tag:blogger.com,1999:blog-81962062137605180912024-02-21T21:30:16.706+05:30Technically SpeakingTarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.comBlogger219125tag:blogger.com,1999:blog-8196206213760518091.post-30654298161847834782015-05-30T22:35:00.001+05:302015-05-30T22:35:46.220+05:30Nifty : Make or Break coming soon<div dir="ltr" style="text-align: left;" trbidi="on">
As per last blog we got a bounce from 8000 (7997 to be exact). Nifty almost reached 8500 but has lost momentum in the resistance zone of 8450-8600. As per the new chart we see new resistance zone developing around 8500-8600 yet again and until 8600 is crossed the chances of this rally to fail exists. Support exists around 8000 and 7700 on the downside.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJEqWF1GlJZteB_lKngATW1ww92AZ2yqWpo1rVgWkFH43giL4aEMI8ypSzpfcG4iQFZ7BSyXfPTG2nMBpIn6ebAp27BADYLvp3TKvjZswsRLANGf-6Lb6VG6v3y2tSwyU2xa3eMfY3Aqo/s1600/nift.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJEqWF1GlJZteB_lKngATW1ww92AZ2yqWpo1rVgWkFH43giL4aEMI8ypSzpfcG4iQFZ7BSyXfPTG2nMBpIn6ebAp27BADYLvp3TKvjZswsRLANGf-6Lb6VG6v3y2tSwyU2xa3eMfY3Aqo/s400/nift.jpg" width="393" /></a></div>
<br />
<br />
In my opinion we should definitely test 8000 again and in most likelihood even test 7700 if 8000 psychological level is breached. But before we do that we should get one sell candle in the region of 8500-8600, as we have got in almost all the last four swing highs recently! Another reason I believe Nifty would test 8000 and below is the fact that we are yet to see a strong positive divergence on the MACD and RSI oscillators.<br />
<br />
<br /></div>
Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-83688282172614274112015-05-03T23:21:00.000+05:302015-05-03T23:21:15.848+05:30Nifty : Dead Cat Bounce Ahead?<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuDhca98q6vAXE_mwPIwsYTnPATCgQIp6ZXZwu7cEupjnmuokQA2yJzMyoEjt0x-C2NBZkNls5ZouCyxkWScCl9SFwDy_bqj8btCfi2DGnE3na-lNLDTwWl6IOWwLpu_Wp0Uq5GX7s1KI/s1600/Untitled.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhuDhca98q6vAXE_mwPIwsYTnPATCgQIp6ZXZwu7cEupjnmuokQA2yJzMyoEjt0x-C2NBZkNls5ZouCyxkWScCl9SFwDy_bqj8btCfi2DGnE3na-lNLDTwWl6IOWwLpu_Wp0Uq5GX7s1KI/s1600/Untitled.jpg" height="340" width="400" /></a></div>
<br />
While looking at the daily charts after a really long time, apart from a clear Head and Shoulder pattern what you can easily see is strong resistance in the 8500-8600 region while support can be expected around 8000.<br />
<br />
I also see some divergence in the oscillators and would be reasonable to expect some rally after such a strong selling. The fact that long term trend is still intact, I expect the current correction to be of zig-zag type. So either the correction has almost ended (which I doubt) or there is at least another leg down; which can only start after a leg up from current level. So after a 1000 point correction, an upward correction of 38% to 50% is expected. Interestingly a 400-500 point does coincide with the Resistance!<br />
<br /></div>
Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-37527808645174947932013-04-10T15:44:00.001+05:302013-04-10T15:44:31.025+05:30Balenthiran, The 17.6 Year Stock Market Cycle<div dir="ltr" style="text-align: left;" trbidi="on">
<table border="0" cellpadding="0" cellspacing="0" class=" selectedEntry" id="977bf89f98a9fe5c_main" style="-webkit-box-shadow: none; background-color: white; border: 0px; box-shadow: none; font-family: sans-serif; margin: 0px; padding: 0px; position: relative; width: 888px; z-index: 503;"><tbody>
<tr><td class="entryHolder" id="977bf89f98a9fe5c_entryHolder" style="cursor: auto;" valign="top"><div class="frameActionsTop" data-uninlineentryid="977bf89f98a9fe5c" style="-webkit-transition: opacity 1.5s; color: #605f40; cursor: pointer; font-size: 10px; height: 33px; line-height: 33px; margin-top: -33px; overflow: hidden; text-align: center; text-transform: uppercase;" title="close this article and return to the list">
<br /></div>
<div class="u100Entry itemscope" data-selectentryid="977bf89f98a9fe5c" itemtype="http://schema.org/Article" style="border: 0px; margin: 0px; min-height: 280px; padding-top: 0px;">
<div class="entryHeader" style="background-color: transparent; border: 0px; margin: 0px; padding: 0px;">
<a cdf_container="10" class="title read" href="http://readingthemarkets.blogspot.com/2013/04/balenthiran-176-year-stock-market-cycle.html" id="977bf89f98a9fe5c_entry_title" style="color: #111111; display: block; font-family: HelveticaNeue-condensed, sans-serif; font-size: 28px; line-height: 33px; margin-bottom: 28px; margin-top: 0px; text-decoration: initial; text-rendering: optimizelegibility;" target="_blank">Balenthiran, The 17.6 Year Stock Market Cycle</a><div class="topWikiWidget wikiWidget" data-entryid="977bf89f98a9fe5c" data-ref="forms_top" style="border-bottom-color: rgb(236, 236, 234); border-bottom-style: solid; border-bottom-width: 1px; margin-bottom: 20px; padding-bottom: 20px;">
<div style="height: 20px;">
<div class="viewerIcon highlightableIcon" data-buryentryid="977bf89f98a9fe5c" style="-webkit-background-size: cover; background-image: url(http://s3.feedly.com/production/14.0/images/ab-trash.png); background-position: 50% 50%; background-size: cover; color: #111111; cursor: pointer; display: inline-block; float: right; font-size: 12px; height: 20px; line-height: 20px; margin-left: 7px; opacity: 0.36; overflow: hidden; text-align: center; width: 20px;" title="remove this article from this list">
</div>
<div style="text-align: right;">
<span style="background-color: transparent;">Book Review by Brenda Jubin</span></div>
</div>
</div>
</div>
<div cdf_m_top="1" class="entryBody" id="977bf89f98a9fe5c_entryBody" style="color: #494949; font-size: 14px; line-height: 1.7; margin-bottom: 0px; margin-top: 17px;" title="">
<div cdf_container="3" class="content" id="977bf89f98a9fe5c_entryContent" itemprop="description">
The profile of a bull market cycle resembles an Elliott Wave sequence, although Balenthiran notes that, in contrast to Elliott Waves, his cycle “has distinct phases of fixed time and direction” and “is not trying to determine by how much the stock market may increase or decrease in that time.” (p. 30) Nonetheless, his bull market cycle has an initial leg up lasting four to five years, a sharp correction lasting one to two years, another rally lasting four to five years, a mild mid-cycle correction, and finally a major bull market top. In his stylized version, the rough 4-5 and 1-2 figures get turned into more exact numbers: 4.4 and 2.2 years.<br /><br />The bear market cycle is more complex. It starts with a bear market crash lasting approximately two years, is followed by a rally lasting four to five years, a second bear market crash lasting around two years (often, he claims, the lowest low), a two-year bear market rally, a major bear market low (not necessarily the lowest low), a final bear market low, and finally the end of the bear market cycle.<br /><br />So, what can we expect? The current bear market should end in 2018, with the final low coming this year. This low is “not likely to be lower than that seen in 2009, but ideally below the 2011 high.” (p. 57) This may be a good entry point for the new bull market even though it comes five years before the start of the next long-cycle bull market.<br /><br />Perhaps this is what all the money sitting on the sidelines is waiting for</div>
</div>
</div>
</td></tr>
</tbody></table>
</div>
Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com1tag:blogger.com,1999:blog-8196206213760518091.post-16381196349976520292012-11-12T01:34:00.001+05:302012-11-12T01:34:05.885+05:30The Eight Scariest Charts For Equity Bulls : From Zero Hedge<br />
<h2 class="entry-title" style="background-color: white; color: #1155cc; font-family: arial, sans-serif; font-size: 18.66666603088379px; margin: 0px; max-width: 650px;"><a class="entry-title-link" href="http://www.zerohedge.com/news/2012-11-08/eight-scariest-charts-equity-bulls" style="color: #1155cc; text-decoration: initial;" target="_blank">The Eight Scariest Charts For Equity Bulls<div class="entry-title-go-to" style="background-image: url(http://www.google.com/reader/ui/3904077461-entry-action-icons.png); background-position: 0% -413px; background-repeat: no-repeat no-repeat; display: inline; height: 17px; margin: 0px 0px 0px 2px; opacity: 0.4; padding-left: 16px;"></div></a><span class="entry-icons-placeholder" style="display: inline-block;"></span></h2><div class="entry-author" style="background-color: white; color: #666666; font-family: arial, sans-serif; font-size: 13.333333015441895px; margin: 0px;"><span class="entry-author-parent">by <span class="entry-author-name">Tyler Durden</span></span></div><div class="entry-debug" style="background-color: white; font-family: arial, sans-serif; font-size: 13.333333015441895px; margin: 0px;"></div><div class="entry-annotations" style="background-color: white; font-family: arial, sans-serif; font-size: 13.333333015441895px; margin: 0px;"></div><div class="entry-body" style="background-color: white; font-family: arial, sans-serif; font-size: 13.333333015441895px; margin: 0px; max-width: 650px; padding-top: 0.5em;"><div style="margin: 0px;"><div class="item-body" style="margin: 0px;"><div style="margin: 0px;">It would appear Mark Twain's infamous quote that <strong>"history does not repeat, but it does rhyme" </strong>has never been so apt. The following eight charts suggest the rhythm is getting louder and louder. How is it possible? It's nonsense? Well at the heart of the markets, it is still us humans and our endearing greed, fear, and heuristic biases that drive the flows... trade accordingly.<br />
<br />
The current price action in the S&P 500 is eerily similar to the movement leading up to the collapse in 1987... <em>(via Bloomberg)</em><br />
<a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic.png" style="color: #1155cc;" target="_blank"><img height="264" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic_0.png" style="border: 0px;" width="500" /></a><br />
<br />
The Dow is also tracking this move almost perfectly over the last two years...<em>(via Citi)</em><br />
<a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic1.png" style="color: #1155cc;" target="_blank"><img height="510" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic1_0.png" style="border: 0px;" width="500" /></a><br />
<br />
The next three charts are particularly concerning...<br />
Here is the Dow leading up to the 1987 drop - showing its distance from the 55-week average and the collapse once it crossed... <em>(via Citi)</em><br />
<a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic2.png" style="color: #1155cc;" target="_blank"><img height="491" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic2_0.png" style="border: 0px;" width="500" /></a><br />
<br />
here is an unnamed stock's price action (percentage change) over the past three years...<em>(via Citi)</em><br />
<a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic3.png" style="color: #1155cc;" target="_blank"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic3_0.png" style="border: 0px;" /></a><br />
<br />
and AAPL's price appreciation from the lows in 2009 and its 55-week average...<em>(via Bloomberg)</em><br />
<a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic3_1.png" style="color: #1155cc;" target="_blank"><img height="264" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic3_1_0.png" style="border: 0px;" width="500" /></a><br />
<br />
It's not just 1987... Here is the Dow analog again the 1977-78 period and 1905-1910 period... <em>(via Citi)</em><br />
