green but could not sustain it ending 1.84% in red and so did Strait TImes ending 0.95% down. Europe too could not hold out on to the gains and lost ending in red. FTSE was down 1.58%, Dax down 1.51% and CAC was half a tick up at 0.62% in green. SO seeing this do we already have a case to give up the gains of last two days? Well the US opened red and made a attempt at the recovery and have fallen down once again - Dow down 1.37%, Nasdaq down 1.89% and S&P down 1.62%. It is still mid session and a lot can happen towards the ending - may swing wildly as it has been doing for last so many sessions. In any case I strongly believe in TRIN and the Jaggu's TRIN has been posted as bearish. The oil should have ideally risen now that the cut in production is being thought about by OPEC - but the fact that it has fallen - proves that the crude sees the demand tapering off even more in coming days. Not good ... not good...

Our candle today too was not bad trying to get out of the envelope of the day before's black candle. The Bollinger bands have tapered a wee bit -- a begining - the 5 EMA has faced up for the first time after a long bearish phase to reduce the gap with 20 EMA. The volumes were good - or rather better than before. The MACD divergence has reduced a little bit. Mass index is looking down (forget this part) Whatever the mass index does now will just indicate the bearish phase only. TRIX is still looking down but the slope has eased off a little. The RSI has come out of the oversold zone and has tomorrow to be sold into and go back there. That's not too good - all the same the RSI will help recovery. On the slow Stochastics the blue line has joined the red line below the 20 point marker - entering the oversold zone and the red line has shown the courage to cross over the blue line. this may be good. Can help us give a break for a few days.

All in all nothing particularly positive or negative - the ongoing result season and the global cues will effect us more than anything else. If the US remains like this then it can only signal weakness and not strength. But a red opening may be followed by a recovery than deeper red - all we have to do is to wait and seeeeeeee...........


Monday, October 20, 2008

Not bad for the otherwise a pessimist day....

0530 hrs 21 Oct: The US markets have ended higher on account of hopes that there are signs of reviving credit market and support from Fed Reserve Chairman for further steps to aid economy. The Dow has ended 4.67% green, Nasdaq 3.43% up and S&P 4.77% up. The fence sitter bulls should now jump in and we too should have a good green day.

20 Oct 08: The bears tried today too to break the bulls will as they tried to recover the markets from the bear onsalught for last so many days. There are now build up of reasons - both technically and fundamentally that favour a pull back but the bears are really in no mood to give up that easily. I am now convinced about the fact that we are around a corner for a pullback - how long or how far it takes us - I will not double guess it.

Okay the world markets behaved somewhat well if I am permitted to say. Asia opened flat and then on a steady pace went on to close at good greens. Nikkei was up 3.59%, Hang Seng was up 5.28% and Strait Times was up 3.23%. The Europe opened green but was not really decisive of holding on to the gains - but by the mid session were on firm footing. FTSE was up 5.41%, Dax (the weakest) was up 1.12% up and Cac was up 3.56%. By this time the US futures were showing signs of going up. The US people are touchy and are with shattered nerves - however they too opened green went south momentarily and are now trading green towards their mid sessions. Dow is up 1.93% Nasdaq is up 0.69% and S&P is up 2.1%. Like I alwasy say when I catch the US mid session - there is a long way to go for them to close firmly green or red. Too much can happen in too little time now-a-days.

On the candlesticks we have another sign of reversal - the Spinning Top. This is the second trend reversal signal that we have got. How far will we ignore them? I really do not know but the fact of the matter is that today the fight was intense and bears are somehow loosening their grip. But before anything else the candle on the following day has to support the trend. So all we can do is to wait and see that this recovery trend is of some substance. The Bollinger bands are widening and showing no signs of narrowing - well that has to happen if we were to recover meaningfully. The 5 EMA continues to be below 20 EMA line and it is way way down. The volumes were low. MACD divergence is same - give or take a few points. Red line is below the blue line and shows no sign of facing up. TRIX remains to look down. Slow Stochastic red line has entered the over sold territory and blue line is following closely behind. RSI is in the oversold territory.

All in all - slowly a lot of indicators are reaching the extreme positions - time for them to turn? Wait and see for yourself tomorrow if all goes well.


PM Manmohan Singh's statement in Lok Sabha - must read for his insight on the subject

Manmohan Singh / New Delhi October 20, 2008, 19:19 IST

Mr Speaker Sir,

I wish to make a statement on the ongoing global financial crisis and its impact on India. Honourable Members are aware that this crisis had its origins in the United States and spread quickly to Europe. While the crisis began in the housing mortgage market, it soon extended to the money market and the credit market. As a result, several financial institutions were pushed to the brink of insolvency. The US and some other developed countries have bailed out a number of financial institutions and banks. They have also taken a number of unconventional steps to infuse liquidity, recapitalize the banks and unfreeze the credit market.

The financial storm has shaken confidence in the system and precipitated a steep decline in stock markets.

It has produced a sharp slowdown in economic activity, with the prospect of a prolonged recession in industrialised countries. Many observers have described this as the worst crisis since the Great Depression of 1930s.

India, like other developing countries, is experiencing the ripple effects of the financial crisis. However, we have taken a number of steps to minimise the impact.

Our first concern was to ensure the stability of our banking system. I am happy to inform the House that the Indian banking system is not directly exposed to the sub-prime mortgage assets. Their exposure to other problem assets is also minimal. Our banks, both in the public sector and in the private sector, are financially sound, well capitalised and well regulated. There should be no fear of a failure of any bank. In particular, I wish to assure depositors in our banks that their deposits are entirely safe.

