Offline
| Post a Message | Explore Forums | Browse Stock Messages | Hot Discussions | Top rated Messages | Top Boarders | |
|
|
|
Market Strategy - Short Term
Tracked by: 0 Boarder
for Cybergamer
The education is the best long term investment, even ahead of property. It always pays off. so if you have to chance to become a MBA graduate, just accept it and go ahead. The present crisis may stay for about 2-3 years but will wither away by the time you are freshman from MBA. You wil have few competitors then.
Kalidas, Hong Kong
12-10-2008...
In reply to:
Kalidas’ Practical Rule for Stocks, Bonds, and Indices
Posted by :
Cybergamer
Hi Sir
I have been following your suggestions and really appreciate your selfless service to fellow boarders.
This is out of the way and I want a suggestion from you...I am a S/w engineer and have an exceptional interest in finance...and In fact i am almost prepared for Gmat.
Do you think that I should go for MBA at this point of time?..(especially taking finance as a major later on)
Please guide..
Ramandeep Singh
ramandeep.arora@ in. com
Tracked by: 0 Boarder
The Sensex ended 1,998 points lower at 10,528; Nifty dropped 538 points to 3,281; Ranbaxy was the only Sensex scrip to end the week positive.....
...
Tracked by: 0 Boarder
The International Monetary Fund has said that the country`s economy will continue to perform well......
Hi Sir
I have been following your suggestions and really appreciate your selfless service to fellow boarders.
This is out of the way and I want a suggestion from you...I am a S/w engineer and have an exceptional interest in finance...and In fact i am almost prepared for Gmat.
Do you think that I should go for MBA at this point of time?..(especially taking finance as a major later on)
Please guide..
Ramandeep Singh
ramandeep.arora@ in. com
...
In reply to:
Kalidas’ Practical Rule for Stocks, Bonds, and Indices
Posted by :
Kalidas
Dear Boarders,
I had casually mentioned once, but it would be interest to many Investors if they carefully follow my practical rule that was tested by me for over 21 years.
For INDICES – 200:800 rule and 30:70 rule
Once I mentioned in this forum that indices usually follow the repeat pattern of 200:800. That is index movement usually moves as under:
Example:
7800 – 8200 – 8800 – 9200 – 9800 – 10,200 – 10,800 – 11,200 – 11,800 – 12200 – 12,800 – 13,200 – 13800 – 14,200 – 14,800 – 15,200 – 15,800 – 16,200 – 16,800 – 17,200 – 17,800 – 18,200 – 18,800 etc.
This applies to all indices in the world. Look at SENSEX and also DOW recently. Dow was always jumping up from 11,200 to 11,800 and once went to 12,200. When it fell from 11,200, it dropped to previous level 10,800 (-400) and then to 10,200 (-600), then to 9,800 (-400) and then again 9,200 (-600)
Because this is Text only format, I can not make table which is easy to read and follow. In my website I will post this article fully re-written with tables.
In India too, the same pattern was followed, so also in Hong Kong and Japan.
How to read this Kalidas Rule?
If the index is rising say from 9200, it will go to 9800 in rising trend. If it is a falling trend, then it will go down to 8800. Right now, the Dow is trading at 9200 level and following downward trend, so it will go down to 8800 first, then if not stabilizes, to 8200. If it breaks 8000, then hell will break loose. Whenever, the magic figures of 8000 (or multiple or division by 10 that is, 8,80,800, 8000 etc), it will drop by 40% to go to 5000 or multiple/division by 10 level ,that is 8 will go down to 5, 80 to 50, 800 to 500, 8000 to 5000 etc. It reverses in same fashion.
30:70 SUB-RULE FOR INDICES
This is particularly useful to Traders of indices. The index rises above critical level by 30 (to 8230 for 8200; 8830 for 8800, 9230 for 9200 etc. similarly when it falls, deduct 30 points way down for support level. For instance if it is falling 8200 will test to 8170, 8800 will test 8770, 9200 will test 9170 etc.
