Food for Thought........!

Discussion in 'Derivatives' started by S S, Aug 16, 2008.

  1. S S

    S S Well-Known Member

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    Hi!

    I have invented a new term Inverted Investor

    How can an Investor be Inverted?

    To understand this, let us first understand about Bulls and Bears

    It is a common mis-understanding that there is a separate group called Bulls who wants to take the markets up and another group called Bears who wants the markets to fall. There are no such two groups. The ground reality is very different.

    Almost everyone who first enters the Stock market, it is in the Equity market by Investing in one or the other scrip that one fancies. Each of such persons wants the markets never to fall and keep going up and up, so his investment appreciates.

    But that does NOT happen. Markets fall when profit booking takes place. Profit booking is essential. Having bought a stock for Rs 100 that is now trading, say at Rs 5000, one can remain happy, but may get a shock if markets have a steep fall that takes this scrip down to say, Rs 1500.

    If profit was booked at Rs 5000, then the same stock could have been bought back at 1500. So one has the stocks and also has additional money @ 3500 per share. One is happy.

    This is possible through technical analysis, that tells the probability of the markets [and the stock] getting corrected and the targets thereof.

    As the downward correction starts, all the Investors [with exception of many] book the profits and get out. And mostly stay out, unless they are sure that markets have once again started going upwards. The unfortunate ones remain invested an blame their bad luck.

    These all are Bulls. Wanting the markets to go up.

    But there is a group of people, who, possibly know nothing about the analysis of any kind, BUT are backed by a team of expert analysts. Here I mean the Expert Analysts, and NOT the charlies talking with Udayan & Co on TV channels.

    These guys, having worked out a major support level, want to test it thoroughly. So, they make a severe attempt in breaking it. If they are successful, they go for the next support level, and repeat the procedure. In short, these guys have the required financial backing and the technical know-how for anticipating the bottom, for bottom fishing. We all CANNOT do it.

    These are the Bears. And as soon as they are un-successful is breaking a support, they realise the importance. If, after trying hard, the support does NOT get broken, it is less likely, that it shall get broken by itself.

    This is where the whole group changes its Bear tactics to Bull tactics and goes on a rampant buying spree, which shoots the markets up rapidly. This is a clear signal to all those on the fence, who also jump in and buy, which pushes the market still higher up.

    This is how I look at Bulls and Bears, who are essentially from a single group with large financial and technical abilities.

    We all know what an Investor is. Now let us take an example, to know what I mean by an Inverted Investor

    This year in January, the markets were at the top. Then as the downward move started, the above mentioned group should have noticed that the top was the hard resistance that could NOT have been broken, and there shall be a steep fall in the market.

    So, lets say that 2 lots of Nifty futures [100 points] were sold for Jan 2008, and also for each of the subsequent months of Feb, Mar. Dec 2008, then approximately 12 lac rupees would have been the margin money requirement.

    As per the perspective that appeared in Jan 2008, that most of the futures for all the months, were running in the vicinity of 6000 Nifty.

    Calculate the earnings, if the person does NOT do anything during the whole year till the last day of the year. He would be just sitting tight and laughing at others.

    Or maximum, he would roll over his from Jan to Feb to make 200 points for Feb, then Feb to March to make 300 points for March and likewise, based on the output of Technical analysis group that is supporting him.

    Throughout the year, he has invested negatively, by selling futures well in advance, and has made better than the others.

    During the Bull run from 2003-04 to 2007, those who remained invested since 2003 earned far better than those who traded.

    During the current Bear run, this Inverted Investor would have earned likewise. Far better than all the traders.

    This thought came to my mind late. Obvious. I am NOT the expert ;-(

    But some of the members who are learning the analysis today, may have a chance to face yet another Bear run many years from now. They have sufficient time to develop expertise to sense it and become an Inverted Investor, to take advantage of it.

    Good Luck. Nothing personal to anyone. Just my Brain Storming J

    Cheers!
    SS
     
  2. S S

    S S Well-Known Member

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    Hi!

    Attached is the Weekly chart for Nifty as at the close of Friday, 5th Sep 2008.

    The Red line is the 10 days EMA, which continues to slope downwards. The bodies of the candles for last two weeks are also falling below the 10DEMA Red line.

    Two Indigo coloured lines are the Bollinger bands, which continue to slope downwards, but while doing so, have contracted and come inside the 2 Keltner bands, shown in Yellow colour.

    The High and the Low for the next week shall depend upon the volatility prevailing in the next week. The body of the candle is expected to be in line with the last week, but at a little lower level.

    F&O is speculative market. So the speculation for the near future, as per the probabilities appearing from the chart, is as follows :

    Possibility I

    The sub-wave iii [after the sub-wave ii appearing last in the chart] is expected to try for the recent low of 3790 of 18th July, or may get settled at 127.2% level of about 3900.