Although our banks are safe, and they are also providing credit in line with anticipated credit targets, the global turmoil has led to a contraction in other forms of commercial credit. External commercial borrowings, which are used by the corporate sector have dried up, as have international suppliers credits. This has led to a reduction in overall credit availability in the economy even though credit from commercial banks has expanded satisfactorily. This contraction produced a liquidity crisis in the system.

We have taken a number of steps to address this problem. Between July 6, 2008 to October 15, 2008, the RBI cut the Cash Reserve Ratio by a total of 250 basis points. The SLR requirements were relaxed initially by 1 percentage point and subsequently an additional window of 0.5 percentage points was introduced specifically to enable banks to draw funds to provide liquidity to mutual funds.

As a result of these steps, the liquidity position in the financial system has improved considerably. The call money rate today is around 6.8 per cent.

Government also arranged to provide, in advance, a sum of Rs.25,000 crore to the banking system under the Debt Waiver and Debt Relief Scheme. The limit of investment by Foreign Institutional Investors in corporate bonds was increased from US$3 billion to US$6 billion.

Earlier today, the RBI announced a 100 basis points cut in the repo rate which is the rate at which banks can borrow against surplus SLR securities. Government welcomes this decision. It will have a beneficial effect on the interest rate structure and, in combination with the other steps to increase liquidity, will help to support economic activity and investment. It is broadly consistent with our objective to control inflation which has already begun to moderate.

I am happy to inform Honourable Members that the Wholesale Price Index has declined in the last three weeks and, although the current rate is still high, the movement in the level of prices shows a clear deceleration in the current momentum of inflation. We expect a further reduction in the Wholesale Price Index in the next two months.

The Government is conscious of the fact that it is not enough to infuse liquidity. The liquidity must translate into expanded flow of credit to industry, trade and business. Suitable advisories have been issued by the RBI and the Ministry of Finance to the banks to ensure that borrowers are provided adequate credit, including export credit and working capital. Banks must also provide adequate funds in the form of investment or credit to mutual funds and NBFCs who, in turn, lend to industry, trade and business. These institutions are an important part of the larger financial system and banks are being encouraged to provide liquidity to ensure that there is no disruption in economic activity.

Both RBI and Government are carefully monitoring the flow of credit and will ensure that the additional liquidity infused into the system translates into actual credit. We will not hesitate to do more if needed. While the capital adequacy ratios of all our banks are well above the Basel norm and above the RBI stipulated norm, Government has promised that it will help banks, which have lower ratios, to access funds to increase their Capital Risk Weighted Asset Ratio to 12 per cent.

Mr Speaker Sir,

The financial crisis and the economic slowdown in the developed countries is likely to have an indirect impact on the Indian economy. Fortunately, this effect will be on an underlying strong performance. GDP growth in the first quarter of 2008-09 was 7.9%. During April-August, 2008, exports increased, in dollar terms by 35.1 per cent. Foreign Direct Investment, during this period was US$14.8 billion. Gross tax revenues are on target.

The CMIE database shows that a huge amount of money towards capital expenditure is in the pipeline.

Nevertheless, we must be prepared for a temporary slowdown in the Indian economy. The precise impact is difficult to estimate at this point since the depth and duration of the global slowdown remain uncertain. Some estimates project GDP growth to decelerate to 7.5 per cent in the current year. The most pessimistic estimates place it at no less than 7 per cent. Our effort will be to minimise the negative effect of the financial crisis and, once the global situation stabilises, to return to the growth trajectory of 9 per cent. I would urge Honourable Members and the people of India to continue to repose faith in the fundamentals of the Indian economy.

Honourable Members will recall that, in anticipation of a slowdown, we had stepped up public expenditure in the Budget presented on February 29, 2008.
Our expenditure proposals were criticised at the time in some quarters, but I am happy to note that it is now widely acknowledged that increased public expenditure is an important part of the solution. Our expenditure on education, health, NREGP, NRHM, AIBP, JNNURM and other programmes will, I believe, stand us in good stead in these difficult times. Besides, the debt waiver and debt relief amounting to Rs.65,000 crore to 3,60,00,000 farmers will also greatly benefit our farmers and enthuse them to increase production.

Mr. Speaker Sir,

India has faced challenges in the past and has overcome them. We have the strength to overcome the current challenges too. In fact, it is when India is challenged that the Indian people rise to the occasion and convert the challenge into an opportunity. There is no place for fear. This is the time for unity of purpose and resolute action.

I seek the support of all sections of this House to the measures taken by Government and the authorities.

Thank you.


Sunday, October 19, 2008

Hope dashed.... Well let's try one more day..

0915hrs: Two more things other than the Bullish RSI divergence as quoted on Jaggu's blog that show that we may have a OK green day today is that Crude is up - the crude for a long time now is moving in step with the markets - markets drop - crude drop and vice versa. Second is the Asia too has opened in green. Reason enough to smile?

19 Oct 08: Actually I was seriously contemplating whether I want to update the blog for tomorrow. There is no point actually when there is no fundamental or technical that is likely to play out in these markets. The US Drops - we are in dumps. US shows recovery - we are still in deeper dumps... I have now started looking at myself and doubting what I see ... no way we should have dropped like this. Actually it seems that there is no effort whatsoever by the bulls to even get up and try to fight. See it may turn out to be a strategy by the bulls to let the bears over-leverage themselves -- and kick the bucket (Seems like my wishful thinking only). After all the markets will drop if there is selling - or shorting in the market. There will be a point when the bears - sitting on tons of profits will say - what the hell - let me take profits home and we might recover. This also may be assisted by the bulls by trying to show strength and making bears jittery - after all the way we have gone lower one level after the another - the more sensitive will the bears become of looking forward for jitters. All the same let us see - how we are likely to fare. Hey by the way - did you notice - I had written some time back that if we break 3600 on nifty we have support on the charts at 3200 and after the 3200 is broken - 2500 is the next possible easy target for bears?