For example, you find the Sensex falling below 11,800. It will test the support of 11,770. If it does not hold, it will go down all the way to 11,200 (with one minor stop at 11400) where it will first test the level of 11230. If it does not hold, it will be forced down to 11170 in less than few minutes. If it does not hold the support at 11170, then it will go down to less than 11000 to all the way down to 10,800 (halting at 10,830 or 835 and then testing the support at 10,770. If the daily fall is more, then after hitting say, 10,770 it will recover to over 11200 by testing upper resistance of 11,230/235 level. This is what happened on SENSEX a few days ago.
You can work out the exact point easily using Excel spreadsheet by inputting the formula properly.
Example: in rising trend
Index rising from say, 10,100 – it will go to 10,170 where it will test the downward support level, if it holds above 10,170 and in rising trend (because it has already advanced from 10100), it will test the level of 10,230/235 level, where it will consolidate for longer time. If it passes this hurdle, then it will rise very fast and may rise to 10,400 level (if it can pass 10,370 level fast) and may in fact test 10,430/435 level and then retrace for correction, but will not fall below 10,370 if the trend is strong, news is positive and other Asian markets are firm, with UK also opening stronger.
The above rules are not absolute but they usually hold well in more than 80% to 90% cases. So if the index is in downtrend, and it is at 10,230, then sell short if the trend is downward, and within minutes it will test the support of 10,170 when you can buy back, making 60 points in less than a minute.
Use it as Demo exercise first, If it suits you it is fine, but do not come back like Kalidas, you told us 2400 rally in 7 days and it lost 2400 points without reading my entire post with preconditions. This is a practical rule from experience. Try it at your risk.
Kalidas, Hong Kong
9-10-2008
Tracked by: 0 Boarder
G7 outlines broad but vague plan to combat crisis
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) -- Treasury Secretary Henry Paulson laid out more details of his radical plans to buy equity in banks Friday, while the Group of Seven finance ministers and central bank governors urged members to take whatever steps are necessary to restore market confidence.
After their closed-door meeting, the G7 set out a broad "plan of action" to stabilize global financial markets, in a one-page plan that was sweeping in scope but short on specifics.
In a press conference, Paulson gave some new details of the emerging plans by the federal government to inject capital directly into a "broad array" of financial firms.
Paulson said that officials are working on a "standardized program that is open to a broad array of financial institutions."
The plan is to attract private capital to complement the government`s funds, he said.
Paulson went out of his way to say existing shareholders would be protected, and that the government would only make the purchases through a "broadly available equity program" without any voting power, "except with the market standard terms to protect our rights as investors."
The G7 said that "urgent and exceptional action" is needed. The financial and monetary leaders vowed to use all available tools to support systemically important financial institutions and prevent them from failing.
Also on the G7 to-do list were unfreezing credit and money markets, ensuring banks can raise capital from the private sector, ensuring that deposit insurance regimes were robust, and repairing secondary mortgage markets where appropriate.
The actions should be taken in ways that would protect taxpayers and avoid damaging other countries.
Interest rate policy should be used "as necessary and appropriate," the G7 plan said.
It is unclear whether the plan will go far enough to satisfy financial markets, which are suffering from a profound loss of confidence.
At first blush, analysts were not too impressed.
Robert Brusca, chief economist at FAO Economics, called the statement "fluff - good fluff but fluff."
Vincent Reinhart, a former top staffer at the Federal Reserve Board, said markets had no interest in pledges but wanted to know exactly what the G7 would do before trading resumes next Monday.
Reinhart said the financial markets are moving quickly, which makes the gears of international economic policymakers move more slowly.
Economists have said they want the G7 to agree on measures including sweeping guarantees of bank deposits and interbank lending, as well as direct injections of taxpayer money to recapitalize ailing banks.