<a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic5.png" style="color: #1155cc;" target="_blank"><img height="584" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic5_0.png" style="border: 0px;" width="500" /></a><br />
<br />
and the Dow Transports are playing out a very similar pattern to the 1960s-70s... <em>(via Citi)</em><br />
<a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic4.png" style="color: #1155cc;" target="_blank"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic4_0.png" style="border: 0px;" /></a><br />
<br />
And a <strong>Bonus Chart - for those who prefer to look at Bond Analogs...</strong> Here is the current move in 10Y US Treasury yields overlaid on 1992's movement... spooky no? and somewhat fits with a view of weakness into year-end, downgrade on debt-ceiling and collapse... <em>(via Citi)</em><br />
<a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic6.png" style="color: #1155cc;" target="_blank"><img height="445" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/11/20121108_panic6_0.png" style="border: 0px;" width="500" /></a><br />
<br />
Machiavelli accounts for this 'repetitive' oscillation by arguing that <strong>virtù (valor and political effectiveness) produces peace, peace brings idleness (ozio), idleness disorder, and disorder rovina (ruin). In turn, from rovina springs order, from order virtù, and from this, glory and good fortune</strong>.<br />
Machiavelli, as had the ancient Greek historian Thucydides, saw human nature as remarkably stable - steady enough for the formulation of rules of political behavior. Machiavelli wrote in his Discorsi:<br />
<blockquote><div style="margin: 0px;"><div style="margin: 0px;"></div></div><div style="margin: 0px;"><div style="margin: 0px;"></div></div>Whoever considers the past and the present will readily observe that all cities and <strong>all peoples... ever have been animated by the same desires and the same passions</strong>; so that it is easy, <strong>by diligent study of the past, to foresee what is likely to happen in the future in any republic</strong>, and to apply those remedies that were used by the ancients, or not finding any that were employed by them, to devise new ones from the similarity of events.</blockquote><br />
<em>“Everything that needs to be said has already been said. But since no one was listening, everything must be said again.” — André Gide</em><br />
<em>Charts: Citi and Bloomberg (as marked above for clarification - not all charts are sourced from Tom Fitzpatrick of Citi)</em></div></div></div></div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-30796328458359948692012-09-16T18:09:00.003+05:302012-09-16T18:09:43.216+05:30Book Review : The Value Investors: Lessons from the World’s Top Fund Managers<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<h2 class="entry-title" style="background-color: white; color: #1155cc; font-family: arial, sans-serif; font-size: 18.66666603088379px; margin: 0px; max-width: 650px;">
<a class="entry-title-link" href="http://readingthemarkets.blogspot.com/2012/09/chan-value-investors.html" style="color: #1155cc; text-decoration: none;" target="_blank">Chan, The Value Investors<div class="entry-title-go-to" style="background-image: url(http://www.google.com/reader/ui/3904077461-entry-action-icons.png); background-position: 0% -413px; background-repeat: no-repeat no-repeat; display: inline; height: 17px; margin: 0px 0px 0px 2px; opacity: 0.4; padding-left: 16px;">
</div>
</a><span class="entry-icons-placeholder" style="display: inline-block;"></span></h2>
<div class="entry-author" style="background-color: white; color: #666666; font-family: arial, sans-serif; font-size: 13.333333015441895px; margin: 0px;">
<span class="entry-author-parent">by <span class="entry-author-name">Brenda Jubin</span></span></div>
<div class="entry-debug" style="background-color: white; font-family: arial, sans-serif; font-size: 13.333333015441895px; margin: 0px;">
</div>
<div class="entry-annotations" style="background-color: white; font-family: arial, sans-serif; font-size: 13.333333015441895px; margin: 0px;">
</div>
<div class="entry-body" style="background-color: white; font-family: arial, sans-serif; font-size: 13.333333015441895px; margin: 0px; max-width: 650px; padding-top: 0.5em;">
<div style="margin: 0px;">
<div class="item-body" style="margin: 0px;">
<div style="margin: 0px;">
Ronald W. Chan introduces an interesting cast of characters, many of whom may not be familiar to readers. In <i>The Value Investors: Lessons from the World’s Top Fund Managers</i> (Wiley, 2012) we meet Walter Schloss, Irving Kahn, Thomas Kahn, William Browne, Jean-Marie Eveillard, Francisco García Paramés, Anthony Nutt, Mark Mobius, Teng Ngiek Lian, Shuhei Abe, V-Nee Yeh, and Cheah Cheng Hye.<br /><br />Irving Kahn, age 106, has the distinction of being the oldest living active investment professional. Both he and Walter Schloss, who died this year at the age of 95, were students and later employees of Benjamin Graham, so they have impressive value investing pedigrees. Their first jobs were with Wall Street firms; eventually they founded their own highly successful businesses.<br /><br />I mention the job history of these two men because I was struck by how relatively late in life (of course, not by Kahn standards) many of the value fund managers interviewed in this book found their true calling. Mark Mobius, for instance, of the Templeton Emerging Markets Group fame, started his career as a business consultant (to be more precise, a consulting research coordinator) in Tokyo, studying consumer behavior in the region, and later founded his own research-oriented business consulting firm. Cheah Cheng Hye, co-founder of Value Partners, the largest asset management company in Asia, worked in journalism for eighteen years before he entered the financial world as a stock analyst.<br /><br />Other future value fund managers started off in finance but faced a different kind of hurdle. They were hired by firms who were devoted to growth investing. They felt uncomfortable in their jobs, though not necessarily understanding why. It took them some time to realize that they were, for whatever psychological/intellectual reasons, at heart and in mind value investors.<br /><br />Value investing is in many ways an intellectual no-brainer. It’s smart bargain shopping. You buy a lot of pasta at 50% off because the supermarket messed up its inventory but avoid the strawberries that are on sale because they’re half rotten. Simple enough. On the other hand, value investing is extraordinarily difficult emotionally. You buy a stock that you think is undervalued only to see it become even more undervalued (and that’s if your analysis is correct). You may buy more if you’re self-confident, but you have no external validation. The market is telling you that you got it wrong. And, yes, the market is often right.<br /><br />The value investors that Chan profiles, all of whom have handily beat their benchmarks, are not a particularly stressed lot. In fact, many of them explain what investing techniques they use (in some cases merely diversification) to be able to sleep soundly at night and avoid stress. I suspect, however, that the real explanation lies not so much in methodology as in personality. It takes a special kind of person to take the inevitable lumps (such as not participating in the dot-com boom) as well as to enjoy the long-term, often slow-grind upside of being a talented value investor.<br /><br />Chan’s book is a good read. Value investors may make some new international friends. Struggling individual investors may find a style that resonates. And frustrated, antsy twenty somethings may come to realize that life doesn’t end at thirty.</div>
</div>
</div>
</div>
</div>
Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-59293538369907633282012-02-11T13:43:00.003+05:302012-02-11T13:43:52.052+05:30Nifty Breadth Update<div dir="ltr" style="text-align: left;" trbidi="on">
After a long overdue bounce turning into a bull market, Nifty is showing signs of exhaustion and a potential short term reversal. Will this expected short term reversal turn into a bear market? A test of 5200 should be definitely expected in near future, below 4800 things will become dangerous.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEitaMF5_H0vX5qTdFZR9yiVLUY_dPn8sMuqOHA2gf3vBK96gtI_ODaRIKp3vtOMjBvYLSG7VkOVi9nbgDC5WwKZCKK56-xE443PKKCKijPOFlBdo9XFZXl4ZgoKa1tHNuyzMXG8suyc6g8/s1600/untitled1.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="331" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEitaMF5_H0vX5qTdFZR9yiVLUY_dPn8sMuqOHA2gf3vBK96gtI_ODaRIKp3vtOMjBvYLSG7VkOVi9nbgDC5WwKZCKK56-xE443PKKCKijPOFlBdo9XFZXl4ZgoKa1tHNuyzMXG8suyc6g8/s640/untitled1.JPG" width="640" /></a></div>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguv_cbDUrLPUvmt3TgOgSg_Usz6XfYHx0hKnml5uR7mzE08xp-F7sxY94sHVVPpEM2w2rUpsQPFi3zXjzJb8pRnl5SZQ_FdNS6CSJEX0SCxthp4mzaCkdLyseGViFjNIPWMuRpDxI6qWY/s1600/untitled2.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="350" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguv_cbDUrLPUvmt3TgOgSg_Usz6XfYHx0hKnml5uR7mzE08xp-F7sxY94sHVVPpEM2w2rUpsQPFi3zXjzJb8pRnl5SZQ_FdNS6CSJEX0SCxthp4mzaCkdLyseGViFjNIPWMuRpDxI6qWY/s640/untitled2.JPG" width="640" /></a></div>
<br /></div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com1tag:blogger.com,1999:blog-8196206213760518091.post-652979476390265162012-01-01T01:25:00.003+05:302012-01-01T01:26:59.244+05:30The New Year : UpsideTrader<div dir="ltr" style="text-align: left;" trbidi="on">
<br /><a href="http://www.upsidetrader.com/wp-content/uploads/learning.jpg" target="_blank" title="learning"><img alt="learning The New Year" height="220" src="http://www.upsidetrader.com/wp-content/uploads/learning.jpg" title="learning" width="300" /></a><br />
<i><b>“The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.”-Winston Churchill</b></i><br />
<br />
Amateur night is almost upon us as people form all corners of the
world will try and channel positive karma and hope for the new year.
It’s just a date on the calendar, truth is we can all change ourselves
for the better at any second of any minute in any hour anytime we want.
We just use this date to try and memorialize it. The liquor industry
loves this day as clubs, saloons and gin mills go eight deep at the bar.
Teetotalers will break down their wall and do shots of tequila while
wearing propeller hats. They will vomit violently at several points as
their Gucci’s become ruined. They will also realize during this violent
act of reverse peristalsis how little they chew their food. In some rare
cases arrests and divorce filings may result. Tomorrow morning, most
will wish they just stayed home and ordered Chinese food.<br />
<br />
Many Danish leap off chairs at midnight on New Year’s, hoping to ban all bad spirits in the new year.<br />
At midnight on New Year’s, Spaniards consume 12 grapes and try to
consume all of them by the time the clock stops chiming. They will worry
about solvency on Monday.<br />
<br />
In South America, those who wear red underpants, are hoping for love
in the new year. Those who wear yellow, are wishing for money.<br />
<br />
The ancient Greeks paraded around in the streets with a baby in a
basket on New Year’s Day. It’s part of the cradle to grave thingy.<br />
<br />
Fire crackers are set off to frighten off evil spirits on New Year’s
Day in China. They will create new and exciting ways to cook the books
on their public companies on Monday.<br />
<br />
The Romans began a tradition of exchanging gifts on New Year’s Eve,
by giving one another branches from sacred trees, for good fortune.