On Friday Nikkei was green +2.78%, Hang Seng and Strait Times were 4.44% and 3.73% down in red respectively. Europe was good - I do not know what exactly they expected out of US - but FTSE, DAX and CAC ended well in green 5.22%, 3.43% and 4.68% - this mind you was after a turbulent session - the European indexes touching flat line/going briefly red too. The US -- well started flat /red and then climbed into the green territory - getting news on the employment data and closing red. The Dow was down 1.41%, Nasdaq was down 0.37% and S&P was down 0.62%. Now all we have to do is to wait for the Asia to open - well before you ask me - the answer is that I do not have it any longer in me to give it a try to second guess opening or closing.

As far as the Candles are concerned - there is nothing that I can tell you new. They are same as before except adding a new shining black candle to their cap. The hammer did nothing and in anycase was not likely to do anything in absence of any support from any other indication. The Bollinger Band is widening - It is too wide as far as I am concerned and it cannot now continue this way - well this is what I feel and market of late have stopped listening to me. The 5 EMA line is way below the 20 EMA line. Volumes we shade less than on thursday. the MACD divergence has once again increased and that is not good at all. Mass Index is still above the 27 level. RSI is back in the oversold category. the Slow Stochastic red line is about to hit below the 20 marker - and will be oversold - the blue line that is above the red line is yet to come near the 20 marker. TRIX - the so called leading indicator is still looking down in dumps. So that is all there is to it. I am however sure of one thing - we will bounce back and the bounce back may be violent whenever it comes. I am being selfish today and saving all the good luck for me only and not sharing ;-)

GOD bless you all.


Thursday, October 16, 2008

Hope ahead!.....

Okay there was turmoil on the markets - and that is expected to be there for some time to come. This is an opportunity for many day traders who are extracting their pound of flesh. To investors - well they would have to wait still for the clarity of thought to come across.

The Asian were weak and Nikkei was down a thousand points - I wonder why a thousand points up or down do not surprise me anymore. Hang Seng was down 4.8%and Strait TImes down 5.25%. We would this way classify ourselves as out performers with Nifty just 2.07% down - recovering from a 200 point drop in the middle of the session. Europe opened deep red - recovered touching green and then slipped even more red than before ending - FTSE at 5.35% down, Dax 4.91% down and Cac 5.29% down. In US too the stocks have been swinging wildly and presently the Dow is 0.82% down, Nasdaq 0.33% green and S&P 1.39% down. We are just past the mid session and anything is possible - most probably the market may recover and end green or at the most flat. That should ideally help the Asian markets to fare better than today.

On the candles the pattern is of a hammer today - where the bulls and bears stood and fought it out. Though the body of the candle is black - but the indications of some sort of recovery are strong. So brace yourself. Again the candle voilated the lower band of Bollinger and the bands continue to widen for almost completely this month. Volumes were higher than usual or past few days. RSI is back in the oversold territory - below 30 marker. Mass Index is flat - nor going up but neither looking down as yesterday - it really implies nothing. TRIX continues to look down so this bear pressure would ideal manifest itself every time we go up. The slow stochastic were short of 50 and red line is trying to cross over the blue line below. Bad would be the trend. So this yo yo is likely to continue and we are likely to remain range bound 3200 - 4200. Let us see how the market behave tomorrow. Best of luck and bring home some profits.

Though the oil is falling on economic concerns of US and Europe - but it will work in our favour and any cut in fuel prices in coming days will go well with the markets.


Wednesday, October 15, 2008

Welcome to the Bear country....

0515 hrs 16 Oct: Okay the US has closed and the news as expected is not a good one - US closed down deep red - Dow 7.87%, Nasdaq 8.47% and S&P down 9.03%. Cannot even say best of luck... really.

15 Oct 08: Oh! the Heading? I did not mean US - I meant us (India). I am sure that the so called recession will not have as wide ranging effect on us as US or Europe - but till everyone realise it - for all practicle purposes we are as deep down in trouble as anyone else. I am happy for one thing in spite of loosing so much for so long - I am happy because now - that one man - (guess who) is not able to sway the markets with one statement of his. If I do not make money by his swings - neither should he! In the past he used to sway the markets on his whims so many times.

I will be en-cryptic in my blog update as my engagements here are still hardly giving me time at all. In asia only Nikkei closed in green up 1.06% rest hang Seng and Strait times were down 4.96% and 3.24% respectfully. Europe took on the tasks to prove the bears point of view regarding the state of economies and FTSE plunged 7.16%, Dax down 6.49% and Cac down 6.82%. The disappointment in US continues as the DOW has once again slipped below the 9,000 mark and is now 3.65% in red, Nasdaq down 3.82% and S&P 500 down 4.39 percent - and they are just in the mid session - where they go from here is anybody's guess - but Red is most likely.

As far as the candles are concerned - we are back to the square one - Bollinger bands widening - giving strength to the down trend, candles once again hugging the lower portion of the band, Low volumes, MACD divergence increasing a wee bit with the red line still way below the blue line. Mass Index now looking down towards the 27 mark, RSI going back to the oversold territory and TRIX still looking down. All in all there is not even one indication that gives us hope. so here we are - at the mercy of the bears. Bears will test recent lows? maybe but if 3200 does not hold then we have 2500..... Yeah that is way down but then this is what it is. In all probability though the majority of the voices say that we will not voilate 3200 levels. All the best to everyone. May the month end bring your positions in profit.

Listen - Crude is now 75$ a barrel - do not take the drop lightly - a fuel rate cuts may bring cheer to our economy and turn out to be a pleasant surprise.