    The sub-wave iv thereafter, is expected to remain well below the level of sub-wave i , which is 4230. The target could be 4200.

    In such a case, the sub-wave v may turn out to be a diagonal triangle having 3235 as the target.

    Once this gets achieved, the markets shall very quickly shoot up to the level of sub-wave 4 [expected in 4200 region]

    Possibility II

    The sub-wave iii may turn out to be the longest of the five wave structure, and may come down almost to 3235 level.

    Sub-wave iv may remain below 3790.

    The sub-wave v in such a case may observed to be a truncated wave, that shall have termination in the same region of the sub-wave iii

    For the Development after the completion of the five wave structure, it shall be too early to comment in this scenario.

    This is my opinion based on my observation, and I could be wrong. Comments, invited.

    Cheers!
     
    Last edited: Jun 30, 2010
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  3. S S

    S S Well-Known Member

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    Through oversight, this message was posted on 8th Sept elsewhere in some in-appropriate thread, which has now been moved here along with it's attachment.

    The content of the message is in-tact. The US markets on Tue 9th Sep have NOT opened strong, and are with the down trend.

    It is less likely that Asian markets remain strong tomorrow. Personally, I am sure that Nifty would be fighting to remain above 4420 to start with, and if fails, then holding 4400 shall also fail.

    I could be wrong in my analysis, but it does NOT stop me from wondering about the people talking confidently about 5000 and above levels in the near future. I feel otherwise.

    Cheers!
    SS
     
    Last edited: Oct 10, 2008
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  4. S S

    S S Well-Known Member

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    Hi!

    Over the last weekend, on Friday 5th Sept 2008, I had clearly stated, and I quote :

    The sub-wave iii [after the sub-wave ii appearing last in the chart] is expected to try for the recent low of 3790 of 18th July, or may get settled at 127.2% level of about 3900.

    Today, I am attaching the daily chart for Spot Nifty, as at the close on Friday 12th Sep 2008.

    With (b2) as the Head, the Head and Shoulder pattern has worked out beautifully. One more day in the downward direction for the Nifty to close below the neckline, and the probability worked out last week, shall be the target.

    In short, if and when the neckline gets broken, the Nifty shall be heading for it's first target of the recent low on 18th July 08, that is, 3790. This move shall be in up & down waves, as always.

    And therefore, after the neckline is successfully broken, once again we have the opportunity to short on rise, and cover as the market falls.

    Happy Trading without Investing. Good luck. Cheers!
     
    Last edited: Oct 10, 2008
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  5. S S

    S S Well-Known Member

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    And the wekend has a lot more news, not encouraging though.

    US has cyclonic floods.
    China has earthquake.
    Delhi has bomb blasts.

    What more needed for the market sentiment?

    And market defies expectations in general. So, the markets may move a little upwards on Monday 15th Sep 08.... repeat may move upwards, temperorily.

    But there is hardly any good news. Therefore, the charts shall hold. In my opinion, the trend is till downwards and shall remain downwards untill the timewise and pricewise correction gets completed.

    Few more weeks/months to go. Then the correction may end and the markets shall commence their fresh sideways consolidation, timewise and pricewise. But it shall also end. That is when we jump in.

    Prepare from now on. The time available.... after the downtrend is over and the sideways movement there after is over, ... is going to be very very less. Start prepartation for getting the money ready to invest as an investor. A rare chance to get the appreacation of that investment in a too short time period is going to be available.

    VERY IMPORTANT NOTE : We shall shortly have the time to BUY Nifty futures, say at some level between 3235-3300. One has to then buy 2 lots for that month and for five more months thereafter, as almost all of them shall be available in the viscinity of 3300. Evenif one allows each of them to expire, there shall be a lot of profit available, without being greedy.

    One can then just sit tight, watch, enjoy ..... CNBC as well as various daily postings on Traderji, asking for supports, resistances and Pivots.

    Cheers & Good luck.
    SS

    NB : Attaching the chart of EOD Spot Nifty for 12th Sept again, as the last chat was faint.
     
    Last edited: Oct 10, 2008
  6. S S

    S S Well-Known Member

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    Hi!

    Spent some time in trying to find what others in this forum would be saying under different threads..... and got a Shock!

    There are people, who are confident that H&S pattern is actually BS [BullSxxt] and the markets shall prevail above 4200 today on 15th Sep 08.... now THIS, to me, appars more like BS.

    The Nifty Futures have opened over 200 points down in Singapore, which appears to be a little too much to me. Here on NSE, they may NOT suffer that bad. But I could be wrong.

    Then I came across a thread, where someone has been giving 'tips' for support-resistance-pivots-etc. Many have been asking him for these details, and also thanking him for his advise. Great! Now this guy asks, WHAT IS H&S? Oh my god......! He does not know. And not only people treat him as an expert but he also thinks himself to be an expert, without knowing the basic Fundas.

