April 30, 2020

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 3.2% in positive at 9860
- AD was 3:2

- swing low 9000
- option writing support 9500

- today was monthly expiry
- while close was 3.2% positive, OI was down 24%
- don't know what to make of this

- breakout above upper trendline of rising wedge
- resistance 10000 to 10300

April 29, 2020

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 1.8% in positive at 9553
- AD was 11:7

- markets trading within rising wedge
- nifty touched 9600 (upper trendline of wedge) but failed to sustain there
- this is visible on intraday charts
- last part/ ending part of wedge is very difficult to trade

- today nifty gave a buy signal on kplswing indicator
- the sell was given on 1-FEB at 11662
- rough SL was 9000
- and now buy today signal at 9553
- most likely this signal will fail
- min SL is current nifty minus twice 14 day ATR i.e. 9550-2*340 approx 8900
- 10 bar low is at 8800
- we can safely assume SL at 9000 ... roughly 6% which is actually very decent

April 28, 2020

INDUSIND BANK results: expectation versus reality

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 1% in positive at 9280
- AD was 2:1

- VIX down 8%... now at 35

- markets so far trading within rising wedge

- fall from 9500 to 7500 took 8 days
- reverse has taken almost 22 days
- slower pace of rally means this would be a corrective rally

DJI – Ghost of the Great Depression

There are a few similarities that we can identify by looking at the weekly charts of DJI today and DJI on the edge of 1930s:

• First of all, there is a period of doubt where price volatility increases (red zone on the chart), which is then followed by the last push of the price to record the high point of the entire period.
• Secondly, a very sharp drop of asset price (49% in 1929 and 38% in 2020) which by itself signals that the prevailing trend is under threat.
• At last, just before the general consensus that the economy entered a recession, we see a strong retracement from the drop . In both cases, the price retraced back by a half or even a little more.

The pattern is repeating itself...


Read more at https://www.tradingview.com/chart/DJI/LMyftmBB-DJI-Ghost-of-the-Great-Depression/

April 27, 2020

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 1.4% in positive at 9282
- AD was 2:1

- rising wedge activity seen
- lower trendline to offer support

- intraday: after 10 am, markets were flat

April 25, 2020

ATR Trailing Stoploss AFL

This is a very simple AFL which plots the SL for a long or short position 3 ATR stops away from close of the currently selected bar.

While the AFL does not define entry, you can consider SL hit as trend reversal and initiate reverse trade.

NOTE:
- ATR stands for Average True Range.... google for more info
- ATR is displayed for currently selected bar (i.e. it is not trailing)
- for a long position, the SL should only move up only when a new high is made and vice versa
- you can use this to define position sizing
- ATR is based on close and default 14 days (or bars).
- ATR stop is set at 3... using 2 will give faster exit at cost of more whipsaws
- you can use this on 5 min, 15 min or daily, weekly charts etc
- this AFL is for Amibroker... ignore it if you don't have/ know Amiboker

AFL Code:

NIFTY weekly charts

- trend is down
- today was 3rd week of higher high higher low
- this week nifty closed 1.2% in negative
- 2nd week of hanging man
- close below 8900 to lead to correction

BANKNIFTY technicals

- trend is down
- resistance 22000
- triangle formation seen
- lower trendline acting as support
- break of 19400 can lead to retest of 16000

April 24, 2020

Futile exercise to talk about earnings

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 1.7% in negative at 9154
- AD was 1:2 (good sign)

- nifty continues to trade in rising wedge
- the wedge/ triangle is nearing end
- break of lower trendline will lead to more downsides

- it is expected that 8000 and eventually 7500 will break
- time... I don't know



3 min charts:
- short trade not be considered as candle was a doji
- all  other signals are valid
- half signals will fail so a 5 bar swing should be decent SL




The road ahead

Nice example on how crude got negative

Imagine the following...you pay $500 today and commit to receiving a prostitute at your house in 15 days. Cos your wife is traveling. This is called a futures contract. 

Unfortunately, lockdown came and your wife will be home for the next 60 days. 

You do not want this woman to show up at your house at all and try to pass this futures contract to someone else.

Only you cannot sell this commitment because nobody can receive the prostitute at home anymore. Everyone is in full storage (their balls) with wife.

To make matters worse, not even the pimp (Chicago Mercantile exchange) has more room to receive girls because his house is crowded with girls.