Tuesday, October 14, 2008

Given Up? .... Already??

0830hrs 15 Oct: Well I tried to search the difference between the Inverted Hammer and the Shooting star but was not quite successful as related to the candle made specific to our Nifty closing yesterday. Now the Inverted hammer is bullish and shooting star on the other hand is bearish. Seeing the Global cues the Shooting star is more likely to be played out and proved right. If anyone can help me with this I would be greatful. Except for Nasdaq that closed 3%+ down yesterday - the DOW and S&P have closed respectfully (LOL) in red. Asia has opened and slipped red. In all the probability the recent lows will be tested before the bears decide that they have won or lost. Will my saying Best of Luck help? - well Best of luck all the same - once again.

14 Oct 08: What happened? the cues were in place - the mood was right - then where did we go wrong? a pitiable 28 points up on Nifty! So the markets are not really convinced that we have a rally of any sort at our hands. After all we could have easily continued for some more time to come - a week - a few weeks perhaps - but we decided that enough is enough and that would be all. Fear - yeah that is what is playing in our minds. But I am also convinced that if the rally has to be what we classify as successful then it must not be at a hasty pace and some how - a slow and steady pace will do us more good than what we would have probably done - rising another 200+ points today and then falling in the bear trap day after. All in all - inspite of the Heading I have listed above the day was good and will give us a sure footing in next few days to come.

Asia traded well - the best performer being Nikkei - covering the day it had lost earlier on monday - it closed up 14.15% - creating history Uh!, hang Seng was up 3.19% and Strait Times too was a respectable 2.5% up. Europe is trading in green but has come off the days high that it made during the midsession. FTSE is now at 2.39% in green - graph sloping down, Dax is 3.21% up and Cac is 2.39% up in green. US opened well into the green territory then dipped down viciously - Dow in its intitial trading now just about 1.4% green, nasdaq in red but trying to look up at 0.67% and S&P up 1.18%. A long trading session ahead of US to show us which way we are to go.

Coming to the candlesticks - the pattern seems to be like a Shooting star - the pattern as such is not what I would question but its appearance after the trend does confuse me. It is a fairly strong bearish reversal signal (as if we were in a uptrend) - meaning if it is supported with a black candle that gaps down then our troubles are just beginning - and not ending. There are two things that take out the punch out of the pattern however and so I feel it may not be as potent and wait and watch is all that will tell us if I have read it correctly. Firstly as I said - it has not appeared after a uptrend - second is that the range of the candle (upper wick edge to lower wick edge) should be large as compared to the relative range over the last 10-20 days. The range is not really large when compared to the trading range of last five days. The divergence of the 5 EMA has reduced a bit but a long way still to go. The candle has abandoned the lower edge of the bollinger band. The volumes were a bit better than yesterday. MACD divergence has reduced a wee bit but the red line is still below the blue line. Mass index has eased the rate at which it was looking up and ideally our honeymoon should end as the line goes below the 26.5 point. Slow Stochastic is the only signal that is looking good with the red line above the blue and facing up towards the 50 marker. RSI too is looking good. The TRIX however continues to look down.

Okay - I could not finish the blog earlier and now the DOW is down by 1.35%, Nasdaq down by 3.02 and S&P down by 1.2% -- ready to fall already?


Monday, October 13, 2008

Unfair Trade Practices......

0631 hrs 14 Oct 08: Dow, Nasdaq and S&P up 11%. So we do have another day of a ball. Nikkei trading 11.39% up at the moment. Enjoy!

13 Oct 08:I have to define it as such as the day I was busy with the test - everyone decided to leave me and have a party! This was not unexpected though - every passing day we were going deep down in the oversold territory. Had the global compulsions not been there - this momentum of the fall would have been arrested a long time back - but alas - that was not to be so and we fell and fell and fell... Well the recovery is all well and once again will be supported with the global cues - but the question that will remain now is - will we sustain it? If yes then for how long? If no then when? Okay I will try to deal with all as they come along - see - the bitterness remains - the opinion is almost unanimous - we will visit these levels again and not too far in the future.

As I stare at the yahoo finance home page and press refresh again and again - a good eye soothing green greets me. Nikkei seems to be closed as it only yells the red of its closing past week. Hang Seng was up an unbelievable 10.24% - 1,515 points up. Strait Times was up 6.57%. Perhaps Asia had smelled the bear blood on the streets - Europe too echo the same sentiments with FTSE up 4.59%, Dax 7.4% and Cac at 6.44% in green. They are not really at their peaks but then I feel they will look over the hill for the US to open. There has been eight straight sessions of Dow stumbling down and as a percussor to the opening the Dow futures are now 350 points in green. All in all we can assume a small run up before deciding the direction it has to settle to in the coming term.

Well to the candles now. The body of the white candle is almost of the exact size of the black candle of the black friday (read last week closing Friday). Bollinger Bands are of the same width and hints at the continuation of the trend. The 5EMA still trails well below the Blue line and will take time before it faces up again to take on the blue line. The volumes were nothing great to talk about - lower than that of friday. MACD divergence has reduced a bit and the line are still - red below the blue. mass index line is way above the 27 point - short of the 28 marker. On the Slow Stochastics the red line has crossed over above the blue line and have come out of the oversold zone with the blue line trying to do the same - Slow Stochastic says buy. TRIX is still looking down. RSI has come out of its oversold hiding and looks up.

The talk so many days the the action being taken by all the governments against the recession has seemed to payed in the immediate future - but the sharks lurk around the corner. The talk on the street is that we have just seen the demonstration of financial institutions going down - the news to follow some time later is the industry - production and related going in dumps - it will be fireworks of a life time to see. Don't start waiting for it tomorrow onwards - it may take time.