"They have to deliver the goods because the markets are just not going to stabilize unless they do," said Brian Hilliard, head of economic research at Societe Generale. "And the goods are government guarantees of deposits."
Ken Rogoff, a Harvard University professor and former chief economist at the International Monetary Fund, said Friday there needed to be an "overwhelming" G7 statement.
"I think the worst thing to do would be to come out with a very tepid response," he said. "It would be the end of the G7.
"This is really the mother of all financial crises since WORLD WAR II, and if the G7 leaders can`t ... get it together and come out with a very effective statement, it is going to be a sad day indeed."
With global equity markets plunging, the odds of coordinated action "are increasing by the hour," Hilliard said. "The gravity of the situation is just obvious to everybody."
...
Tracked by: 0 Boarder
ICICI Bank declines 20%; market breadth was extremely bearish - out of over 2,615 scrips traded, over 2,185 declined...
Tracked by: 0 Boarder
Hieeeee to all of u after a short time today i came again to message u all Remember,,, me whn the very 1st day of my message i posted which was on 8th sept when market was bounced 550 points & nifty made a high of 4550 from that day i hd recommended to sell nifty at every level at every bounce back & strongly mentioned no need to stop loss , title of my messages was SELL AT EVERY BOUNCE BACK, NIFTY WILL HIT 3200,1CAN SHORT NIFTY CONFIDENTLY, So friends today i hv achieved my 2nd target which was 3200 u can see today low of nifty spot. i was expecting that nifty will take a support @3200 which has taken today, but i m feeling very regret to say that again market is not comfortable on liquidity side, govt. is trying their level best to support market but sadly nothing is in their hand they r helpless, bcz today 150 BPS cut on CRR, instead of 50Bps earlier that means total 200 bps now can we expect the DRAWBACK of this step it will be beyond our expectations it will directly hit INFLATION, that means for coming month 14 negative point of INFLATION side is already prepared...........We saw IIP data today , so Financial side of Indian economy has gone nothing is left, it seems that there is MAJOR Negative news from Banking side is on the card. so be careful............................
...
Tracked by: 1 Boarder
i don`t think i am ready for this downcycle.. ithas cme as a suprise.. ...
In reply to:
Are you ready for this downcycle?
Posted by : sambala
The five phases of stock market cycles and where we are now
AS a result of the recent financial crisis in companies like Fannie Mae and Freddie Mac, Lehman Brothers as well as AIG, investors have been wondering whether there will be more companies affected by this crisis.
George Soros, in his book published in the early 2008 titled The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means, said that “ .... the current crisis is not merely the bursting of the housing bubble. It is bigger than the periodic financial crises we have experienced in our lifetime.”
According to him, we should expect the current situation to get worse before it can get better.
Hence, investors need to prepare themselves for this downturn. Even though nobody will know exactly when the market will recover again, we must be ready when the market moves.
In order to do that, we need to understand stock market cycles and where we are now.
Stock market cycles can be divided into five phases — expansion, settlement, contraction, crisis and recovery.
During expansion, the overall stock market sentiment will be bullish with higher stock market volume and prices.
In every market rally, there is always a main theme. For example, the bull market in 2007 was mainly attributed to positive sentiment in the plantation sector.
During this period, we should buy stocks in the sectors that benefit from the rally. If your portfolio owned a lot of plantation stocks last year, you would benefit from the overall market rally last year. Hence, we should pick stocks that follow the market theme.
Then it will enter into settlement for some profit-taking activities. If the overall market sentiment remains bullish, it will resume its uptrend.
The bullish trend will reach a period where reality can no longer sustain the exaggerated expectations. Then the market will enter into contraction where long-term investors get very uncomfortable with the market situation.
In this period, we should sell poor fundamental stocks as well as stocks in sectors which will be seriously affected in a downtrending market.
There are still some short-term traders who may enter the market at this stage as they believe it may rebound later.
However, when the market drops further, it will enter into crisis where long-term investors as well as short-term traders are selling stocks.