Berlusconi just sits around with hookers.<br />
<br />
88 percent of all New Year’s resolutions end in failure.<br />
<br />
As far as the <i><b>market and trading</b></i> goes this
year, it will be more of the same for me. We are all a work in progress
as traders, so to say that there the wont be tweaks and nuances would be
a lie.<br />
<br />
1- All media is shut OFF during trading. What Mike Holland and Bob
Doll think I should do is meaningless. Please realize that when they
come out positive on a stock it’s for a three year hold, if that’s your
thing then have at it.<br />
<br />
2-The hardest thing to do, tell myself every morning that what I
think couldn’t be more meaningless. I may think the market will get
crushed for a multitude of reasons, but if the tape is higher, I will
just be long. Same goes for the short side.<br />
<br />
3-I think my longest hold in 2011 was one month. I may extend that
time frame on certain names. Almost perfect entries will be of utmost
importance.<br />
<br />
4-Based on that, more hedging will need to happen.<br />
<br />
5- I will have more exposure to global markets both long and short, there will be a lot of action there.<br />
<br />
6-No trend no trade. If it ain’t happening I’ll watch and wait. I don’t have to be in it to win it all the time.</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-68179747480600938582011-12-13T12:03:00.002+05:302011-12-13T12:03:43.639+05:30Why I’d Steer Clear of Emerging Markets<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<h2 class="entry-title" style="background-color: white; color: #1155cc; font-family: arial, sans-serif; font-size: 18px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px; text-align: -webkit-auto;">
<a class="entry-title-link" href="http://www.zerohedge.com/contributed/why-i%E2%80%99d-steer-clear-emerging-markets%E2%80%A6-now" style="color: #1155cc; text-decoration: none;" target="_blank">Why I’d Steer Clear of Emerging Markets… For Now<div class="entry-title-go-to" style="background-attachment: initial; background-clip: initial; background-color: initial; background-image: url(http://www.google.com/reader/ui/3904077461-entry-action-icons.png); background-origin: initial; background-position: 0% -413px; background-repeat: no-repeat no-repeat; display: inline; height: 17px; margin-bottom: 0px; margin-left: 2px; margin-right: 0px; margin-top: 0px; opacity: 0.4; padding-left: 16px;">
</div>
</a><span class="entry-icons-placeholder" style="display: inline-block;"></span></h2>
<div class="entry-author" style="background-color: white; color: #666666; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto; text-decoration: none;">
<span class="entry-author-parent">by <span class="entry-author-name">Phoenix Capital Research</span></span><div class="entry-likers" style="display: inline-block; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px;">
</div>
</div>
<div class="entry-debug" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto;">
</div>
<div class="entry-annotations" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto;">
</div>
<div class="entry-body" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px; padding-top: 0.5em; text-align: -webkit-auto;">
<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
<div class="item-body" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
<br />
While stocks continue to float on ether and pipedreams, the commodities, credit, and bond markets are all forecasting another round of deflation. Whether it arrives now or in the near future remains to be seen. But he fact remains that at some point we’re going to have another 2008 event. The most likely cause will be Europe, but with the Middle East heating up, and Bernanke’s loose money policies becoming more and more politically toxic in the US, who knows?<br />
<br />
On that note, I expect emerging markets to underperform US indexes going forward. One chart I use to view how these two assets perform relative to one another is to price the Emerging Markets ETF (EEM) via the S&P 500. When this chart rallies, Emerging Markets outperform the S&P 500. When this chart falls, the S&P 500 outperforms Emerging Markets.<br />
<br />
<img height="284" src="http://www.zerohedge.com/sites/default/files/images/user20289/imageroot/2011/10/sc_0.png" width="460" /><br />
As you can see, since August, the S&P 500 has outperformed Emerging Markets with the exception of a few brief periods. I expect this trend to continue with US markets holding up better than their Emerging Market counterparts as we’ve recently broken major support.<br />
<br />
Indeed, the long-term chart of EEM relative to the S&P 500 shows that the love affair with Emerging Markets may indeed be ending:<br />
<br />
<img height="284" src="http://www.zerohedge.com/sites/default/files/images/user20289/imageroot/2011/10/sc-1_0.png" width="460" /><br />
<br />
As you can see, we’ve broken below MAJOR support here and have since failed to reclaim this line (indicating that former support is now resistance). This is a VERY bearish chart which indicates that we are very likely entering a prolonged period in which Emerging Markets will underperform US indexes dramatically.<br />
<br />
Prepare accordingly.</div>
</div>
</div>
</div>
</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-66126290417143628242011-12-03T11:59:00.001+05:302012-09-16T18:10:28.318+05:30Nifty : Triple Zig - Zag ?<div dir="ltr" style="text-align: left;" trbidi="on">
The recent Nifty moves must have fooled many traders : the intraday breakdown of 4700, but the inability to close below it on the daily chart pointed towards a possibility of a strong upward reaction. We got that as well, can't say how many traders would have caught that move.<br />
<br />
Next thought that comes in mind is how much more this rally can carry on, or have we made a short/medium term bottom. I took a look at the kind of pattern that has developed since last year, which in Elliot terminology looks like the formation of a triple zig-zag.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4KLkF_SFyYHLNAuYf3w9MpO9iXj-_yHFaHrNojjEEWvPJd7gVuW9qiOOpR84ON1R5f13oS9YYMRiwyPTH291goLr3fZOIJrHkzhw5TDNa7n7yraZQyDO5InOxer7Ck-RS-TgxKUatzMU/s1600/untitled.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4KLkF_SFyYHLNAuYf3w9MpO9iXj-_yHFaHrNojjEEWvPJd7gVuW9qiOOpR84ON1R5f13oS9YYMRiwyPTH291goLr3fZOIJrHkzhw5TDNa7n7yraZQyDO5InOxer7Ck-RS-TgxKUatzMU/s640/untitled.JPG" width="537" /></a></div>
<br />
<br />
In the above table, I have marked the waves as A, B, C and X. Zig-Zag type of correction generally tend to have a relationship among its counterpart waves. As we see the first 2 wave Bs are around 75% retracement of wave As, also wave Cs are roughly 150% extension of wave A. The lower table shows wave Xs being about 60% retracement of the entire 3 wave correction.<br />
<br />
The bottom 2 rows of the upper table is where I have tried to use this relationship to estimate the target of the current upward wave and the target of the next final C wave down. So the target of current rally looks to be ending around 5200 (nice resistance!) and finally a break of all supports to reach somewhere around 4100 (this is currently a vague target, underlying thought being another 1000 point or more massive fall).<br />
<br />
The reason I am still suspecting another fall is the fact that we are still awaiting a resolution of all these European s***. The fact that all central banks come together to provide liquidity means there was something very terrible about to happen. The current effort is just another kick on the can. I am expecting market to realize sooner than later the hopeless situation Europe is in and the solution lies in taking the pain rather than buying another dose of the same drug.<br />
<br />
The rally is also very technical in nature due to the fact markets was oversold and seasonal factors suggests some kind of year end Santa Claus rally! I feel we are going to make another top in late december or early january and then have a terrible Q1 2012. Hopefully 4000 or roundabout Nifty should find its feet.</div>
Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-13685046243336626132011-11-26T21:12:00.001+05:302011-11-26T21:53:03.824+05:30Longer Term View : Ichimoku Dependent!<div dir="ltr" style="text-align: left;" trbidi="on">
Some time ago, I posted a weekly chart, requesting all my readers to exit out of equities because something happened in the charts which was signalling the end of bull market which started from October 2008. Which meant all rallies should be now sold into. That happened in January of this year, when Nifty after making its first lower high, formed a bearish engulfing candlestick pattern. Subsequently Nifty gave a sell signal on the Ichimoku Cloud as well. Since then Nifty has made a series of lower highs and lower lows.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZGp0UANzym4wVIRuqLewAXsKMQ9S364SNes0gA96SKWgkJHGMKrYhTpzpsCDtWbmSv9gp74hu13khQDQ-baJ4QUc3cMpe5tJZdkcK7LbBiqdEXM-DoaLNg5OqkbzsBu3mT0aBtY1uKWc/s1600/untitled.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="247" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZGp0UANzym4wVIRuqLewAXsKMQ9S364SNes0gA96SKWgkJHGMKrYhTpzpsCDtWbmSv9gp74hu13khQDQ-baJ4QUc3cMpe5tJZdkcK7LbBiqdEXM-DoaLNg5OqkbzsBu3mT0aBtY1uKWc/s400/untitled.JPG" width="400" /></a></div>
<br />
<br />
This week it has broken the 200 week moving average, another confirmatory signal, which the long term players should beware of. Investing now, and giving valuation as a reason, would be foolhardy. The above chart shows how Nifty took some support at the 200 week moving average, and also gave a buy signal in October but the rally soon fizzled out and since it broke the 4700 support, another round of heavy selling could be expected even if there is some relief rally.<br />
<br />
I wanted to point out, in this post the beauty of Ichimoku cloud which did not give any sort of buy signal, even though there were strong rallies from February to April and then in October. Ichimoku still believes that the trend is down and because its below the cloud expecting any kind of immediate support would be stupid.<br />
<br />
<i>I would like to point out that the monthly charts shows 4000 as support area.</i><br />
<i><br /></i><br />
Technically from an investing point of view, I will until there is a higher low formed on the charts and Ichimoku buy signal.</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-36284764975746500622011-11-26T20:47:00.001+05:302011-11-26T20:47:52.861+05:30Could Not Resist Re-Posting It !<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<h2 class="entry-title" style="background-color: white; font-family: arial, sans-serif; font-size: 18px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px; text-align: -webkit-auto;">
<a class="entry-title-link" href="http://peterlbrandt.com/happy-thanksgiving-the-dow-could-be-going-to-4000/" style="color: #1155cc; text-decoration: none;" target="_blank">Happy Thanksgiving — the Dow could be going to 4,000<div class="entry-title-go-to" style="background-attachment: initial; background-clip: initial; background-color: initial; background-image: url(http://www.google.com/reader/ui/3904077461-entry-action-icons.png); background-origin: initial; background-position: 0% -413px; background-repeat: no-repeat no-repeat; display: inline; height: 17px; margin-bottom: 0px; margin-left: 2px; margin-right: 0px; margin-top: 0px; opacity: 0.4; padding-left: 16px;">
</div>
</a><span class="entry-icons-placeholder" style="display: inline-block;"></span></h2>
<div class="entry-author" style="background-color: white; color: #666666; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto; text-decoration: none;">
<span class="entry-author-parent">by <span class="entry-author-name">PeterLBrandt</span></span><div class="entry-likers" style="display: inline-block; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px;">
</div>
</div>
<div class="entry-debug" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto;">
</div>
<div class="entry-annotations" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto;">
</div>
<div class="entry-body" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px; padding-top: 0.5em; text-align: -webkit-auto;">
<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
<div class="item-body" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
<br />
<a href="http://peterlbrandt.com/wp-content/uploads/2011/11/turkey.jpg" style="color: #1155cc;" target="_blank"><img alt="" height="183" src="http://peterlbrandt.com/wp-content/uploads/2011/11/turkey.jpg" style="border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px;" title="turkey" width="182" /></a><br />
<strong>I hate to be the turkey of the day/month/year, but we are in a bear market. The only question is how low will this turkey go?</strong><br />
I am a chartist. I deal in chart patterns. I deal in possibilities, not probabilities and certainly not in certainties. I can only state what a chart is telling me by its geometric construction — and geometric patterns, even when clearly identified, are subject to failure.<br />
Nevertheless, I am obligated to call a chart for what it is. Part of chart analysis is determining the price targets implied in a certain chart patterns. I get loads of criticism on this one. Whenever I state an implied objective of a pattern I hear the same whine:<br />
<blockquote>