What helps us is the crude that is below the 81 $ per barrel. The collective will of the world to fight this recession and the results season ahead of us. Just by the way - these are not the times to look at the charts or the fundamentals. The fear playing in everyone's mind is just too much. Close your eyes - pray to GOD, listen to your soul - and flick the coin to take a buy/sell decision. It will work. Pray that all have a ball of a time in this run up.

Best of luck - and Oh! I am a bit free - just 4 more days to go.


Sunday, October 12, 2008


Dear Bloggers,
I will not be able to update regularly next week as I have my examinations and my Night Flying Phase is going on. I will try to update my blog off and on. Please do bear with me - and hope that the markets recover somewhat from the times we are in now.
Ofcourse - also wish me luck that I do not flunk in my examinations.


Thursday, October 9, 2008

Thought I would write after............ I see some green

0300 hrs 10 Oct 08: My dog woke me up and I decided to check the US closing - here is what I found - Dow below 900. Dow closed losing more than 7.33% or 678 points down to close at 8579. Shucks - had my dog not woken me up - I would have slept peacefully for another 3 hours....

09 Oct 08: Well all the talk about the actions of the major economies to do something about the present state of affairs has come and gone - the net effect - a cautious approach to recovery. Cautious - because I am sure that the marketeers are now divided into the following groups. First the ones who have lost so much that they will go to asylum or commit suicide. Second are the ones who will wait for the opportunity to get out at every step the market recovers. Third will be who will create shorts with every bit of the markets going up. A small group of people will still deem it fit to keep investing. Who will benefit out of their strategy? Well no one knows - it is based on perceptions and the end result where we finally land up economically. Do we survive or be the part of the recession the world is fast slipping into.

A long time back I remember a story of a Russian Nuclear Submarine that went under the ocean and never came up. Russians gave up the submarine and the US wanted it badly to study and make their assessments. Well the US recovered it and after they had done what they wanted to do - in a reply to one of the questions - the US representative said - "If you throw enough money and resource at a problem - there is nothing that cannot be done" - Well they have lived by this principle and it has actually worked for a long time. I am sure that they are in trouble but do not write them away - nature has a way to spring surprises. And as seen by the majority of the world this has suddenly become everyone's problem and not of US alone anymore. So - let's see what happens eventually....

The markets after series of rate cuts by everyone did not react the way they were expected - again closing in red. New measures have sprung up and slowly the markets are trying to limp to normalcy. Asia was somewhat bullish after a basically flat opening. Hang Seng and Strait Times ended 3.31% and 3.4% in green respectively. However Nikkei did not support the trend and after trading in green for a long time went red and closed 0.5% down. Europe opened flat with green bias - went up well into green and now - close to the opening is not looking very convincing - whether it can remain green. Some time still to go - and it is trying to take confused cues from US. All the same FTSE is 1.48% up, Dax 1.19% up and Cac is 2.32% up. US opened higher in green and then almost immediately dived down. Dow as of now is 0.06% green - loosing almost 100 points since opening, Nasdaq is 0.54% green and S&P has slipped into red by 0.1%. Anyway - it is too early to tell - there is a long session ahead of US still.

Well another reversal pattern in on our charts - The Hammer. It is actually a textbook Hammer. Only thing that I would have wanted was a white body - but do not take black body of the hammer to be any less forceful signal for a reversal. Okay a error in my interpretation of the Bollinger Bands yesterday. I said that if the Bollinger band is voilated then it is sign of a recovery - well the consensus is that if the Bollinger band is voilated then it is a sign of continuation. Well other than the hammer - the lower band has again been voilated. The volumes we same as of the previous day. MACD divergence has also increased and red line is still way below the Blue line. Mass Index is above the 26.5 - 27 band heading towards 28. Slow Stochastic and RSI are oversold. TRIX is still looking down. So all in all there are now three indicators that are suggesting a reversal up from one a few days back. If the global indications support us then a small rally may be in the offing.

Okay as I close the article the US is slipping with all three indices red now. Best of luck and hope a good day tomorrow.

Nuclear deal is signed. Crude at 88 $ something. Dollar a bit stronger. Tata in Gujarat. All the major economies pledge to fight the present economic crisis incl India. Our growth rate likely to fall to 7% (believe me it is healthy enough). Chandrayaan to moon on 22nd Oct.

Anyone interested in Pivot points - just let me know so that I know to continue with them or not...


Tuesday, October 7, 2008

We almost did it....

07 Oct 08: Well we almost had a ball of a day today. Well there still was trouble and there is this fact that people are jittery and running sh*t scared... But the fact is that we could have actually recovered today and would have ordinarily done better than what we did today. Then why did we not? Well - like in the bull run we did not see over the top of that hill that there was a ravine on the other side - similarly now we fail to see the light at the end of the tunnel. See I agree that the light may be some time away - perhaps a few months or a couple of years away. (Did I overdo it?) But the fact remains that still the situation is not too bad - the situation has all the chances to become bad if our banks join the US way - but mind you we are a different Gene and our generations have coded the Genes to take lower risk than the Europeans and the Americans. We are still conservative in nature and saving in Bank and gold are in our blood. When we get salary we atleast have in the back of our minds to keep something for the rainy days. They are just not like this - their funda is - salary by the week and enjoy by the week end. So we may not fare as bad as they did. If you followed HDFC principle of the growth - when the economy opened - instead of looking outward - they looked even more inside the heart of the country. Today they have turned out to be the best bank - not agressive or growth oriented as ICICI - but the best private sector bank we have.