Our market is currently in this phase where long-term investors as well as short-term traders are not willing to commit themselves. This is given the unsettling of the US financial crisis in companies like Lehman Brothers and AIG.
Despite the US government’s plan to rescue banks, not many analysts or fund managers are convinced that we have seen the worst.
Soros applied the theory of reflexivity to explain the current crisis.
According to him, the market participants’ misjudgements and misconceptions affect the stock market prices.
He said that later, these biased perceptions would affect both prices and the fundamentals that those prices are supposed to reflect.
When a market drops in prices, it creates fear. As a result of this fear factor, prices will drop further and later cause panic selling as the fundamentals will also be affected by lower prices. Then it will turn the investors’ perception into reality.
Soros called this a two-way reflexivity connection between perception and reality, which can give rise to initially self-reinforcing but later self-defeating.
Hence, in every stock market cycle, regardless of any stock market, while it may take a long time to reach its peak, when it drops, the drop will accelerate and be followed by panic selling.
At present, most investors will be eager to know when our market will enter into the recovery phase where the market will start to recover. It will be a mammoth job to predict the market bottom.
Nevertheless, we should consider buying some stocks whenever the market experiences panic selling like the recent global market crash on the fallout of Lehman Brothers and AIG.
According to Lauren C. Templeton and Scott Phillips in their book on Investing the Templeton Way, investors need to buy stocks whenever the market experiences panic selling.
They that we should take advantage of problems that are exaggerated in the minds of sellers because of the sellers’ near-term focus.
Even though they agree that buying into crisis may affect your portfolio performance, you will gain in the long term.
However, you need to make sure that you have enough cash to average down your purchases.
byThestaronline
Tracked by: 0 Boarder
Sure if the leftists get more seats the sensex and the Nifty will get killed but the issue here is about how quickly they may bounce back. ...
In reply to:
3600 Nifty seems to be the temporary bottom
Posted by :
stocks4us
The issue here is one of losing faith in the markets. If that has happened than anything can happen. The sensex can go below levels of 9000. The Nifty can even break the major support of 2800. It seems unlikely but elections next year could be the trigger to kill this market should the leftists and Mayawati get more seats. Anything can happen.
Tracked by: 0 Boarder
The issue here is one of losing faith in the markets. If that has happened than anything can happen. The sensex can go below levels of 9000. The Nifty can even break the major support of 2800. It seems unlikely but elections next year could be the trigger to kill this market should the leftists and Mayawati get more seats. Anything can happen. ...
In reply to:
3600 Nifty seems to be the temporary bottom
Posted by : luckystocks
It seems that 3300 is a MAJOR SUPPORT for the Nifty. Of course due to terrible global events no levels are sacrosanct but if one wants to invest for the medium to long term this is a terrific level to invest. Traders too can come in but have a quick stop loss. There is always the possibility of the sensex going as low as 8800 to 9000. The nifty touching levels of 2800. However, should that happen the markets should bounce back quickly to current levels. Yes, there is always the risk of further losing capital and the markets going down AND STAYING DOWN. But if one wants to make money one has to take some risk. Otherwise just put your money in the bank and relax.
Tracked by: 0 Boarder
Get Ready for CRAZY movements of the Market now...
Tracked by: 0 Boarder
It seems that 3300 is a MAJOR SUPPORT for the Nifty. Of course due to terrible global events no levels are sacrosanct but if one wants to invest for the medium to long term this is a terrific level to invest. Traders too can come in but have a quick stop loss. There is always the possibility of the sensex going as low as 8800 to 9000. The nifty touching levels of 2800. However, should that happen the markets should bounce back quickly to current levels. Yes, there is always the risk of further losing capital and the markets going down AND STAYING DOWN. But if one wants to make money one has to take some risk. Otherwise just put your money in the bank and relax....
In reply to:
3600 Nifty seems to be the temporary bottom
Posted by : stocks4us
It does seem that you could be right. However, even though one can make short term gains at this level one must know when to exit. When would that be according to you.