So you will pay anyone just to take the girl off your hands.

Do you now understand why oil has a negative price when the contract is delivered?

Why get up at 4.30 am

Image

Nice thread - the lockdown no longer makes any sense



April 23, 2020

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 1.4% in positive at 9314
- AD was 2:1

- VIX down 8% at 39

- rising wedge pattern maintained nicely

Some signals today

ACC
ACC chart

April 22, 2020

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 2.3% in positive at 9187
- AD was 5:4 (not good)

- VIX down 5% to 43
- falling VIX hints at lower volatility? less fear?

- note all activity happening within range of rising wedge

April 21, 2020

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 3% in negative at 8981
- AD was 5:13

- note nifty did not breakout from rising wedge
- this severely limits upsides

- I will consider trend reversal on close below 8800

BANKNIFTY triangle breakout is no longer valid

- trend is still down
- swing high of 22000 was never crossed

Crude: this is what happens if you cannot take delivery

A simple explanation on how crude became negative

Crude oil futures trade at negative price for first time


And Jim Rogers gets proven wrong

April 20, 2020

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed flat at 9262
- AD was 11:7

- wedge pattern working well so far
- limited upsides seen

- option writing support 9000 resistance 9500-10000

April 19, 2020

BANKNIFTY hourly chart

- breakout above 21000
- support 20000


NSE net Advance Decline line

- look for divergence for first sign of topping out

NIFTY PE ratio chart

- recent low was 17.5
- once results come, PE will increase (due to lower EPS)
- best PE range to buy 12-15

- bear market is not over

CNX 500 chart (weekly)

- trend is down
- quite some time before correction ends


NIFTY weekly charts

- 2nd week of higher high higher low
- rally possible to 9500-10000


BANKNIFTY triangle breakout?

- trend is down on daily charts
- close above 22000 will indicate trend reversal

- possible triangle breakout
- rally possible till 26000-28000
- will pattern fail?

- before above levels, there is very strong resistance at 24000
- here there are 2 swing lows of 2018 (double bottom)

- any rally will be a pullback rally

- hanging man formed on Friday

April 17, 2020

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 3% in positive at 9267
- AD was 7:2

- hanging man pattern formed

- VIX dropped 8% to 42

- triangle / wedge pattern still valid
- swing low 8000

- ATR (14) drops to 450

Markets care a damn about you

April 16, 2020

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.8% in positive at 8993
- AD was 13:5

- VIX down 8% at 46

- note market movement within triangle/ wedge
- directionless trading may continue for some more time

- option writing support 8500 (monthly expiry)
- resistance 9000, 9500

April 15, 2020

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.8% in negative at 8925
- AD was 2:1 (bullish)

- note there was a gap up opening
- but nifty encountered resistance near upper trendline and sold off
- I expect this selloff at higher levels to continue

- stiff resistance around 10000 levels
- swing low 8000

- this is a bear market rally or technical pullback

April 13, 2020

Market outlook

Daily charts:
- trend is up
- toady nifty closed 1.3% in negative at 8994
- AD was flat

- swing low around 8000

- markets closed tomorrow

Banks stare at losses as taxi drivers go home

John Conway, inventor of "Game of Life", Dies From Coronavirus

John Horton Conway  was an English mathematician active in the theory of finite groups, knot theory, number theory, combinatorial game theory and coding theory. He also made contributions to many branches of recreational mathematics, most notably the invention of the cellular automaton called the Game of Life.

The Game of Life is a zero-player game, meaning that its evolution is determined by its initial state, requiring no further input. 

One interacts with the Game of Life by creating an initial configuration and observing how it evolves. It is Turing complete and can simulate a universal constructor or any other Turing machine.

Read more at https://en.wikipedia.org/wiki/Conway%27s_Game_of_Life

The universe of the Game of Life is an infinite, two-dimensional orthogonal grid of square cells, each of which is in one of two possible states, alive or dead, (or populated and unpopulated, respectively).

Every cell interacts with its eight neighbours, which are the cells that are horizontally, vertically, or diagonally adjacent. These rules, which compare the behavior of the automaton to real life, can be condensed into the following:


  • Any live cell with two or three live neighbors survives.
  • Any dead cell with three live neighbors becomes a live cell.
  • All other live cells die in the next generation. Similarly, all other dead cells stay dead.