<em>“But, but, but,but, Brandt, you say in your book that charts are a trading tool and not to be used for price forecasting. Yet, Brandt, you make price forecasts. You are confusing me. You say charts should not be used for making price forecasts, but that is exactly what you are doing.”</em></blockquote>
If you are in this camp, I have one thing to say to you – <span style="text-decoration: underline;">get over it, learn to live with it</span>.<br />
Charts are NOT for price forecasting. But a chart pattern carries an implied price move. I recognize that any given chart pattern has a significant chance of failure. But until a pattern fails or is not modified by a contrary pattern, then price targets are a good guideline.<br />
When prices act contrary to the implications of a chart, then I run for the hills. But until then, I retain strong opinions (weakly held). If you can’t understand this nuance, that is your problem, not mine.<br />
OK, all this was a build up to your Thanksgiving gift — a price forecast in the DJIA. Please step back and take a 30,000 foot view with me.<br />
The rally from the March 2009 low was on decreasing volume. Rallies that do not draw in the public are very suspect, and prove more often than not to be corrective rallies. In this case, the correction is of the 2008 to 2009 price decline. That’s right, the volume profile of the this 32-month rally is much more typical of a bear market rally than of a genuine bull trend.<br />
The founders of classical charting (Schabacker, Edwards, Magee) identified something called a 3-fan principle. The 3-fan principle specifies that a corrective rally may be defined by trendlines with decreasing angles of attack. The concept also specifies that the violation of the third fan line establishes the top of the corrective rally — and that the subsequent decline will retrace the entire distance of the corrective rally.<br />
<div style="text-align: center;">
<a href="http://peterlbrandt.com/wp-content/uploads/2011/11/11.23_DJIA_weekly.jpg" style="color: #1155cc;" target="_blank"><img alt="" height="345" src="http://peterlbrandt.com/wp-content/uploads/2011/11/11.23_DJIA_weekly.jpg" style="border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px;" title="11.23_DJIA_weekly" width="619" /></a></div>
Now, you may want to give me with all the reasons why a return to the 2009 low is not possible. That’s fine — but, keep it to yourself. I will change my mind when price makes me change my mind, not one moment before.<br />
The fact that the daily and weekly charts completed a H&S top simultaneously with the violation of the third fan line is a confirmation that the May and July highs will not be breached. Another classical charting principle is that H&S tops and bottoms (when they meet all of the criteria for the pattern, which this H&S top did do) represent a major turning point in a trend.<br />
Next, let’s move from a 30,000-foot view to a perspective from the space station. Should the implications of the 3-fan principle be realized, something very, very, very (<em>do I need to repeat the word “very” again?)</em> significant would become apparent to a chartist.<br />
A move back to the 2009 low on the quarterly semi-log chart sets up the possibility (not probability, not certainty) of a 13-year H&S top whereby the entire advance from the March 2009 low is nothing more than the right shoulder of this massive configuration.<br />
Should the market decline toward the 2009 low, then the massive H&S top on the quarterly chart becomes a real (but wild) possibility. The rules of classical charting specify that a decisive completion of a H&S top should lead to a decline equal to the height of the H&S.<br />
<div style="text-align: center;">
<a href="http://peterlbrandt.com/wp-content/uploads/2011/11/11.23_DJIA_quarterly.jpg" style="color: #1155cc;" target="_blank"><img alt="" height="343" src="http://peterlbrandt.com/wp-content/uploads/2011/11/11.23_DJIA_quarterly.jpg" style="border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px;" title="11.23_DJIA_quarterly" width="619" /></a></div>
On an arithmetic basis, the target in the Dow would become lower than 1,000. On the semi-long chart the target would be around 4,000. So I will use the higher target.<br />
Do I really think the DJIA will decline to 4,000? I have no idea. But I do know this — that if it does it will be one wild (and hopefully profitable) ride.</div>
</div>
</div>
</div>
</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-86236968596057819352011-11-19T22:24:00.001+05:302011-11-20T00:07:06.583+05:30Nifty : Channeling Challenge<div dir="ltr" style="text-align: left;" trbidi="on">
Last week's market action has caught the bulls off guard. After the October rally November was expected to be a follow through month or at the most a consolidation period. Well, taking market lightly never works!<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOYp0ZPnTYj1dL-MD_2BvZjbBXB1gMmTPV6TXEQ3TeJ3J0NumdMvQPu5spVDeHQ49ZUOcDbV90yLPxPWaDAUnTGWapWo6inea3Rxf69mnByaCtNh-xmzzh3dLL-G63u_QDmI_F1ZJMiSE/s1600/untitled.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="356" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOYp0ZPnTYj1dL-MD_2BvZjbBXB1gMmTPV6TXEQ3TeJ3J0NumdMvQPu5spVDeHQ49ZUOcDbV90yLPxPWaDAUnTGWapWo6inea3Rxf69mnByaCtNh-xmzzh3dLL-G63u_QDmI_F1ZJMiSE/s400/untitled.JPG" width="400" /></a></div>
<br />
<br />
Above is the weekly chart, the crack below 20 week moving average, shows that the bullish momentum is long gone and its time to beware of the bears. The other important observation is Nifty's inability to even challenge the upper trend line. This shows that Nifty was weak in its up move and the down move would be harsher!<br />
<br />
Obviously all hopes are now on 4700 providing the support. I have generally seen, when some kind of level is over watched the market tends to ignore it and catch most people on wrong foot. So we can expect no support there (bulls would be crushed) or Nifty not at all reaching there (bears would be fooled). I believe the former to be more likely. The ultimate trick the market can play would be to fool both bulls and bears, which would be crashing below 4700 stop out all bulls and suck the bears in and then rally furiously much higher! This would be the toughest scenario to work on and "the vigilant" would be rewarded.<br />
<br />
Another point I would like to make is about volumes. I know that the F&O volumes have been quite high, but the cash market volume is certainly pathetic. You can see how whole of 2011 have been on quite low volumes. Traditional technical knowledge suggest that a sell off on low volumes is a sign of correction in a predominant uptrend. But there is another aspect of it, low volumes can also be a reason for concern. Low volumes means there are less sellers with conviction, but it also means there are less buyers with conviction. So the correction with lower volumes cannot be taken for granted to be a dip to buy in.<br />
<br />
I will be surprised if 4700 provides a great deal of support in coming weeks. The lower trend line is one to be watched and in case it breaks, well, welcome to the panic street!</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-20059021761151598622011-11-19T19:45:00.001+05:302011-11-19T19:45:08.923+05:30Six Keys to Being Excellent at Anything<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div id="pageFeature" style="background-color: white; clear: both; font-family: Helvetica, Arial, sans-serif; font-size: 12px; line-height: 22px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 20px; padding-right: 20px; padding-top: 10px; text-align: -webkit-auto;">
<h1 style="font-size: 24px; line-height: 27px; margin-bottom: 5px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
Six Keys to Being Excellent at Anything</h1>
<div class="byline" style="color: #585556; margin-bottom: 5px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
2:21 PM Tuesday August 24, 2010 | <a href="http://blogs.hbr.org/schwartz/2010/08/six-keys-to-being-excellent-at.html#disqusComments" style="color: #95ba12; font-weight: bold; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">Comments (217)</a></div>
</div>
<div id="pageRightSubColumn" style="background-color: white; float: right; font-family: Helvetica, Arial, sans-serif; font-size: 16px; line-height: 18px; margin-bottom: 0px; margin-left: 20px; margin-right: 20px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: -webkit-auto; width: 200px;">
<div class="widget" id="relatedProducts" style="border-top-color: rgb(35, 31, 32); border-top-style: solid; border-top-width: 3px; font-size: 12px; margin-bottom: 25px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
<div class="vertical BlogArticle" id="bnDivFeaturedProducts" style="float: left; margin-bottom: 10px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
</div>
</div>
</div>
<div class="addthis_toolbox" id="shareWidgetTop" style="background-color: white; font-family: Helvetica, Arial, sans-serif; font-size: 16px; line-height: 18px; margin-bottom: 12px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 20px; padding-right: 20px; padding-top: 0px; text-align: -webkit-auto; width: 360px;">
<ul class="social-links custom_images" style="border-bottom-color: rgb(222, 222, 222); border-bottom-style: solid; border-bottom-width: 1px; border-left-color: rgb(222, 222, 222); border-left-style: solid; border-left-width: 0px; border-right-color: rgb(222, 222, 222); border-right-style: solid; border-right-width: 0px; border-top-color: rgb(222, 222, 222); border-top-style: solid; border-top-width: 1px; font-family: Verdana, sans-serif; line-height: 14px; list-style-image: initial; list-style-position: initial; list-style-type: none; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; overflow-x: auto; overflow-y: auto; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-transform: uppercase;">
<li style="float: left; margin-bottom: 0px; margin-left: 0px; margin-right: 60px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 3px;"><a class="social-email addthis_button_email at300b" href="http://www.addthis.com/bookmark.php" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: url(http://blogs.hbr.org/hbrg-main/resources/images/social-links-bg.gif); background-origin: initial; background-position: 0px 0px; background-repeat: no-repeat no-repeat; color: #585556; cursor: pointer; display: block; font-size: 11px; height: 19px; outline-color: initial; outline-style: none; outline-width: initial; padding-bottom: 0px; padding-left: 23px; padding-right: 0px; padding-top: 1px; text-decoration: none;" title="Email">EMAIL</a></li>
<li style="float: left; margin-bottom: 0px; margin-left: 0px; margin-right: 60px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 3px;"><a class="social-share addthis_button" href="http://www.addthis.com/bookmark.php" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: url(http://blogs.hbr.org/hbrg-main/resources/images/social-links-bg.gif); background-origin: initial; background-position: 0px -19px; background-repeat: no-repeat no-repeat; color: #585556; cursor: pointer; display: block; font-size: 11px; height: 19px; outline-color: initial; outline-style: none; outline-width: initial; padding-bottom: 0px; padding-left: 23px; padding-right: 0px; padding-top: 1px; text-decoration: none;">SHARE</a></li>
<li class="last" style="border-bottom-color: initial !important; border-bottom-style: initial !important; border-bottom-width: 0px !important; float: left; margin-bottom: 0px; margin-left: 0px; margin-right: 60px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 3px;"><a class="social-print" href="http://blogs.hbr.org/schwartz/2010/08/six-keys-to-being-excellent-at.html" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: url(http://blogs.hbr.org/hbrg-main/resources/images/social-links-bg.gif); background-origin: initial; background-position: 0px -38px; background-repeat: no-repeat no-repeat; color: #585556; display: block; font-size: 11px; height: 19px; outline-color: initial; outline-style: none; outline-width: initial; padding-bottom: 0px; padding-left: 23px; padding-right: 0px; padding-top: 1px; text-decoration: none;">PRINT</a></li>
</ul>
</div>
<div id="articleBody" style="background-color: white; font-family: Helvetica, Arial, sans-serif; font-size: 13px; line-height: 18px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 20px; padding-right: 20px; padding-top: 0px; text-align: -webkit-auto;">
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
I've been playing tennis for nearly five decades. I love the game and I hit the ball well, but I'm far from the player I wish I were.</div>
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
I've been thinking about this a lot the past couple of weeks, because I've taken the opportunity, for the first time in many years, to play tennis nearly every day. My game has gotten progressively stronger. I've had a number of rapturous moments during which I've played like the player I long to be.</div>
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
And almost certainly could be, even though I'm 58 years old. Until recently, I never believed that was possible. For most of my adult life, I've accepted the incredibly durable myth that some people are born with special talents and gifts, and that the potential to truly excel in any given pursuit is largely determined by our genetic inheritance.</div>
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