Tracked by: 1 Boarder
The five phases of stock market cycles and where we are now
AS a result of the recent financial crisis in companies like Fannie Mae and Freddie Mac, Lehman Brothers as well as AIG, investors have been wondering whether there will be more companies affected by this crisis.
George Soros, in his book published in the early 2008 titled The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means, said that “ .... the current crisis is not merely the bursting of the housing bubble. It is bigger than the periodic financial crises we have experienced in our lifetime.”
According to him, we should expect the current situation to get worse before it can get better.
Hence, investors need to prepare themselves for this downturn. Even though nobody will know exactly when the market will recover again, we must be ready when the market moves.
In order to do that, we need to understand stock market cycles and where we are now.
Stock market cycles can be divided into five phases — expansion, settlement, contraction, crisis and recovery.
During expansion, the overall stock market sentiment will be bullish with higher stock market volume and prices.
In every market rally, there is always a main theme. For example, the bull market in 2007 was mainly attributed to positive sentiment in the plantation sector.
During this period, we should buy stocks in the sectors that benefit from the rally. If your portfolio owned a lot of plantation stocks last year, you would benefit from the overall market rally last year. Hence, we should pick stocks that follow the market theme.
Then it will enter into settlement for some profit-taking activities. If the overall market sentiment remains bullish, it will resume its uptrend.
The bullish trend will reach a period where reality can no longer sustain the exaggerated expectations. Then the market will enter into contraction where long-term investors get very uncomfortable with the market situation.
In this period, we should sell poor fundamental stocks as well as stocks in sectors which will be seriously affected in a downtrending market.
There are still some short-term traders who may enter the market at this stage as they believe it may rebound later.
However, when the market drops further, it will enter into crisis where long-term investors as well as short-term traders are selling stocks.
Our market is currently in this phase where long-term investors as well as short-term traders are not willing to commit themselves. This is given the unsettling of the US financial crisis in companies like Lehman Brothers and AIG.
Despite the US government’s plan to rescue banks, not many analysts or fund managers are convinced that we have seen the worst.
Soros applied the theory of reflexivity to explain the current crisis.
According to him, the market participants’ misjudgements and misconceptions affect the stock market prices.
He said that later, these biased perceptions would affect both prices and the fundamentals that those prices are supposed to reflect.
When a market drops in prices, it creates fear. As a result of this fear factor, prices will drop further and later cause panic selling as the fundamentals will also be affected by lower prices. Then it will turn the investors’ perception into reality.
Soros called this a two-way reflexivity connection between perception and reality, which can give rise to initially self-reinforcing but later self-defeating.
Hence, in every stock market cycle, regardless of any stock market, while it may take a long time to reach its peak, when it drops, the drop will accelerate and be followed by panic selling.
At present, most investors will be eager to know when our market will enter into the recovery phase where the market will start to recover. It will be a mammoth job to predict the market bottom.
Nevertheless, we should consider buying some stocks whenever the market experiences panic selling like the recent global market crash on the fallout of Lehman Brothers and AIG.
According to Lauren C. Templeton and Scott Phillips in their book on Investing the Templeton Way, investors need to buy stocks whenever the market experiences panic selling.
They that we should take advantage of problems that are exaggerated in the minds of sellers because of the sellers’ near-term focus.
Even though they agree that buying into crisis may affect your portfolio performance, you will gain in the long term.
However, you need to make sure that you have enough cash to average down your purchases.
byThestaronline
...
Tracked by: 0 Boarder
Dear Boarders,
I had casually mentioned once, but it would be interest to many Investors if they carefully follow my practical rule that was tested by me for over 21 years.