The initial pattern constitutes the seed of the system. The first generation is created by applying the above rules simultaneously to every cell in the seed; births and deaths occur simultaneously, and the discrete moment at which this happens is sometimes called a tick. Each generation is a pure function of the preceding one. The rules continue to be applied repeatedly to create further generations.

The game is interesting because you can start with an extremely simple rule, give it some time (say million years) and see an amazing variety of interactions coming out... this also leads to the conclusion you do not an intelligent being (say God) to create life.


April 12, 2020

People's Bank of China buys 1% in HDFC in this correction



Source: https://www.hdfc.com/sites/default/files/2020-04/Reg31_ShareHoldingPattern_31032020%20WEBSITE.pdf



The US will emerge stronger



Wuhan: watching a city emerging from a lockdown

April 11, 2020

We are actually doing this for your own good... seriously

April 10, 2020

NIFTY weekly charts

- trend is down
- this week nifty gained 13%
- this was also the first higher high higher low bar formation
- 2-3 such bars are common in any correction

- 10000, which was a very good support, should be tested again as a resistance
- I don't know if this will happen

- note index has not closed below 8000 on closing basis
- this is also the first weekly close above 9000 after 3-4 weeks

BANKNIFTY technicals

- trend is down
- index has broken swing low of 2018 and 2019
- index is also below 2015 and 2016 swing high (20400)

- current swing high 22000
- support 16000

April 9, 2020

Market outlook

Daily charts:
- buy signal today on nifty as index closed above recent swing high at 9000
- today nifty closed 4.2% in positive at 9112
- AD was 5:1

- VIX down 5% at 50%

- note this is first buy signal after break of 12000
- it is common (very common) for first buy signal to fail
- swing low is around 8000

- close is positive considering 3 day weekend
- but this correction has usually given Monday as a red day
- let's see

- note ATR is around 500
- so SL for any trade should be 1000 points at least
- swing low around 8000 meets this condition

- decided not to trade today due to connectivity / terminal / liquidity issues

April 8, 2020

Market oulook

Daily charts:
- trend is down on daily charts
- today nifty closed 0.5% in negative at 8749
- AD was 2:1

- nifty crossed 9000 and 9100 but was unable to sustain
- formation was a doji with a long upper shadow

- I have drawn 2 sloping lines/ triangle showing possible movement
- while this is not a pattern, if this is obeyed, we can have more downsides if lower trendline breaks

April 7, 2020

This buying the dip euphoria won't last. This is probably, the overzealous investing crowd rushing in just because there's a dip

Bear markets correction and recovery time

Why put options premium did not fall much inspite of big jump in nifty and drop in VIX

Market outlook

Daily charts:
- trend is down on daily charts
- today nifty opened gapup and closed 9% in positive at 8793
- AD was 5:1

- VIX down 6%

- note Friday was a down day and
- nifty opened gapup above prev day high
- this is normally a bullish sign
- except that fast rallies are common in bear markets

- swing high 9000
- 14 day ATR is 506

- this is a short week with 3 trading days



April 4, 2020

BANKNIFTy charts

- trend is down
- swing high around 22000 and 26000
- next support 14000... visible on monthly charts

- 14 day ATR is around 1500

NIFTY weekly charts

- trend is down
- this week, nifty failed to trade above last week's blue bar
- so we now have resistance around 9000 and
- support around 7500
- below 7500, next support is 6400 +/- 200 points

- this week, VIX dropped and
- AD improved
- this means selling may subside or bears are not comfortable with new trades

- so far a relief rally / retest of 10000 has not happened
- don't know if and when it will happen

2008 and 2020 corrections compared

Image

Source: twitter

Is this the end of HINDUNILVR?

April 3, 2020

Market outlook

Daily charts:
- trend is down on daily charts
- today nifty closed 2% in negative at 8084
- AD was 5:4

- past 2 days, AD is bullish even as markets are closing in the red
- VIX down 8% today at 55

- lack of liquidity in options is proving to be problem in trades
- as of now it is still a seller's market

Markets have not yet bottomed out

April 1, 2020

Market outlook

Daily charts:
- trend is down on daily charts
- today markets closed 4% in negative at 8254

- VIX dropped 6%
- AD was 9:8
- both are positive signs

- swing high 9000
- deep support 7500-6400