    Advising others without proper knowledge, in my opinion, is criminal. While trying to be famous in a short period of time, this guy does not realise that he may be making others loose their hard earned money, as a result of the confidence shown in the wrong guy.

    That is why I have chose a separate thread to comment.

    If you provide someone with a Fish, you feed that person once.
    But if you teach someone how to fish,you help him feed himself for his lifetime.

    And collecting rotton fishes from elsewhere and feeding them to others ... is a crime for sure.

    Nothing personal to anyone. Just general comments. I could be wrong.

    Cheers!
     

  7. S S

    S S Well-Known Member

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    More BAD news follows.

    Lehman Brothers, the FOURTH Largest Bank in US gets Bursted.

    Attached are two weekly charts.

    First weely chart is of Dow Jones as at the close of Friday 12th Sep 08. The Target for Dow Jones is clearly seen at 9830. Surely, it's NOT going to be there today or this week. But the US markets shall move downwards in waves, slowly... but may NOT be silently, as many would get hurt seriously.

    The Second weekly chart is of Nifty as at close today, 15th Sep 08. Now, one shall NOT have any doubts that the markets are going to drift down to Nifty's ultimate target of 3235, as of now. Hopefully, that may hold.

    Today, the Dow Jones is expected to open Gap Down near it's recent low of abpout 10800 or even lower.

    I sincerely pray to God that those self styled analysts and advisors in this forum in different threads, may please be granted wisdom, so they shall stop misleading others.

    I wonder, what has happened to all those, who took the advise given over last weekend in one such thread, that spoke about Nifty levels above 4200. God knows how many people lost and how much.

    Please take care of your hard earned money and THINK before taking any tips and/ or similar advises for making quick money. Chances are more for maaking "Lakh Ka Bara Hazaar"

    Cheers! Good luck!
    SS
     
    Last edited: Jun 30, 2010
  8. S S

    S S Well-Known Member

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    Hi!

    On 6th Sep 08, I had written following possibilities, and I quote -

    So far, so good. Nifty appears to be falling in line. For either of the two possibilities, it was essential for the Nifty to first arrive at around 3900, which it has. Hereafter, we now will have to find, which of the two possibilities actually results.

    Then on 15th Sep 08, my message said, and I quote -

    I was proved wrong there. Nothing to loose, though. The Dow did NOT open around 10800, but definately did go below it.

    For this weekend, I feel that on Thursday 18th Sep, the Indian markets may try to remain in green. There are 50% chances for doing so, and 50% for NOT doing so.

    The Friday, 19th Sep 08, as the most of the Fridays, may see a major profit booking to take the markets down further.

    The close on 19th and the behaviour on Monday 22nd Sep shall more or less decide, as to which of the two possibilities adhere to, unless some other news on the Global front raises a major havoc.

    Cheers! Good Luck. Happy Trading...... Get prepared for the 'Investment season' to commence shortly.

    SS
     
  9. S S

    S S Well-Known Member

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    Hi!

    So, today on Thursday 18th Sept 08, the Nifty actually came to the Low of 3799 instead of exactly matching it's recent previous low of 3790. That is still the common point for both the possibilities envisaged in earlier messages.

    If the first possibility is considered to be the one that gets resulted, then the Low of Thursday 18th Sept shall be the 'iii' on the chart.

    And then the upward move thereafter should take the Nifty to about 4220 level to end the 'iv' part of this wave.

    Today, already the Nifty has closed at 4038, covering the total fall all the way from 3799. What a recovery.

    And if the US markets provide help tonight, then Nifty can as well go to 4220 levels on Friday itself, that shall trigger-off the profit taking.

    Personally, I feel that such a rise to the levels of 4220 shall be a "Sucker's Trap" and all those who jump in to build long positions at this point shall get severely punished, when the Nifty zooms downwards next week.

    This is what I feel from looking at the charts.... but I could be wrong. This is a food for thought, and every one of us has been granted thinking power by the Great Almighty. Everyone is advised to use it and take appropriate steps as found fit.

    Afterall, it is your money, and any decision related to it's usaqge has to be decided by you and you alone.

    Be careful. Markets are going to be more and more tricky.

    Cheers! Good luck!
    SS
     
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  10. S S

    S S Well-Known Member

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    So the US Govt has once again tried to bail the US markets out. So far, so good.

    This automatically has resulted the upsurge for the US markets, which is likely [repeat likely] to get followed in the markets world over.

    Are these all signals pointing out that the worst is over?

    I have my own doubts, and I could be wrong.

    However, I still believe in the Dow target specified elsewhere above in this thread to hold good during 2008.

    Cheers! Be very extra cautious. One may not know, when the rug under one's feet gets pulled away.

    Take care.
    SS
     
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