For INDICES – 200:800 rule and 30:70 rule
Once I mentioned in this forum that indices usually follow the repeat pattern of 200:800. That is index movement usually moves as under:
Example:
7800 – 8200 – 8800 – 9200 – 9800 – 10,200 – 10,800 – 11,200 – 11,800 – 12200 – 12,800 – 13,200 – 13800 – 14,200 – 14,800 – 15,200 – 15,800 – 16,200 – 16,800 – 17,200 – 17,800 – 18,200 – 18,800 etc.
This applies to all indices in the world. Look at SENSEX and also DOW recently. Dow was always jumping up from 11,200 to 11,800 and once went to 12,200. When it fell from 11,200, it dropped to previous level 10,800 (-400) and then to 10,200 (-600), then to 9,800 (-400) and then again 9,200 (-600)
Because this is Text only format, I can not make table which is easy to read and follow. In my website I will post this article fully re-written with tables.
In India too, the same pattern was followed, so also in Hong Kong and Japan.
How to read this Kalidas Rule?
If the index is rising say from 9200, it will go to 9800 in rising trend. If it is a falling trend, then it will go down to 8800. Right now, the Dow is trading at 9200 level and following downward trend, so it will go down to 8800 first, then if not stabilizes, to 8200. If it breaks 8000, then hell will break loose. Whenever, the magic figures of 8000 (or multiple or division by 10 that is, 8,80,800, 8000 etc), it will drop by 40% to go to 5000 or multiple/division by 10 level ,that is 8 will go down to 5, 80 to 50, 800 to 500, 8000 to 5000 etc. It reverses in same fashion.
30:70 SUB-RULE FOR INDICES
This is particularly useful to Traders of indices. The index rises above critical level by 30 (to 8230 for 8200; 8830 for 8800, 9230 for 9200 etc. similarly when it falls, deduct 30 points way down for support level. For instance if it is falling 8200 will test to 8170, 8800 will test 8770, 9200 will test 9170 etc.
For example, you find the Sensex falling below 11,800. It will test the support of 11,770. If it does not hold, it will go down all the way to 11,200 (with one minor stop at 11400) where it will first test the level of 11230. If it does not hold, it will be forced down to 11170 in less than few minutes. If it does not hold the support at 11170, then it will go down to less than 11000 to all the way down to 10,800 (halting at 10,830 or 835 and then testing the support at 10,770. If the daily fall is more, then after hitting say, 10,770 it will recover to over 11200 by testing upper resistance of 11,230/235 level. This is what happened on SENSEX a few days ago.
You can work out the exact point easily using Excel spreadsheet by inputting the formula properly.
Example: in rising trend
Index rising from say, 10,100 – it will go to 10,170 where it will test the downward support level, if it holds above 10,170 and in rising trend (because it has already advanced from 10100), it will test the level of 10,230/235 level, where it will consolidate for longer time. If it passes this hurdle, then it will rise very fast and may rise to 10,400 level (if it can pass 10,370 level fast) and may in fact test 10,430/435 level and then retrace for correction, but will not fall below 10,370 if the trend is strong, news is positive and other Asian markets are firm, with UK also opening stronger.
The above rules are not absolute but they usually hold well in more than 80% to 90% cases. So if the index is in downtrend, and it is at 10,230, then sell short if the trend is downward, and within minutes it will test the support of 10,170 when you can buy back, making 60 points in less than a minute.
Use it as Demo exercise first, If it suits you it is fine, but do not come back like Kalidas, you told us 2400 rally in 7 days and it lost 2400 points without reading my entire post with preconditions. This is a practical rule from experience. Try it at your risk.
Kalidas, Hong Kong
9-10-2008
...
Tracked by: 0 Boarder
NEW YORK: Stocks rose more than 1% on Thursday as a stronger-than-expected profit from technology bellwether IBM suggested that the credit crunch is not stifling all business spending.
The Dow Jones industrial average was up 133.25 points, or 1.44%, at 9,391.35. The Standard & Poor`s 500 Index was up 13.58 points, or 1.38%, at 998.52. The Nasdaq Composite Index was up 32.22 points, or 1.85%, at 1,772.55.
...
