Please take note, I am neither a bull nor a bear, am just like a portion of the tail of a comet. I just follow the trend. The trend and my stop loss are my only friends.

SEE THE EXTENT OF THE DAMAGE CAUSED SO FAR AND HOW MUCH PROBABLY MORE TO GO IN THE GRAPH PROVIDED DOWN BELOW REGARDING THE BEAR MARKET CORRECTIONS ON 27.9.08.

This section is for Day / Swing / Momentum Traders only.

This message posted at - 6:00 PM, 17.11.08.

NIFTY AS ON 17.11.08 WAS 2799 SPOT.

The nifty levels for 18th November 2008 are as follows all being spot levels.

support1 = 2740
support2 = 2680
support3 = 2625
On upside, resistance1 = 2860
resistance2 = 2900

As expected, Nifty broke 2740 today and touched low of 2694. Now this is not a good sign and just shows weakness on the back of relentless bad news coming out of various parts of the world. However, there were rumors during trading hours that the fed has reduced its lending rates by 30 basis points. Added to that, there are now high hopes that our own RBI too would be reducing the various rates soon, hence, first we sulked and sank for much of the day due to nothing coming out of G 20 and then rallied back on the basis of short covering expecting the rate cuts.
On the charts, the candle is giving bullish indications as the slow stochs also enters oversold zones. It is known as a bullish dragonfly doji pattern. Hence, do not short blindly. The fact that we recovered nicely at the end of day is bad news for the bears indeed, but also we must not forget that much depends on the global cues too. If again, we get very bad global cues in the morning, there are full chances of going down to todays lows once again. Open interest of nifty shall be updated later.
On 17th, FII's nett sold 521 crores, while the DII's also sold and were nett sellers to the tune of 178 crores. Seems like FII's are again in a hurry to get out of India and the DII's are also chickening out now.

Stop losses for long positions should be kept a little below supports and stop losses for short positions should be kept a little above resistance levels.

PS: Short term predictions come with fair amount of risk and this is just a guidance without any commitment.

WEEKLY REPORTS : -

MARKETS OVERLOOKING GOOD NEWS
15.11.08 NIFTY AT 2810

The trade that was :-
On the 12th, I had warned that the charts patterns of the nifty was looking exactly like the one before the huge oct 24th fall and if 2740 is broken, then mayhem would prevail. On the 12th night, Dow ended deep in the red and thanks to Gurunanakji, our markets were saved from bloodshed on the 13th. However, on 13th night, The dow again ended high up in the green which nuetralized its negative effect and we also did not fall much. However, we went into trade with a very positive piece of information that our inflation had finally fallen into single digits to 8.98 % which is nearly two percent lower than its previous week. Hence, the gap up was expected alongwith good overnight global cues. But what happened ? It did not sustain for even fifteen minutes and slided down again and the reason being the FII's and DII's used the gap up to exit from their stocks as FII's sold heavily (811 crores) into the rise. This just shows total lack of conviction on the part of the bulls and Domestic investors. This good news alongwith high hopes from the G 20 meet over the weekend could not even sustain the markets for a day. It was very sad indeed. It just shows that now lower levels once again is imminent. The nifty got hammered quite a bit during the day and even touched 2778, very close to dangerous support of 2740 as given earlier.

The trade ahead : -
On the charts we are sitting on near to very important and delicate supports of 2740 which if broken can show us 2625 in minutes. Such would be the magnitude of the shorting then. The bears have become totally fearless and in the Live forums where I stay and trade along, day traders do not get tensed when the nifty rises, they instead talk of averaging without stop losses. This shows their conviction of seeing lower levels for sure. The way Reliance is sinking once again like in october, things dont look so rosy once again. Added to that, friday night again saw the dow end deep in the red to the extent of minus 338 points. Hence, a small gap down near 2740 can be expected on monday as we are not very far from it as it is at 2810. Hence, all those holding long positions, please be aware that a break of 2740 will take us down to 2625 and then much much lower to test the previous lows of 2250 once again within the coming days. Call writting has happened at 3200 and 3000 levels too.
The eurozone has officially declared itelf into a Recession and there are reports of massive job cuts all over the west. Pakistan has cancelled the License of Foreign currency dealers in a bid to stop the flight of foreign currency from its country. These are not signs to be bullish about ofcourse. My research is showing that the october exports of India are going to be very badly hurt which will be projected in figures around december. Hence, do not think this malaise is going to go away in a month or so. The full effect of the global slowdown will hit India without doubt and it will be reflected in its numbers in 2009. Hence, one can safely assume, the resumption of the bull run is still far far away.
The G 20 meet in Washington has still not come out with anything concrete as of yet and the final outcome of the meet is expected later tonight. However, it appears, they are just endorsing the steps that are already being taken by various governments and what the markets are actually expecting in the form of a huge stimulus package still seems a little far away. There are difference of opinions between the various leaders and for them to come to a consensus will take some time as they look forward to rather interacting with President elect Obama in January. So the darkness still looms ahead for some more time I guess. Howevever, if something big and positive is declared before monday morning, then the downside can be nuetralized.