During the past year, I've read no fewer than five books — and a raft of scientific research — which powerfully challenge that assumption (see below for a list). I've also written one, <em style="font-style: oblique;"><a href="http://www.amazon.com/Way-Were-Working-Isnt-Performance/dp/1439127662" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">The Way We're Working Isn't Working</a></em>, which lays out a guide, grounded in the science of high performance, to systematically building your capacity physically, emotionally, mentally, and spiritually.</div>
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
We've found, in our work with executives at dozens of organizations, that it's possible to build any given skill or capacity in the same systematic way we do a muscle: push past your comfort zone, and then rest. <strike>Aristotle </strike>Will Durant*, commenting on Aristotle, pointed out that the philosopher had it exactly right 2000 years ago: "<a href="http://www.brainyquote.com/quotes/quotes/a/aristotle145967.html" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">We are what we repeatedly do</a>." By relying on highly specific practices, we've seen our clients dramatically improve skills ranging from empathy, to focus, to creativity, to summoning positive emotions, to deeply relaxing.</div>
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
Like everyone who studies performance, I'm indebted to the extraordinary Anders Ericsson, arguably the world's leading researcher into high performance. For more than two decades, Ericsson has been making the case that it's not inherited talent which determines how good we become at something, but rather <a href="http://hbr.org/2007/07/the-making-of-an-expert/ar/1" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">how hard we're willing to work </a>— something he calls "<a href="http://www.nytimes.com/2006/05/07/magazine/07wwln_freak.html" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">deliberate practice</a>." Numerous researchers now agree that <a href="http://www.thisislondon.co.uk/standard/article-23588962-the-secret-of-your-success-10000-hours.do" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">10,000 hours </a>of such practice is the minimum necessary to achieve expertise in any complex domain.</div>
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
That notion is wonderfully empowering. It suggests we have remarkable capacity to influence our own outcomes. But that's also daunting. One of Ericsson's central findings is that practice is not only the most important ingredient in achieving excellence, but also the most difficult and the least intrinsically enjoyable.</div>
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
If you want to be really good at something, it's going to involve relentlessly pushing past your comfort zone, as well as frustration, struggle, setbacks and failures. That's true as long as you want to continue to improve, or even maintain a high level of excellence. The reward is that being really good at something you've earned through your own hard work can be immensely satisfying.</div>
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
Here, then, are the six keys to achieving excellence we've found are most effective for our clients:</div>
<ol style="list-style-image: initial; list-style-position: initial; margin-bottom: 0px; margin-left: 15px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
<li style="margin-bottom: 10px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><strong style="font-weight: bold;">Pursue what you love.</strong> Passion is an incredible motivator. It fuels focus, resilience, and perseverance.</li>
<li style="margin-bottom: 10px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><strong style="font-weight: bold;">Do the hardest work first</strong>. We all move instinctively toward pleasure and away from pain. Most great performers, Ericsson and others have found, <a href="http://www.time.com/time/classroom/psych/unit5_article1.html" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">delay gratification </a>and take on the difficult work of practice in the mornings, before they do anything else. That's when most of us have the most energy and the fewest distractions.</li>
<li style="margin-bottom: 10px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><strong style="font-weight: bold;">Practice intensely</strong>, without interruption for short periods of no longer than 90 minutes and then take a break. Ninety minutes appears to be the maximum amount of time that we can bring the highest level of focus to any given activity. The evidence is equally strong that great performers practice no more than 4 ½ hours a day.</li>
<li style="margin-bottom: 10px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><strong style="font-weight: bold;">Seek expert feedback, in intermittent doses</strong>. The simpler and more precise the feedback, the more equipped you are to make adjustments. Too much feedback, too continuously can create cognitive overload, increase anxiety, and interfere with learning.</li>
<li style="margin-bottom: 10px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><strong style="font-weight: bold;">Take regular renewal breaks</strong>. Relaxing after intense effort not only provides an opportunity to rejuvenate, but also to metabolize and embed learning. It's also during rest that the right hemisphere becomes more dominant, which can lead to creative breakthroughs.</li>
<li style="margin-bottom: 10px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><strong style="font-weight: bold;">Ritualize practice</strong>. Will and discipline are wildly overrated. As the researcher <a href="http://www.fsu.edu/profiles/baumeister/" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">Roy Baumeister</a>has found, <a href="http://well.blogs.nytimes.com/2007/12/06/how-to-boost-your-willpower/" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">none of us have very much </a>of it. The best way to insure you'll take on difficult tasks is to build rituals — specific, inviolable times at which you do them, so that over time you do them without having to squander energy thinking about them.</li>
</ol>
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
<br />I have practiced tennis deliberately over the years, but never for the several hours a day required to achieve a truly high level of excellence. What's changed is that I don't berate myself any longer for falling short. I know exactly what it would take to get to that level.</div>
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
I've got too many other higher priorities to give tennis that attention right now. But I find it incredibly exciting to know that I'm still capable of getting far better at tennis — or at anything else — and so are you.</div>
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
<br />Here are the recent books on this subject:</div>
<ul style="list-style-image: initial; list-style-position: initial; margin-bottom: 0px; margin-left: 15px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
<li style="margin-bottom: 10px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><em style="font-style: oblique;"><a href="http://www.amazon.com/Talent-Overrated-Separates-World-Class-Performers/dp/1591842247" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">Talent is Overrated </a></em>by Geoffrey Colvin. My personal favorite.</li>
<li style="margin-bottom: 10px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><em style="font-style: oblique;"><a href="http://www.amazon.com/Talent-Code-Greatness-Born-Grown/dp/055380684X" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">The Talent Code </a></em>by Daniel Coyle</li>
<li style="margin-bottom: 10px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><em style="font-style: oblique;"><a href="http://www.amazon.com/Outliers-Story-Success-Malcolm-Gladwell/dp/0316017922" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">Outliers</a></em> by Malcolm Gladwell</li>
<li style="margin-bottom: 10px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><em style="font-style: oblique;"><a href="http://www.amazon.com/Genius-All-Us-Everything-Genetics/dp/0385523653" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">The Genius in All of Us </a></em>by David Schenk.</li>
<li style="margin-bottom: 10px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><em style="font-style: oblique;"><a href="http://www.amazon.com/Bounce-Federer-Picasso-Beckham-Science/dp/0061723754/ref=sr_1_1?s=books&ie=UTF8&qid=1282672154&sr=1-1" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">Bounce </a></em>by Mathew Syed</li>
</ul>
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
<br /><em style="font-style: oblique;">* Thanks to commenter Rick Thomas for pointing out the misattribution.</em></div>
<div style="line-height: 22px; margin-bottom: 15px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
<br /><em style="font-style: oblique;"><a href="http://en.wikipedia.org/wiki/Tony_Schwartz_(The_Energy_Project)" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">Tony Schwartz </a>is president and CEO of <a href="http://www.theenergyproject.com/" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">The Energy Project</a>. He is the author of the June, 2010 HBR article, "<a href="http://hbr.org/2010/06/the-productivity-paradox-how-sony-pictures-gets-more-out-of-people-by-demanding-less/ar/1" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">The Productivity Paradox: How Sony Pictures Gets More Out of People by Demanding Less</a>," and coauthor, with Catherine McCarthy, of the 2007 HBR article, "<a href="http://hbr.org/product/manage-your-energy-not-your-time/an/R0710B-PDF-ENG" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">Manage Your Energy, Not Your Time</a>." Tony is also the author of the new book "<em style="font-style: oblique;"><a href="http://www.amazon.com/Way-Were-Working-Isnt-Performance/dp/1439127662" style="color: #b20022; outline-color: initial; outline-style: none; outline-width: initial; text-decoration: none;">The Way We're Working Isn't Working: The Four Forgotten Needs that Energize Great Performance</a></em>" (Free Press, 2010).</em></div>
</div>
</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-80936969393399704782011-11-15T23:48:00.001+05:302011-11-16T00:26:01.104+05:30Emerging Market : Decoupled the Wrong Way?<div dir="ltr" style="text-align: left;" trbidi="on">
For the past few days and weeks, I am observing that Nifty is under performing US markets. When Dow rallies the natural tendency is to expect Nifty to rally the similar percentage points and when it falls the same amount of correction. In the current environment where Global headlines dominate the proceedings I think its fair to assume it.<br />
<br />
But as you too must have noticed, Nifty is not at all picking much of the positive sentiment that has developed recently in the US markets atleast. The chart below compares Nifty Vs S&P 500 for the past 3 years.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgI_V56MqJXuzariH04n2Xe4SeVtoptrYGeMgEsh4picwu5hpirmp0RbuC6bmtWdMubniSbSjYwEIOCoFWJrGe0UL_xp_RGromjwA2z5dEhI9Y8TbOvCvloq76RgWo4qirZhFtDAfhv18c/s1600/untitled.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="181" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgI_V56MqJXuzariH04n2Xe4SeVtoptrYGeMgEsh4picwu5hpirmp0RbuC6bmtWdMubniSbSjYwEIOCoFWJrGe0UL_xp_RGromjwA2z5dEhI9Y8TbOvCvloq76RgWo4qirZhFtDAfhv18c/s400/untitled.JPG" width="400" /></a></div>
<br />
<br />
As you can see from Oct 2010 to Feb 2011 (4 months) Nifty has under performed SPX, since then it has been at par with it. Is another bout of under performance coming up for Nifty? Also notice how since Dec 2008 till July 2009 Nifty was trumping the SPX.<br />
<br />
What I feel is that when RISK ON trade is on, emerging markets do much better than developed markets, and when RISK OFF trade is on, it fairs much poorly. So if fear trade is to carry on for some more time, expect Nifty SPX ratio to hit the 3.5 mark in near future. I checked the similar chart for Hang Seng instead of Nifty and it also tells the same story, only the situation is more grim.</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-82421335847748060822011-11-13T21:16:00.001+05:302011-11-13T21:17:08.577+05:30Ed Easterling’s 12 Rules of Market Cycles<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<h2 class="entry-title" style="background-color: white; font-family: arial, sans-serif; font-size: 18px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px; text-align: -webkit-auto;">
<a class="entry-title-link" href="http://www.ritholtz.com/blog/2011/11/ed-easterlings-12-rules-of-market-cycles/" style="color: #1155cc; text-decoration: none;" target="_blank">Ed Easterling’s 12 Rules of Market Cycles<div class="entry-title-go-to" style="background-attachment: initial; background-clip: initial; background-color: initial; background-image: url(http://www.google.com/reader/ui/3904077461-entry-action-icons.png); background-origin: initial; background-position: 0% -413px; background-repeat: no-repeat no-repeat; display: inline; height: 17px; margin-bottom: 0px; margin-left: 2px; margin-right: 0px; margin-top: 0px; opacity: 0.4; padding-left: 16px;">
</div>
</a><span class="entry-icons-placeholder" style="display: inline-block;"></span></h2>
<div class="entry-author" style="background-color: white; color: #666666; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto; text-decoration: none;">
<span class="entry-author-parent">by <span class="entry-author-name">Barry Ritholtz</span></span><div class="entry-likers" style="display: inline-block; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px;">
</div>
</div>
<div class="entry-debug" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto;">