Okeay to - how the day went by today. Aisa opened red and then climed green. The reason? well Australia cut the interest rate by a percentage point. Imediately a rumour started doing rounds that this is part of a well orchestered plan where all major economies of the world will cut rates. How much truth is there in this will remain to be seen but the markets recovered by bounding to highs. Then they payed a Yo-Yo. Red now - green now. and ended almost flat except for Nikkei that closed 3.03% red. Hang Seng seemed to be closed as the details on the web remained to be yesterday's only. Strait Times closed 0.43% green. Europe followed the same yo-yo but in the opposite sense - opened green went read went green and they are nearing close and are still green. I hope they end somewhere here only. FTSE is at the moment 1.75% green, Dax 0.76% green and Cac 2.23% green. In US the Feds announced a plan to buy massive amounts of short-term debt from the companies with a view to make it easier for the compaines to raise money. This ensured a green opening - going red by US and they are as of now a confused lot. DOw is 0.07% green, Nasdaq 0.16% red and S&P 0.01% green - and since it is not even mid session - it is difficult to say how they will close. Talking about us - well we had BSE closing 0.9% red and NSE closing 0.12% green.

On the nifty candles it is a Doji today... It is a sign of reversal. Especially so after the downtrend we have had for so many day now. Why am I giving so much of significance to this DOji? well firstly if the Doji is formed after a trend in the market then it represents indecision in the market. Secondly it is given even more relevance if it voilates the Bollinger band on the upper or the lower edge. Finally it comes as the RSI has now gone into oversold zone along with Slow Stochastic also going into the same zone. All in all - the buying should ideally kick in soon - even if it remains so for a short time only. The Bollinger band width remains almost the same and the redline still trades well below the blue line. The volumes were better than yesterday, the MACD divergence has increased a wee bit with the red line still below the blue line. Mass Index is still as bad as before. RSI is oversold and if that gives any hopes to someone - cling on. Slow Stochastic red line is below the blue but the red line is also in the oversold zone. TRIX is still showing bearish times ahead of us.

As I finish writing this - the US is now firmly in red - but still around half a percentage point. So wait and watch continues.

A nice quote that I read yesterday:-
"Its Human nature to find patterns where there are none and to find skill where luck is a more likely explanation. (Particularly if you're the lucky one)"

Okay then - the pivots and the related for nifty: -
R3 3927
R2 3820
R1 3713
Pivot 3625
S1 3518
S2 3430
S3 3323

Projected high range 3669 to 3766
Projected low range 3697 to 3600

Fib projected high 3785
Fib projected low 3483

Best of luck and I will try to update tomorrow. Hey and there is an interesting write up below - just incase you missed it.


How to ruin US Economy....

Here is a fantastic article that I saw and though that I should share with everyone. This article is by Ben Stein

1) Have a fiscal policy that creates immense deficits in good times and bad, burdening America's posterity with staggering burdens of repaying the debt.

2) Eliminate regulation of Wall Street and/or fail to enforce the regulations that already exist, instead trusting Wall Street and other money managers and speculators to manage other people's money with few or no regulations and little oversight.

3) Have an energy policy that disallows producing our own energy and instead requires that we buy energy from abroad, thus making our oil prices highly volatile and creating large balance of payments deficits, lowering the value of the dollar and thus making the problem get progressively worse.

4) Have Congress mandate that banks and other financial entities lend money to persons they know in advance to have poor credit ratings or none at all.

5) Allow investment banks, insurers, and banks to bet their entire net worth and then some on the premise that borrowers known to be improvident will in fact repay those loans.

6) Allow the creation of large betting pools called "hedge funds" that can move markets and control the outcome of trading, thus taking a forum for savings and retirement for families and making it into a rigged casino game that exists primarily to fleece suckers like ordinary working men and women.

7) Have laws that protect corporate officers from being sued for misconduct but at the same time punish lawyers in the private sector who ferret out such misconduct and try to make accountable the people responsible for shareholder and investor losses. If one of those lawyers gets particularly aggressive in protecting stockholders, put him in prison.

8) Appoint as head of the United States Treasury Department a man whose whole life was spent on Wall Street, who became fantastically rich through his peddling of junk bonds at his firm while the firm later sold short those same sorts of bonds.

9) Scare Americans into putting up $750 billion of their hard earned money to bail out the billionaires and their friends who created the market for loans to poor credit risks (The "subprime" market) and the unbelievably large side bets on those loans, promising that such a bailout would save the retirement savings of Americans, then allow the immense hedge funds to make the market crater immediately afterwards.

10) Propose to save the situation by surtaxing the oil industry, which is owned by our fellow Americans, mostly in their retirement plans, thus penalizing Americans for investing in companies that efficiently and legally produce an indispensable product.

11) Insist that the free market requires that banks and insurers with friends of the Secretary of the Treasury be saved but allow other entities not so fortunate to fail, thus creating total uncertainty and terror among financial institutions, and demolishing all of the confidence built up in financial circles since the days of FDR.

12) Then have the Republican candidate say he would keep on the job the Treasury Secretary who facilitated the crisis, failed to protect the nation from the crisis, got the taxpayers to pony up to save his Wall Street buddies, and have the Democratic candidate, as noted, say he would save the day by taxing the stockholders of energy companies.

There, that should do it.


Monday, October 6, 2008

Jau kahan bata aei dill? ...........

0740hrs 07th Sep: Well the US closed in red as expected - but in the late afternoon there was a bounce (recovery) that was strong but the losses during the day were so that I could not really wash them out and US still remained well into the red. Dow was 3.58% in red, Nasdaq -4.34% and S&P down 3.85%. Asia had opened very weak but the pulse is showing signs of recovery - however weak it ma seem. Strait Times has already shown a green tick and Nikkei is trying its best to follow.