WELOME TO THE WORLD OF CONFUSED TRADING
8.11.08 NIFTY AT 2973
With bad global cues overnight before fridays trade, who would have thought that we would end in the green by close although most indicators on the charts were bearish. Thats why its necessary to be prepared for both ways movements during trading as no one knows when the trend will change. The dow had already factored in the bad jobless data coming out on friday and sank well on wednesday and thursday and ended nicely in the green on friday. I would say, welcome to the world of confusing trading.
It is indeed becoming difficult to keep overnight positions as although the cues point towards an expected movement the next day, it only surprises and moves the other way, the next day. Added to that, the ratio of volatility is also getting worse. Very difficult to trade for those who are not nimble and quick witted.
There are rumours doing the rounds following the huge rate cut by the Bank of England, the fed too might further reduce its rates lower from 1 % thus paving the way towards 0 % about which I have written long time back. This just shows the immensity of the problem and poor Obama sure has his hands full in coming to office and immediately having to deal with this colossal problem that his country is facing at present. The world is happy to see George bush go and are hoping that Obama will bring some radical changes that will prop up the markets too. But believe me, this bear market is not going anywhere hugely high, what with bad news increasing day by day. Hence, there is no need to hurry to pick up stocks and there is full possibility of seeing earlier lows once again. However, the movements in our markets are going to be quite impressive and erratic too,hence trade cautiously.


RELIEF AT LAST - WILL NIFTY SEE 3600 AGAIN THIS YEAR ?
1.11.08 NIFTY AT 2885

The Reserve Bank of India, or RBI, has cut the repo rate by 50 bps to 7.5% with effect November 3.

It has also cut CRR, or cash reserve ratio, by 100 bps in two stages to 5.5%. The first stage of CRR cut would be with effect October 25 and the second stage would come into effect November 8. The 100 bps CRR cut will infuse Rs 40,000 crore into the system, it said.

The central bank will also cut SLR to 24% from November 8 onwards. It has allowed refinance to banks up to 1% of NDTL, or net demand and time liabilities, for 90 days.

Now we know why there was a huge surge upwards in the sensex during the last half an hour of trading on friday. The big players in the markets must have gotten the news of this rate cut and must have covered their shorts in a hurry and gone long in their positions. This is another proof that the markets move in advance to events that are supposed to come up in due course of time. Added to that the dow has also ended in the green, hence, we may expect a decent gap up on Monday thus once again trapping the bears on the wrong foot. The begining of last week had trapped the bulls and now its the turn of the bears to take a beating. Hence, I would suggest not to keep overnight positions as developements are happening too fast and the huge movements in the nifty can result in a big erosion on ones capital if one is not careful. If only the RBI had acted more responsibely last week itself and had made these same cuts on time before monday morning trade last week, we would never have seen 2252 and also there would not have been so much panic which has now scared the small investors to no end. The world over, governments are doing so much to inject liquidity and help support the system before some more problem arises, but here in India, the RBI took more than a week to take a decision like this at such a crucial time when our stock markets were getting battered to no extent. It indeed is sad. Now, on monday the 3rd, we can expect the bank stocks to rally once again.
Elsewhere, As dozens of countries slip deeper into financial distress, a new threat may be gathering force within the American economy — the prospect that goods will pile up waiting for buyers and prices will fall, suffocating fresh investment and worsening joblessness for months or even years. The word for this is deflation, or declining prices, a term that gives economists chills. Deflation accompanied the Depression of the 1930s. Persistently falling prices also were at the heart of Japan’s so-called lost decade after the catastrophic collapse of its real estate bubble at the end of the 1980s — a period in which some experts now find parallels to the American predicament.
I may be sounding overtly too bearish at a time when domestic and world markets are on an upward journey and many must be thinking, the worst is over and now there is only one way to go and that is up. Surely, one must play along with the trend and take profits in the process, but do not forget the overall global picture. It must be kept at the back of ones mind. There is widespread massive reduction in demand for consumer products all over the world and this surely is not a sign of recovery. This bear market is yet to see time correction and consolidation after the price correction which is also necessary for a healthy follow up to the next bull run.
Now another fresh question is bogging the minds of many investors who had bought at 3000 and below levels. Should we hold on to our stuff for long term or get out in profits in this rally and live to get the same stuff much much cheaper sometime in future. After all, we have seen briefly what can happen to the prices of these blue chips - haven't we ? We may go up to 3600 too. Now this decision has to be taken on a personal level by each individuals risk taking capacity. On a personal level, when I look at the charts, I notice that the nifty always comes down back to the lows after a bounce back. It happened at 4448, 3848 and 3200. So, do we again retest 2252 to see if it really is the final bottom? Or has the final bottom been put at place for a long time to come ? It indeed is ironical that the most popular thread on MMB for many months - will nifty see 3600 has now become a huge resistance on the way up.