</div>
<div class="entry-annotations" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto;">
</div>
<div class="entry-body" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px; padding-top: 0.5em; text-align: -webkit-auto;">
<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
<div class="item-body" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
Ed Easterling of <a href="http://www.crestmontresearch.com/" style="color: #1155cc;" target="_blank">Crestmont Research</a> boils down his views on long term markets to 12 rules of secular stock market cycles. In case you are unfamiliar with Ed’s work, several books, including <a href="http://www.amazon.com/exec/obidos/ASIN/1879384620/thebigpictu09-20" style="color: #1155cc;" target="_blank"><em>Unexpected Returns: Understanding Secular Stock Market Cycles</em></a>; he also wrote <em><a href="http://www.ritholtz.com/2011/02/probable-outcomes/" style="color: #1155cc;" target="_blank">Probable Outcomes</a></em>.<br />
Here are Ed Easterling’s 12 Rules of Market Cycles:<br />
<blockquote>
1. Secular cycles are driven by the inflation rate (deflation, price stability, and higher inflation)<br />
2. Secular bulls occur when P/E starts low and ends high over an extended period<br />
3. Secular bears occur when P/E starts high and ends low over an extended period<br />
4. Cyclical bulls and bears are interim periods of directional swings within secular periods<br />
5. Cyclical cycles are driven by market psychology, illiquidity, or other generally temporary condition(s)<br />
6. Time is irrelevant to the length of secular stock market cycles<br />
7. Secular bulls require a doubling or tripling of P/E<br />
8. Secular bears occur as P/E stalls and falls by one-third to two-thirds or more<br />
9. When real economic growth is near 3%, there is a natural floor for P/E between 5 and 10, a natural ceiling around the mid-20s, and a typical average in the mid-teens<br />
10. If economic growth shifts upward or downward for the foreseeable future, the natural range moves upward or downward, respectively<br />
11. Inflation drives P/Es location within the range; economic growth drives the level of the range<br />
12. The stock market is not consistently predictable over months, quarters, or periods of a few years; the stock market is, however, quite predictable over periods approaching a decade or longer based upon starting P/E</blockquote>
Good stuff. That’s an interesting take on broad cycles.</div>
</div>
</div>
</div>
</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-72275813117891879952011-11-13T12:43:00.001+05:302011-11-13T12:43:59.619+05:30Best Action is Inaction<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<h1 class="entry-title full-title" style="background-attachment: initial; background-clip: initial; background-color: white; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #51555c; font-family: helvetica, arial, sans-serif; font-size: 24px; line-height: 1; margin-bottom: 9px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: -webkit-auto; vertical-align: baseline;">
<a href="http://www.surlytrader.com/best-action-is-inaction/" rel="bookmark" rev="post-4102" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #a00004; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: none; vertical-align: baseline;" title="Permanent link to Best Action is Inaction">Best Action is Inaction</a></h1>
<div class="entry-content full-content" style="background-attachment: initial; background-clip: initial; background-color: white; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; clear: both; color: #51555c; font-family: helvetica, arial, sans-serif; font-size: 12px; line-height: 18px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; overflow-x: auto; overflow-y: auto; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 9px; text-align: -webkit-auto; vertical-align: baseline; width: 590px;">
<div id="fb_share_1" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; float: right; margin-bottom: 0px; margin-left: 10px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">
<a href="http://www.facebook.com/sharer.php?u=http%3A%2F%2Fwww.surlytrader.com%2Fbest-action-is-inaction%2F&t=Best%20Action%20is%20Inaction%20%7C%20SurlyTrader&src=sp" name="fb_share" share_url="http://www.surlytrader.com/best-action-is-inaction/" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #a00004; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: none; vertical-align: baseline;" type="box_count"><span class="fb_share_size_Small fb_share_count_wrapper" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; float: left; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; position: relative; vertical-align: baseline;"><span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;"></span><span class="FBConnectButton FBConnectButton_Small" style="background-attachment: initial; background-clip: initial; background-color: #29447e; background-image: url(http://static.ak.fbcdn.net/images/connect_sprite.png); background-origin: initial; background-position: 0% -232px; background-repeat: no-repeat no-repeat; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; cursor: pointer; display: inline-block; font-size: 10px; line-height: 10px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: none; outline-width: initial; padding-bottom: 0px; padding-left: 1px; padding-right: 0px; padding-top: 0px; text-decoration: none; vertical-align: baseline;"><span class="FBConnectButton_Text" style="background-attachment: initial; background-clip: initial; background-color: #5f78ab; background-image: url(http://static.ak.fbcdn.net/images/connect_sprite.png); background-origin: initial; border-bottom-color: rgb(26, 53, 110); border-bottom-style: solid; border-bottom-width: 1px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-color: rgb(135, 154, 192); border-top-style: solid; border-top-width: 1px; color: white; display: block; font-family: 'lucida grande', tahoma, verdana, arial, sans-serif; font-weight: bold; margin-bottom: 0px; margin-left: 17px; margin-right: 1px; margin-top: 1px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 3px; padding-left: 6px; padding-right: 6px; padding-top: 2px; text-shadow: none; vertical-align: baseline;">Share</span></span></span></a></div>
<div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">
</div>
<div class="ezAdsense adsense adsense-leadin" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: center; vertical-align: baseline;">
<ins style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-style: none; border-color: initial; border-color: initial; border-left-style: none; border-right-style: none; border-style: initial; border-top-style: none; border-width: initial; display: inline-table; height: 15px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; position: relative; vertical-align: baseline; visibility: visible; width: 468px;"><ins id="aswift_1_anchor" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-style: none; border-color: initial; border-color: initial; border-left-style: none; border-right-style: none; border-style: initial; border-top-style: none; border-width: initial; display: block; height: 15px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; position: relative; vertical-align: baseline; visibility: visible; width: 468px;"><iframe allowtransparency="true" frameborder="0" height="15" hspace="0" id="aswift_1" marginheight="0" marginwidth="0" name="aswift_1" scrolling="no" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; left: 0px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; position: absolute; top: 0px; vertical-align: baseline;" vspace="0" width="468"></iframe></ins></ins></div>
<div class="tweetmeme_button" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; float: right; margin-bottom: 0px; margin-left: 10px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">
<iframe frameborder="0" height="61" scrolling="no" src="http://api.tweetmeme.com/button.js?url=http%3A//www.surlytrader.com/best-action-is-inaction/&&source=surlytrader&style=normal&b=2&o=http%3A//www.google.com/reader/view/%23stream/feed%252Fhttp%253A%252F%252Fwww.marketanthropology.com%252Ffeeds%252Fposts%252Fdefault" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;" width="50"></iframe></div>
<div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 18px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">
In a previous career, the objective of my trading was to grab as many points or “ticks” as I could out of the day’s trading action. Generally, the wider the trading range for the day and the greater the volatility, the more money I made. The action since the beginning of August has been fertile territory for the day trader. Unless you are a day trader, read on for my own educated advice.</div>
<div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 18px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;">
Trying to establish a *position* or fundamental/technical trade in this sawtooth volatility is masochistic.</div>
<div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 18px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: left; vertical-align: baseline;">
<a href="http://www.surlytrader.com/wp-content/uploads/2011/11/VIX-and-Stocks-Sawtooth.jpg" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #a00004; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: none; vertical-align: baseline;"><img alt="" class="aligncenter size-full wp-image-4103" height="368" src="http://www.surlytrader.com/wp-content/uploads/2011/11/VIX-and-Stocks-Sawtooth.jpg" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; display: block; margin-bottom: 0px; margin-left: auto; margin-right: auto; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;" title="VIX and Stocks Sawtooth" width="475" /></a></div>
<div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 18px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: left; vertical-align: baseline;">
First, let me say that becoming a profitable day trader is not easy. You must watch the market at all times and you must learn the discipline to cut losers quickly and let winners run. At least 2/3 who try to become a day trader will fail and it will most likely take a year or more to turn the corner. The good news is that a successful short term trader can bring knowledge gained from day trading into longer term trading strategies.</div>
<div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 18px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: left; vertical-align: baseline;">
The first obvious and hardest lesson is to get rid of all pride, all pretense of “beating the market”, and to be able to admit defeat quickly by cutting losers short. The reality is that over short trading periods, you will have a number of losing trades that is nearly equal to the number of winning trades. The difference between success and failure is cutting the losers short and letting the winners run. Over longer periods of time you might be able to increase your success ratio, but you still need to exert discipline over your emotions.</div>
<div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 18px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: left; vertical-align: baseline;">
The second lesson that can be applied is to<strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; vertical-align: baseline;"> never force a trade</strong>. If you watch the markets all day long, you almost feel compelled to be *in* them. The reality is that you should almost always force yourself to wait until you cannot sit on your hands anymore. As a daytrader, these compelling opportunities could be once or twice a day. As a long term trader, these compelling opportunities could be once a year. It is ok to sit in cash or to have most of your risk hedged away. Being in cash or net neutral allows you to jump on an opportunity when you believe it looks screaming rich or screaming cheap. Those who were anxious are most likely sitting on a loser, praying that the trade comes back, and too fearful to double down.</div>
<div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; margin-bottom: 18px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-align: left; vertical-align: baseline;">
So stop worrying about “missing out” lest you want to get chopped up as well.</div>
</div>
</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-28128738908995326132011-11-13T12:38:00.001+05:302011-11-13T12:39:59.054+05:30Barclays Technical Guru: Sorry, But Markets Broke Down Ominously All Over The Place Yesterday<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div style="background-color: white; font-family: arial, helvetica, sans-serif; font-size: 13px; line-height: 16px; margin-top: 1em; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
Fans of technical analysis will enjoy this big chart from Barclays' guru Jordan Kotick who sees signs everyone that markets have broken down in a bad way.</div>
<div style="background-color: white; font-family: arial, helvetica, sans-serif; font-size: 13px; line-height: 16px; margin-top: 1em; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
</div>
<table class="image-container" style="-webkit-border-horizontal-spacing: 0px; -webkit-border-vertical-spacing: 0px; background-color: white; border-collapse: collapse; color: black; font-family: arial, helvetica, sans-serif; font-size: 13px; line-height: 16px; text-align: left; width: 200px;"><tbody>
<tr><td style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><div class="image" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">