06Sep 08: Crude below 90 dollars!! Like you and me care about it - so many people are saying it that I just don't want to repeat it - but have too. We are falling - as if you did not know - but if you read my blog a few days back - I had written that if we break the 3800 mark then there is no support till 3600. Now if we fall and break 3600 there is no support till 3200 on nifty - it can turn out to be a long and ugly fall. Thank GOD Almighty that I am not a broker. I might have gone many times under with my attitude to take bold risks. But now the problem is - How do I protect what I have? There is no putting brakes to this trend and with each passing day my portfolio dies anywhere from 5 - 10%. This Diwali we will celebrate Our Diwala. Mind you every evening I stare eagerly at my screen so that iCharts update the days candles and I stargaze. The problem now-a-days is that I still do wait for the charts to be updated with nothing but fear in my heart and eyes.

Well as always before I come to what was there for us on the markets let us see how the others fared. Well Asia opened weak and closed weaker. Hang Seng was down 4.97% and Nikkei down 4.25% Strait Times down 5.61%. Europe opened red and then went to dogs. FTSE down 2.92% (don't get impressed) Dax down 4.92% (worst is yet to come) Cac down 6.11% and mind you the markets have not closed still - so there is a bright chance that they close lower. US has opened weak but not too weak (cannot call 3% down very weak now-a-days - can we?) - however it is looking down. Dow down 2.56%, Nasdaq down 3.31% and S&P 2.97% in red. just for your information - Dow has plunged below 10,000 - the lowest level since 2004. The main reason is that the realisation is setting in that the 700Billion $ that are part of the rescue package does not mean that the flood gates are opened to let the waters to the dying - meaning that there will be a bureaucratic route to gaining access to the cash meant for disbursement. Along with that is the fact that there is a cascading effect of Dominoes that has already been set into motion and Europe is following - Asia might follow.

Still interested in Candles? Let me start by telling you - there is no fundamentals or technical s' that will work in this environment. Buy into others fear they said - and I see everyone running away. Read ahead on your own risk. The candle was a truly long and black one. It has voilated the Bollinger band and the bollinger bands continue widening - so no recovery in sight as far as the Bollinger bands go. The 5 EMA is trailing far below the 20 EMA. Volumes were not too much though - infact a shade lower than average. MACD Divergence Histogram is laughing at us. The red line is below the blue line nad the gap widening like - there is no tomorrow. On the Mass Index we have crossed the critical band - the line has just pierced it through. TRIX is looking down and the last Knight that was fighting the trend - Slow Stochastic has laid down its arms - red line crossing and going below the blue line. The Slow Stochastics place has been taken by the RSI now - that faces down and has gone into the oversold zone. That is the only hope for a small bounce back now. Other than that no hopes what-so-ever left in candles now.

Remember I wrote that if we break 3800 on Nifty then the next support is at 3600? well we are now at 3600 - if we break that ? then all the way to 3200 we have no speed breakers - be careful - but then I am hoping like hell that the 3600 support will hold for some time.

Okay this part I have separated by a huge margin - this is where I am writing what I feel. SO take it with a bucket of salt - we have a recovery around the corner - in all the probability it will be lead by some countries coming together to ward off this recession.

For the more Technically inclined - the Pivots are as under for Nifty: -

R3 4060
R2 3907
R1 3754
Pivot 3668
S1 3515
S2 3429
S3 3276

Projected high range 3711 to 3831
Projected low range 3810 to 3690
Fib Projected High 3885
Fib Projected Low 3516


Saturday, October 4, 2008

Round and round in a circle.....

0740 hrs: Asia opens red and slips deeper at about 3%. Nikkei down 3.49% and Strait Times down 3.01%.

We start week - someone turns green - we end week. The signal is clear - we are in whirlpool sinking deeper and deeper by the minute. I hope there is no one who doubts that the US is fast slipping deep in a recession. Every bit of data that comes by the day reinforces the same. How will we get out of it? well I really do not see that anyone knows inspite of the claims that all is being done to do the damage control. Why are we or the rest of the markets slipping in red by the day then? well because if for any reason the markets rise - the money will promptly flow out of that market. It is just like a charge that flows from high pressure to low pressure. No so called FII would keep positions in such environment. Infact I feel now even if we were to climb up - we would do with a lot of caution. It is just like the dot com burst - it took a lot of time for the investors to return back to the markets. So much so that I am almost sure of what I am saying - the retail that burnt their hands during that period did not come back to the markets at all. Now whenever the recovery will take place it will be at its own pace.

The world markets now. Asia was red as expected - but the sad part was that we fell more and hard. While Nikkei ended 1.94% down, Hang Seng 2.9% down and Strait Times down 2.81%. On the other hand we were 4.05% down on BSE and 3.35% down on Nifty.The reason was perhaps because we were effected greatly by the europe's negative opening. Like I just said the Europe opened negative/flat with some negative bias. However the news that flowed from US gave hope and Europe climed higher to close at - FTSE at 2.26% up, Dax 2.41% green and Cac 2.96% up. That was a wow. The wow unfortunately ened here as US that had opened green - started to turn down after their mid session and finally ended 1.5% red on DOw, 1.48% red on Nasdaq and S&P down 1.35% down. The reason on bloomberg and yahoo were that the bailout - though a law now - the credit will flow again and banks will resume giving loans. There is a chance home prices may stop falling and the worst was over. This was the reason for the market opening green - but the apprehensions again took the front seat and the housing recovery - one of the most important indicator and initiator of coming out of recession was on everybody mind. Will it work? won't it work? So here we complete the circle of life. Questions, questions and more unanswered questions.