NIFTY AT 2584 (OH MY GOD)
25.10.08

THE SURGERY OF NIFTY.
DIWALA OF THE SMALL INVESTOR AT DIWALI. (Very disheartening indeed)

The fall of nifty on friday, oct 24th was the mother of all falls witnessed ever in our markets. It was total mayhem with nifty sinking every minute with heavy volumes. Once, my final support given at 2870 broke, there was no looking back. Yes, nifty fell way beyond even my wildest imagination. It has made a low of 2525. We have now corrected exactly 60 % from our peaks of january 2008 which obviously is the worst correction in the past 25 years. This just shows that sometimes emotions overtake technicals in overshooting given targets. With the RBI not cutting CRR or SLR, it only made matters worse. Added to that the Dow futures was trading at minus 550, the maximum permissible limit for a futures to go down. Hence, everybody expected a Lower circuit on the dow on friday. However, it did not happen and they ended only 312 points or 3.59 % down after recovering nearly 200 points from the days lows. However, we overreacted and fell more than 12 %.
Now, over the weekend,our Finance Minister and RBI will be under immense pressure from the powers that be at the stock markets to undertake some rectification measures which if not done before market opening on monday could result in further fall. However, I am expecting a reduction in SLR to the tune of 50 basis points which should result in a short covering rally at least in the banking stocks. However, this rally will be used by those stuck up at higher positions to exit once again near their costs.
On the charts, nifty looks extremely oversold. It is even more oversold than in january 2008, because there was not much recovery till the end. Added to that there was heavy volumes indicating massive shorts buildup. Any positive announcents by the RBI or somewhere else in the world could result in a huge short covering rally too as expiry is only three days away now. But for now, the upside is limited till 2865 maximum. The nifty open interest for october series has fallen by 7.88 % which is normal and for the november series, it has gone up hugely by 28.34 % indicating massive shorts. Those still surviving the massacre can play according to the nifty levels given above. The weak hearted better stay out of trading as volatility will be too high. However, do not miss to pick up reliance in three digits. Take care and All the best.

27.9.08
CORRECTIONS IN A BEAR MARKET

TOP - BOTTOM - PEAK - BOTTOM - Value - FALL - Period of
YEAR - YEAR - VALUE - VALUE - Of Fall - %AGE - correction

APR 1992 - APR 1993 - 1281 - 600 - 681 - 53% 12 Months
FEB 2000 - SEP 2001 - 1818 - 850 - 968 - 53% - 20 Months
JAN 2008 - So Far - 6357 - 2252 - 4105 - 64.5% - 10 Months

Target of 53 % correction of nifty at 2984 achieved on 23.10.08
Only god knows where the bottom is. In the worsest of case scenario's, nifty can fall maximum to 1800, but dont count on it too much.

As per my exhaustive research of past bear markets, I have noticed one very important aspect which throws great light on the possible bottoms of bear markets. The time, the fed's interest rates come down to 1 %, it could definately be a possible bottom. Most past bear markets have shown this trend. At present, the fed's interest rates are 1.5 %, we have another half a percent to go. Plan out your Long term portfolio accordingly. This is a very big secret I have revealed to my followers today. I hope this information will be of use to you. Now that the fed has brought down the rates to 1 %, I will not be surprised if it even comes down to 0 %, because this bear market is different indeed.

Hello friends,
Some of my online friends have requested me to update my homepage with nifty levels. I will be doing the same after downloading EOD charts everyday and will be giving two support and two resistance levels as for the next day to be traded. Please remember Nifty can go either way on any given day and one should be prepared to trade it as per the trend of the day. I should not be held responsible for anything going wrong as global cues and market internals can take the nifty anywhere inpite of the charts giving contrarian views. I may be proved wrong many times and I would not like to face any flak or reply to any after effects of niftys abrupt moves if it goes against the chart levels. Please remember, charts provide just a channel where the nifty might move and so many factors can change its path anytime. I am against stubborn views on the markets and one should be prepared to see both sides movements of the markets on any given trading day.

Well, I never like to blow my own trumpet, but this is just for inquisitive people. I am just a day trader who only trades in futures lots and a little bit of option trading. I also do momentum trading and mostly swing trading. I never like to trade in delivery stocks coz the investment is greater and also the brokerage is higher, but sometimes I do it when stocks are available at mouth watering prices. Also, in delivery, shorting is a big issue and one tends to get stuck up to trade only in one direction. However, in futures, with less money and bigger leverage at my disposal, I manage to trade in lots much easily. There are better chances in trading in futures as one can trade both up and down directions of the markets to ones advantage. I have started trading since april 2007 only, and in a matter of months made and lost a lot of money too. However, I am a fighter and will not rest until I return victorious from this episode, hence, I am delving deeper and deeper into this chasm of the markets. And mind you, its getting more and more interesting too.
For all new comers to the markets, my message to you is that it is easy to make money in the markets as there is no physical labor involved, however, the mental stress can turn out to be your worst enemy. Hence, you need a strong will and loss sustaining power to fight it out here, otherwise,it can be tough to turn out a winner. You should not run away after loosing money. Mantain a strict regimen for trading and play within your limits with strict stop losses and you may make good money here. So all the best to you all. Happy trading.
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