<img alt="chart" border="0" src="http://static6.businessinsider.com/image/4ebbd655ecad043e4100001a/chart.jpg" style="border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px;" /></div>
</td></tr>
</tbody></table>
<span style="background-color: white; font-family: arial, helvetica, sans-serif; font-size: 13px; line-height: 16px;"><br /></span></div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-39392489642200857092011-11-13T12:19:00.001+05:302011-11-13T12:20:03.001+05:30THE BULL BEAR DEBATE<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<h2 class="entry-title" style="background-color: white; font-family: arial, sans-serif; font-size: 18px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px; text-align: -webkit-auto;">
<a class="entry-title-link" href="http://pragcap.com/the-bull-bear-debate-a-complacent-market-or-a-resilient-market" style="color: #1155cc; text-decoration: none;" target="_blank">THE BULL BEAR DEBATE – A COMPLACENT MARKET OR A RESILIENT MARKET?<div class="entry-title-go-to" style="background-attachment: initial; background-clip: initial; background-color: initial; background-image: url(http://www.google.com/reader/ui/3904077461-entry-action-icons.png); background-origin: initial; background-position: 0% -413px; background-repeat: no-repeat no-repeat; display: inline; height: 17px; margin-bottom: 0px; margin-left: 2px; margin-right: 0px; margin-top: 0px; opacity: 0.4; padding-left: 16px;">
</div>
</a><span class="entry-icons-placeholder" style="display: inline-block;"></span></h2>
<div class="entry-author" style="background-color: white; color: #666666; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto; text-decoration: none;">
<span class="entry-author-parent">by <span class="entry-author-name">Cullen Roche</span></span><div class="entry-likers" style="display: inline-block; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px;">
</div>
</div>
<div class="entry-debug" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto;">
</div>
<div class="entry-annotations" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto;">
</div>
<div class="entry-body" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px; padding-top: 0.5em; text-align: -webkit-auto;">
<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
<div class="item-body" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
This morning’s Barrons had a <a href="http://online.barrons.com/article/SB50001424052748703893804577024223213438312.html?mod=BOL_hpp_mag" style="color: #1155cc;" target="_blank">good piece</a> by Michael Santoli discussing what he refers to as a market “held hostage” by Europe. And it very much is. Mr. Santoli cites the bull-bear debate surrounding this environment:<br />
<blockquote>
“The crux of the bull-bear debate today, then, is whether the market’s perseverance is best compared, in boxing terms, to a resolute fighter with an iron jaw or a punch-drunk tomato can without enough sense to go down. This can be a fine and imprecise distinction, and the first condition can morph into the second with one blow too many. But when a market refuses so many perfectly good excuses to collapse for good, its resilience probably deserves the benefit of the doubt.<br />
As put on Friday by veteran market strategist Vince Farrell of Ticonderoga Securities:<br />
“The market seems to handle whatever [is] thrown its way. The Greeks tried to take the system down, but it looks like, as the Spartans of old, they are being carried back on their shields. The Italians are hoping the full [Mario] Monti will pull a bunch of technocrats together and muddle through. U.S. economic news, on balance, continues to improve. Inflation came off the bubble in China and some are guessing the government will ease [interest rates] a bit by the end of the year.”</blockquote>
So, is the market resilient or complacent? I don’t think it’s either. For once, the market is acting quite rationally. The concern in Europe is that the EMU’s leaders will let everything collapse. This worst case scenario is incredibly frightening from the market’s perspective as it has the potential to cause a 2008 repeat. So, when the news headlines appear to hint at Europe falling apart the market rightfully craters. And when the worst case scenario appears to be off the table the market rallies back. Despite the market’s fairly rational response so far, we are likely to remain hostage to the Euro crisis until a real fix has been implemented. Don’t hold your breath on that….</div>
</div>
</div>
</div>
</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-34935689281463706482011-11-12T14:25:00.001+05:302011-11-12T15:17:55.060+05:30Confused?<div dir="ltr" style="text-align: left;" trbidi="on">
November series has been extremely tough for traders, especially for momentum traders who try to follow a trend, play break out and rely on a fast moving market. If you are caught wrong footed on a position or just confused as to what side to take, well welcome to the party.<br />
<br />
The prime reason for this extraordinary environment is the increased focus of market and more so the media on news coming out of Europe. None of us know how long this will carry on, but it surely has become a joke to some extent. Things will sooner than later come to a break point when market will decidedly act.<br />
<br />
I am trying to see how the Institutional Investor are playing this Market.<br />
<br />
The chart below shows FII Index futures and equity action of FII as well as DII. The upper panel shows Long and Short position build up for each day and cumulative as well. The lower shows how much FII and DII have bought or sold in equities.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhK3vWsqUJpxB9oqfmdzs7mtDpNgpLg87NKX9rzN4rTrBsfIslZFyxle7JWEntP4R_oEe-G4YTVQfDQhqtM4UFbWAtrMhJGyzPn_BHlIOgIclKDct_eu9OlS34LtW2tPfrZnGauTsayKPQ/s1600/untitled.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="496" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhK3vWsqUJpxB9oqfmdzs7mtDpNgpLg87NKX9rzN4rTrBsfIslZFyxle7JWEntP4R_oEe-G4YTVQfDQhqtM4UFbWAtrMhJGyzPn_BHlIOgIclKDct_eu9OlS34LtW2tPfrZnGauTsayKPQ/s640/untitled.JPG" width="640" /></a></div>
<br />
<br />
As seen from the chart FIIs added a whole lot of Longs and got rid of their Shorts on expiry day 25th Oct when Nifty rose by 94 points. They also bought decently in equities, though the DIIs sold it to them. So at this point of time we can expect FIIs are the ones who are bullish and DIIs bearish.<br />
<br />
Focus on 28th Oct, when Nifty did a huge gap up and closed 159 points up. FIIs added more longs and got rid of shorts again. They also did a tremendous amount of equity buying, much more than DIIs supplied them. Funny thing to note: that level of Nifty has not been reached again.<br />
<br />
The FIIs have since then (till 4th Nov) did nothing significant, except for reducing the longs. And on 8th and 9th Nov bought equity and increased longs, DIIs meanwhile are doing their selling.<br />
<br />
Now come to what happened on 11th Nov, when Nifty closed on 5170, over 200 points below the Intermediate top. FIIs are suddenly cutting their Longs significantly and what more there are signs of Short addition. There is not much equity action, but its generally seen that equity action by FIIs lag their derivative action.<br />
<br />
So are the FIIs finally given up on their bullish stance? Or this action on Friday just a one day panic. We will get clues for this in the coming week. To make things interesting US markets have rallied strongly on another set of news coming from Europe!<br />
<br />
If we see FIIs shifting to bullish mood again next week, we can expect 5400 to be taken out in near future. But if we see the rally in global markets being ignored and sold into by the FIIs, there is a huge chance of this being another bad series for Nifty. Note how DIIs have not at all shown interest in buying, which shows they are expecting lower levels again. My friends at Vtrender also point out how DIIs sell at market tops.<br />
<br />
One thing is for sure DIIs are more sure about what they want to do in this market! FIIs were bullish, but looks like they may change their opinion. Whatever happens, one thing is for sure, these are extremely confusing times and everything depends on how the news flows, which is never a good time to be in the Market.</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com1tag:blogger.com,1999:blog-8196206213760518091.post-25575144697104649442011-11-10T14:41:00.000+05:302011-11-10T14:43:05.284+05:30Does It Matter If Stocks Are Cheap?<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<h2 class="entry-title" style="background-color: white; font-family: arial, sans-serif; font-size: 18px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px; text-align: -webkit-auto;">
<a class="entry-title-link" href="http://pragcap.com/does-it-matter-if-stocks-are-cheap" style="color: #1155cc; text-decoration: none;" target="_blank">DOES IT MATTER IF STOCKS ARE CHEAP?<div class="entry-title-go-to" style="background-attachment: initial; background-clip: initial; background-color: initial; background-image: url(http://www.google.com/reader/ui/3904077461-entry-action-icons.png); background-origin: initial; background-position: 0% -413px; background-repeat: no-repeat no-repeat; display: inline; height: 17px; margin-bottom: 0px; margin-left: 2px; margin-right: 0px; margin-top: 0px; opacity: 0.4; padding-left: 16px;">
</div>
</a><span class="entry-icons-placeholder" style="display: inline-block;"></span></h2>
<div class="entry-author" style="background-color: white; color: #666666; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto; text-decoration: none;">
<span class="entry-author-parent">by <span class="entry-author-name">Cullen Roche</span></span><div class="entry-likers" style="display: inline-block; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px;">
</div>
</div>
<div class="entry-debug" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto;">
</div>
<div class="entry-annotations" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; text-align: -webkit-auto;">
</div>
<div class="entry-body" style="background-color: white; font-family: arial, sans-serif; font-size: 13px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; max-width: 650px; padding-top: 0.5em; text-align: -webkit-auto;">
<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
<div class="item-body" style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
<div style="margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px;">
There seems to be a never ending debate these days about the “value” of the market. The bulls cite trailing earnings to show low valuations while the bears generally cite forward earnings or cyclical data as evidence that the market might be expensive. I’ve never found much value in P/E ratios or other such “value” metrics for that matter. And honestly, unless you’re Warren Buffett or a hedge fund with access to the Board of Directors or other inside info you’re battling armies of analysts using the same metrics in the same manner. The odds of you finding a diamond in the rough using P/E ratios or similar valuation metrics is frankly, very low.<br />
And now, an interesting bit of research from <a href="http://thedraconian.com/" style="color: #1155cc;" target="_blank">Draco Capital Management</a> shows that investors might place far too much emphasis on the “value” of the market. In fact, their research shows that it’s nearly impossible to decipher future returns using present valuations (via <a href="http://advisorperspectives.com/commentaries/draco_110711.php" style="color: #1155cc;" target="_blank">Advisor Perspectives</a>):<br />
<blockquote>
“But let me run you through a few charts that may raise some questions about your blind faith in the Price-to-Earnings multiple, the most popular way of measuring value.<br />
What this first chart does is take a snapshot of the market’s P/E ratio on January 1, 1900. Then it fast-forwards three years to see how much money you made or lost if you made an investment in the Dow. Those two pieces of data become one little dot on our scatter-plot chart. I’ve plotted points for every month in the 20th and 21st centuries.”<br />
<img alt="" height="354" src="http://pragcap.com/wp-content/uploads/2011/11/draco1.gif" title="draco1" width="485" /><br />
“In this chart we’re relating <em>present </em>valuations to <em>future </em>returns. We’re checking to see if buying the stock market when it’s cheap translates into profits down the road.<br />
Over a three year window, the data tell a fairly convincing story. Valuations matter a lot less than we’re comfortable admitting. As indicated by our regression line, there is a modest correlation between present valuation and future return, but with an R-squared of 0.03, it should be ignored. So there you go.<br />
<strong>Over a 3-year window, there is <em>no correlation</em> between ttm P/E’s and the degree of future profitability</strong>.”</blockquote>
They ran the same data over a longer period. The results were pretty similar:<br />
<blockquote>
Let’s broaden our window a little further. Let’s widen our scope to 10 years. Does buying stocks when they are particularly cheap translate into more profitability for the coming <em>decade</em>?<br />
<img alt="" height="346" src="http://pragcap.com/wp-content/uploads/2011/11/draco2.gif" title="draco2" width="475" /><br />