Two days back we had a Harami candle that was a mild signal of reversal. Day before we has another white candle and yesterday we were back to the square one - a tall black candle. Where are we now? well with the Bollinger bands maintaining width, and the candles trailing along the lower edge. The 5 EMA is way below the 20 EMA - recovery will take its time now. The volumes as compared to on last white candle were greater. On MACD the divergence has again increased, red line trailing below blue line. Any time the Mass Index now turns down - it can only signal beginning of of a down trend so no hopes here. RSI is way bearish. not even in the oversold territory to give some respite - but pure bearish. TRIX the so called leading indicator too is bearish. It is only Slow Stochastic that has given a buy signal. Take it with a pinch of salt. Any recovery now will be sold into. The news has to be out of world good to give us a sustained recovery - nothing like that seems to be around the corner.

News -- Tata is out of Singur for good - sorry Bengal better luck - next time after ten years after the treatment you gave Tata. You are now officially below Orissa and Bangladesh in development. The Nuclear deal has not been inked but communists should forget it. Their stand has been vindicated and the deal will go through - Communists will suffer by becoming stooges of China and speaking their language. The 700 billion dollars are now coming as saviour to all the banks down in dumps. Will this be enough? let us wait a bit longer. Crude is slipping - US is slipping - a time will come when the US will continue slipping taking crude even lower than this and we will eventually gain from the falling crude. Crude has been one of the factors that has initiated these bad times on the world economy. It will now not rise in coming times - 70-80$ is my guess in near future. Mind you - the US has enough oil with them to see a few decades through. Weaker rupee cannot continue and rupee will start showing strength soon.

Will post the Pivot data tomorrow.


Thursday, October 2, 2008

Eid Mubarrak....

0830hrs: As was expected - Asia opened and is trading red. As of now Nikkei down 1.4%, Hang Seng Down 2% and Strait Times down 1.4%. There may be a small chance that the markets recover to the flat line by the time we open. Crude down to 93$ a barrel.

0600hrs 03 Oct 08: So the US has ended on an average 4% down. The party seems to be over for good for US. The moot question that remains is - how long are we going to take the cues from US and keep dropping? As of now Asia has not opened - not that anything positive is expected out of markets here - but all the same....

02 Oct 08: WOW what a day I had. A true day off in middle of a week. Infact it is not a bad idea to have a holiday in middle of a week. Its rejuvenating - to say the least. As if there were not enough reasons for the markets to fall - the Global markets are once again down in dumps - and they are ready to pounce upon us the moment we open. The reasons? ... Unemployment data and the factory reports, no that is not end of it - couple this with jobless claims in US that are on a seven year high. The general feeling there - I believe is that the financial rescue plan may not be good enough to ward off a recession.

AP reported that "investors appeared to be pulling more money out of the market and settling in for a prolonged economic winter. The main concern is that the $700 billion bailout plan won't be enough to stimulate growth, and the latest economic reports delivered on Tuesday demonstrate that the economy continues to struggle.
The government said the number of people seeking unemployment benefits rose last week and that demand at the nation's factories has fallen by the largest amount in nearly two years. The market is interpreting the Commerce Department report on factories as a sign that tight credit conditions are hitting manufacturers."

Even with the above the Asia was in a hangover perhaps and still not privy to this news. So only Nikkei was down 1.88% but both Hang Seng and strait times were up 1.08 and 0.20% respectively. Well this is where the good news ends. FTSE opened flat - climbed well into green but by mid session it was way down in red and finally ended 1.8% red. Dax and Cac followed exactly the same pattern and ending 2.51% and 2.25% in red respectively. US meanwhile opened along the flat line - in red but almost immediately started falling and presently around the mid session. Dow is 2.4% red, Nasdaq down 2.9% and S&P 500 both down 2.9 and 2.8% in red.

On the candles - harami did work its magic for all its worth. For the first day after a fairly long time the Bollinger bands constricted a little bit. The candle also left the bottom to end above the lower band line - moving away from it. The only problem was that this small white candle was what can be classified as a spinning top. I feel that a small explanation of the "Spinning top" is called for. Firstly, Spinning top candles have small real bodies, and they portray a stock or index plagued by uncertainty. The spinning top has small upper and lower shadows. Secondly, Spinning top candles portray situations where the market is having difficulty coming to a consensus on a security's value. They are indicative of a market in which uncertainty and indecision prevail. Neither the buyers nor the sellers have a clear sense of which direction the market will head. The forces of supply and demand are equally balanced. In the spinning top candle, the shadows are relatively small and the candle has a very small range. When combined with low volume, traders may be expressing disinterest in a particular security. And lastly, As the old cliche goes -- "when in doubt, stay out." The spinning top candle expresses doubt and confusion on the part of the market. Until the situation becomes clear, traders should emphasize careful stock selection and minimize position size.

The MACD divergence remains exactly the same as before and so does the red line that remains below the blue line. Mass Index is almost perfectly poised not to give a mid term bearish pattern. TRIX is looking down showing negativity. RSI too is negative. It is only Slow Stochastic that is giving a ray of hope and giving a buy signal. Trust it at your own peril.

Now some other good news. Crude down 94.65$ and weaker rupee. Well the weaker rupee is the good part for the exports and crude would be good for our economic engine in general. See the crude is going down on the pretext that the US in recession will lower the demand for power - so we are in middle of nowhere where on thing leads to another and not necessarily in the dame sequence.

I am waiting for the opening of Asian markets to open and will try to update tomorrow morning.

For the technically inclined.


R3 4139
R2 4076
R1 4013
Pivot 3937
S1 3874
S2 3798
S3 3735

Projected High range 3975 to 4045
Projected Low range 3955 to 3886

Fib Projected high 4038
Fib Projected low 3823