“The visual correlation is a little more clear. Our R-squared is a bit higher but is it even at the level where it’s statistically meaningful? I’m still not sure I’m prepared to say that buying at lower multiples translates to higher profitability.<br />
I feel good about saying one thing, though. There are few guarantees in this business, but — surprise! — if you buy stocks when they are craaazy cheap and can hold onto them for 10 years, the odds suggest you’ll make money.”</blockquote>
Their conclusion:<br />
<blockquote>
“1. Correlation between earnings multiples and subsequent returns is loose. Statistically speaking, it’s almost non-existent.<br />
2. Unless you’re dealing with long holding periods, pretty much any outcome is in play. Markets that are historically cheap can get a lot cheaper and take a lot longer than most humans are comfortable waiting before swinging back into profitability.<br />
3. In truth, this kind of analysis is only really useful during a few select moments in history. It’s only helpful at identifying extremes when the probabilities start to skew in the rational investor’s favor. The problem is that during those extremes is when the fewest number of investors are bothering with this type of analysis. They’re lost in all the other noise of the moment. They’re buying tech stocks in 2001 because, <em>it’s the future, maaan</em>! Or they’re cowering in their bunker in 1948. Or broke in 1933. Or high on the Nifty Fifty in 1965, among other interesting things.”</blockquote>
As they say, past results are not indicative of future returns. Beware of those data mining using the rear view mirror. These various valuation ratios might make the average financial advisor sound smarter than the average bear, but that doesn’t mean he/she is utilizing information that will necessarily lead to superior returns….</div>
</div>
</div>
</div>
</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-78416988281840331452011-11-06T22:36:00.000+05:302011-11-06T22:36:03.183+05:30Dollar Bull Run?<div dir="ltr" style="text-align: left;" trbidi="on">
The USD-INR chart shown below looks very bullish. After doing a perfect 62% retracement and finding support at the 44 mark dollar is strengthening. I would expect some correction or consolidation and then another rally till 52.<br />
<br />
The rally from 39 to 52 looks very impulsive to me, and I would expect the next rally to be the same with base target of 57 and then to 65 in long term. Which actually paints a very bearish picture for equities and commodities.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQT5aBKj37ZUgpESCJAljeyJ_eCmi_kEqixUCfPeamSQtBVuqs7BUr3lZQFOS4aPGKP3gNc-0nJTN6BWyqVXXky_Ay1E1FVIPwGwhnDDZrfgNIF0R-zCK_MZJl59ZzUfumNq4bQ52-lN8/s1600/untitled.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="416" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQT5aBKj37ZUgpESCJAljeyJ_eCmi_kEqixUCfPeamSQtBVuqs7BUr3lZQFOS4aPGKP3gNc-0nJTN6BWyqVXXky_Ay1E1FVIPwGwhnDDZrfgNIF0R-zCK_MZJl59ZzUfumNq4bQ52-lN8/s640/untitled.JPG" width="640" /></a></div>
<br /></div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-74928343662451164122011-11-05T14:24:00.000+05:302011-11-05T14:24:47.656+05:30Nifty : Internal Check<div dir="ltr" style="text-align: left;" trbidi="on">
Time for some home grown charting!<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwIsc_Om_9dfegnKMtbCFYzce0POyk7vxakZRYcJnfR0uyxCqK2lEsz6CdVkjeo3qph2pCns5N9L4dmhI4eU1y5TmNc14QXm2jP33da76MEZ4R71FNaXfG5t6dtuWdmN_8tcbcrkvX3_8/s1600/untitled.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="227" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwIsc_Om_9dfegnKMtbCFYzce0POyk7vxakZRYcJnfR0uyxCqK2lEsz6CdVkjeo3qph2pCns5N9L4dmhI4eU1y5TmNc14QXm2jP33da76MEZ4R71FNaXfG5t6dtuWdmN_8tcbcrkvX3_8/s400/untitled.JPG" width="400" /></a></div>
<div class="separator" style="clear: both; text-align: center;">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJXVGtCmOAnzAkWpErvRxmQcmSBGYPB37NacbNpGDP_maUqRLab9LGX015mtEyLqpESTxqmCH5lHANYUx0KPidoZJteXrDA-_jtSbCdIxy-dRjAC9S2oY4J4IYfJqooLFCVE64r3bsVD4/s1600/untitled.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="217" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJXVGtCmOAnzAkWpErvRxmQcmSBGYPB37NacbNpGDP_maUqRLab9LGX015mtEyLqpESTxqmCH5lHANYUx0KPidoZJteXrDA-_jtSbCdIxy-dRjAC9S2oY4J4IYfJqooLFCVE64r3bsVD4/s400/untitled.JPG" width="400" /></a></div>
<div class="separator" style="clear: both; text-align: center;">
<br /></div>
The upper chart shows how Breadth of the market defined by Advance minus Decline and as seen its not going anywhere, so some kind of break out in near future should be expected.<br />
<br />
The lower chart shows Close - Weighted price of Nifty. I have noticed earlier and marked again how this kind of negative divergence has lead to fall in market.<br />
<br />
Combining the findings of the two and monitoring them in future if Nifty moves down and there is a break down in breadth. Look out below!!</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com1tag:blogger.com,1999:blog-8196206213760518091.post-43711399161926516732011-10-29T14:03:00.000+05:302011-10-29T14:03:07.724+05:30Nifty : Trend Line Attraction ?<div dir="ltr" style="text-align: left;" trbidi="on">
Recent rally has been a typical example of how stocks climb a wall of worry. There has been a sudden shift in sentiment though after yesterday's 3% rally. Now all the lower targets has been replaced by higher targets. Lets look at a chart to get some idea where we are technically.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgCJb7RDk4eIZNJQcWKU_l8xL2P_DidAxJV9FKEybopQt1zVQjJ_c4TrFy_IrLCKjoHyHeu3zruXDeiwaxv264vIZvQ1aJLwFCyKO0QtNsNmlynxahHzfRIVmaa78GoQnzkkuwjze3gNes/s1600/untitled.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgCJb7RDk4eIZNJQcWKU_l8xL2P_DidAxJV9FKEybopQt1zVQjJ_c4TrFy_IrLCKjoHyHeu3zruXDeiwaxv264vIZvQ1aJLwFCyKO0QtNsNmlynxahHzfRIVmaa78GoQnzkkuwjze3gNes/s400/untitled.JPG" width="400" /></a></div>
<br />
<br />
The above chart shows Nifty (blue) and advance decline line (red). First lets focus on Nifty closing price, it clearly looks to be bound in the channel (black and green trend lines). There was a false breakdown late August, but respected in early October. Now Nifty is targeting the upper trend line around 5450-5500. If you notice, this trend line has resisted Nifty on 3 different occasions. So we can surely consider it to be a strong resistance. The red advance decline line has been falling consistently, we can argue it has bottomed, but will have to wait for further confirmation.<br />
<br />
What can we expect from here on. Firstly, the test of the upper trend line by Nifty looks inevitable. So 5450 give or take some points is very much to be expected in near term. Now comes the difficult part, Nifty has been overbought in all smaller time frames other than weekly. So ideally we can expect Nifty to halt or maybe even correct (especially near a strong resistance) some amount to get rid of these overbought conditions. I would say even a retest of 5180 ( the break out area) might be possible and should be good for longer term bullish scenario. Though if sentiment remains bullish we may never see these levels and a 5250-5300 would be enough of correction. We can expect another stronger wave of buying from these levels, one which should see the upper trend line broken, which means 5700 as first target and 5900 as second. I believe even new highs are possible once the trend line is broken with strong volumes. Though it will take its own time.<br />
<br />
Next possible scenario for me would be test of upper trend line and then back to the test of lower trend line, which would be much below 4700, I think 4500 would be a good enough target for it, if not lower. In that case these two trend line will still remain in play for future.<br />
<br />
There is yet another scenario which I can come up with, which would be this rally to carry on without any pause at the trend line. This would be the most difficult one to play as logic would be overtaken by emotions. I feel in that case the rally can keep going on much higher or after sucking a lot of panic buyers Nifty will succumb under its own weight of expectation and fall below the broken trend line and keep falling much lower<br />
<br />
Lets see if any of these happen or there is some other trick under Mr. Markets sleeve. As I always say, its not about getting your technical study right, its about being ready for any drama that unfolds. Being a trader, I keep my bullish hat close and bearish closer!<br />
<br />
<br /></div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com1tag:blogger.com,1999:blog-8196206213760518091.post-13818673602224847452011-10-24T00:00:00.001+05:302011-10-24T00:00:30.710+05:302008 Redux<div dir="ltr" style="text-align: left;" trbidi="on">
Came across many posts which compared the current technical structure of S&P 500 with that of 2008 pre Lehmann structure. I thought it would be interesting to do a similar Nifty study. I hardly believe these kind of studies make sense, but they definitely make a good story!<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvLBTkhMF-m2X0dKTD9Ijfid55SEgtGteUhH2rP-uP5XnBBIt_Q0ycFAbLz5x8Zj-JT-zQ3xXSkx5X5S2VRiEQ86lBKmEqM5a3bXi8crFYLIvpAKvGaADn6uQSImfKIZpWtUKESEoTh98/s1600/untitled.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="363" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgvLBTkhMF-m2X0dKTD9Ijfid55SEgtGteUhH2rP-uP5XnBBIt_Q0ycFAbLz5x8Zj-JT-zQ3xXSkx5X5S2VRiEQ86lBKmEqM5a3bXi8crFYLIvpAKvGaADn6uQSImfKIZpWtUKESEoTh98/s400/untitled.JPG" width="400" /></a></div>
<br />
<br />
If you look at the chart above and focus on 2008 structure, we see that after a strong correction from 6300 to 3800 in 6-7 months, Nifty staged a strong comeback from 3800 to 4600 in few weeks and I am sure looked strong enough for more rally. But there was hardly any followup buying after the initial correction and soon Nifty did a nosedive. Obviously there was the panic of Lehmann bankruptcy to spook it.<br />
<br />
The current structure though have a similar pattern like the placement of price in comparison with 20 and 50 week SMA. MACD which being the derivative of price has to follow the same pattern. The most obvious difference is the fact that this correction has been much slower and on lower volumes.<br />
<br />
Another point of debate could be the fact that Lehmann collapse took almost everyone by surprise (can't say many people expected it) but the current Greece situation has given enough time for bears and bulls to assess the situation.<br />
<br />
So will history repeat itself in coming weeks or will this pattern fool its watchers?</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0tag:blogger.com,1999:blog-8196206213760518091.post-78974742710615521712011-10-15T22:16:00.001+05:302011-10-15T22:16:19.688+05:30PCR For Breakout ?<div dir="ltr" style="text-align: left;" trbidi="on">
There is something about October Series which doesn't want me to believe the data! Nifty had a terrible August and a poor September, the start of October wasn't great and people (including me) were expecting 4500 to be tested soon and some even went ahead to say 4300 on camera! Overall sentiment was very pessimistic and that made difficult for Nifty to move lower.<br />
<br />
But market always has a mind of its own. And it will punish the majority severely during turning points. The rally Nifty has seen has been spectacular to say the least. Cutting the prelude, let me immediately come to the point which I am observing here.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjstx1GW7cDrhs8E_2ieCvgfrnNn2iGBm8n5aeoh2gnMSWGfnjv8lUSfxhg5VReXzmo_5moi_83C_b6ZqRbMWJ26BYxqsAl-HKN9spM9uOLQEHz2y67oJRXGckrPJ1yZxHyuYEcjO2bDSo/s1600/untitled.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="315" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjstx1GW7cDrhs8E_2ieCvgfrnNn2iGBm8n5aeoh2gnMSWGfnjv8lUSfxhg5VReXzmo_5moi_83C_b6ZqRbMWJ26BYxqsAl-HKN9spM9uOLQEHz2y67oJRXGckrPJ1yZxHyuYEcjO2bDSo/s400/untitled.JPG" width="400" /></a></div>
<br />
<br />
The above chart is Nifty Vs Near Month Expiry Nifty PCR (Put Call Ratio). The upper panel shows PCR while lower has Nifty, the vertical lines are expiry dates. Focus on the upper panel for the time being. It shows Nifty PCR at a level not seen since June and March expiry (Red Lines). The June instance is on a day before and on expiry day. While March instance is few days before the expiry. Considering we have 7 trading days still left for expiry, I am concerned about the optimism that has got built. Though build up of optimism is not bad, especially in option space, we should take this with a pinch of salt.<br />
<br />
Now check what happened on Nifty during the March high PCR instance (I ignore June series as its too close to expiry and squeeze is expected from the losing side), Nifty almost went vertical from around 5550 region to close around 5800. Also note how it broke out from the resistance around 5550 (blue line) which had stopped it 2 times earlier (3rd time lucky?). Now doesn't it look very similar here in October series?<br />
<br />
Breaking out of 5180-5200 zone by Nifty will surely make a strong case for another 200-300 point in this series itself. But could there be false break out given the news driven environment? Very much so, especially if there is no consolidation below this resistance. The rally here has been incessant and needs some more time to digest the current gain. But as in Life and so in Markets anything can happen! The inclination is for the long side, but there is something which doesn't want me to believe the data!</div>Tarique Anwarhttp://www.blogger.com/profile/08058330089920348037noreply@blogger.com0