Mother of All trading threads!- Stocks, Indices, Commodities and Currencies!

[nimish_rulz]

Shorted Vijay Bank again @ 62.30. It has constantly failed to move up yesterday breached on the lower levels too. This time going in with a deeper stop of 65.05. Target 57. Gujrat Nre Coke looking good solid call that. 3% profit in the bag already. Looking to buy Ceat tyres for a gain of 10-12 rs in 2-3 weeks. Good stock to hold long term with a PE of only 3.

 

[nimish_rulz]

Now look at this how many people follow this index. I do follow it but never realised the extent of correction. The Nifty in dollar terms recently fell 17% from the peak rather than 11% on the actual index. Now this makes an interesting read because FIIs and mostly outside investors care about dollar terms. The Defty almost touched feb lows similar to the dow and consistent to the Dow hitting 9800 which means it wasnt worth the FIIs to sell at these levels in the market I mean when Nifty was around 5000 levels but the value in dollar term was much lower so if FIIs had sold Nifty at that point they would have lost both ways lost money on the Ruppee and on the market. I hope you get my logic here.

 

[nimish_rulz]

Ok I haven't posted anything for a while now. Dow upside target met waiting for the downside to hit around 10,050 before a rally up to 10,750 by mid July. I am expecting a correction in order of around 30% on all the major indices around the world. This is because everytime in the bull market if it is India or anywhere we have had major correction because people start to worry about the growth and other economic aspects. That trend has started in US soon we will see India following on with bad IIP numbers etc. Fundamentally market is too expensive and it has been this way since october 2009 we will correct and bring fundamentals superior to the share price. This is the best time to go in cash even if you miss 10% upside let the uncertanity die. Cash is King. These bad economic numbers will soon be reflected in Balance sheets too. Half the major western indices comprise of companies that were bailed out and hence the major rally we had since these company had money with them. Now more pressure on the government itself these major companies will soon require to payback putting load on their own balance sheet. Anyways I am still sidelined and completely out of the market looking for market neutral strategies and enjoying the world cup.
Please remember every even year we do have a decline in range of 20-30% in a bull market. This can be seen in Indian market since 1991.

But this is not why I am posting the message today. Came across a brilliant video of Jim Rogers a great investor who with George Soros set up the quantum fund in the 70s and gave a return of 30% Compounded annually till 2000 when these guys retired.
Here is the link enjoy it:
http://www.youtube.com/watch?v=xDIGy6sVIUo
http://www.youtube.com/watch?v=Rrm7Tsen9LM
http://www.youtube.com/watch?v=9NN2ht-TLWg

Happy and safe trading. Don't be a sheep and follow everyone blindly. Always ask questions.

 

[nimish_rulz]

BTW guys also keep a good eye on the Spanish Bond Prices, Greek 10 Year bond prices and Italy bond prices. The prices have fallen off the cliff, the spread is going up German Bunds rallying and so is US. USD YEN in a clear downtrend all showing risk is being dumped whenever possible.
Greek Bond on May 25th when Equities made a recent low was 89 today it is at 74.76
Italy was around 102 today it is at 100.05
Spain was @ 100 and today it is @ 96.45

The previous bond prices posted by me can be found in Raunak's Nifty daily price analysis.
Also US 10yr treasury is around the same levels it was where it was on 25th May. US 5 year US 2 year treasury bill going up constantly and making newer highs made a low on 25th April and since then in a constant uptrend. When markets go down bonds of safe countries go up and emerging markets and low rated bonds tank hence greece tanking spain tanking and US and Germany are going up.
The 10 year bond hasnt gone up as much as 2 year because it works as a perfect set up for Market neutral hedge fund they short the long term bond as in long run IR are expected to go up and long on Short term fund as there is uncertainty and people will look for safe haven. Even if market reverse long term bond will fall more than short term bond as you know the short term future or predict it better than the long term. Hope that makes sense.

 

[nimish_rulz]

Ok I haven't posted anything for a while now. Dow upside target met waiting for the downside to hit around 10,050 before a rally up to 10,750 by mid July.

Target met today:clap: Now waiting for the clear direction. I am thinking about a strategy now to go long dow and short nifty double stakes. Confusion prevails at this point and now again it will be time to wait and watch. Dow is about to give a death cross 50DMA cross with 200DMA

 

[nimish_rulz]

The reason for the late rally in the Indian Equity markets and European markets was this news:

The European Central Bank lent banks 131.9 billion euros (USD 161.4 billion) in three-month funds on Wednesday, below expectations, as banks face the repayment of close to half a trillion euros in 12-month funds.

The ECB said 171 banks borrowed funds at a flat rate of 1% in the operation, which was below expectations in a Reuters poll for demand of 210 billion euros.

The amount is still the highest ever borrowed in a three-month operation but pales beside the 442 billion euros which 1,121 banks must repay to the ECB on Thursday.

This is considered positive by the market however for me this is a bearish news. The reason is that even though the loans made were below expectation the loans were made to some banks that shows that these 171 banks that took the loans are not in healthy position because the 3months Libor is around 0.7% and they are taking loans from ECB at 1% which means they can't access the local market due to bad credit position. I think when investors realise this we might soon see the gains disappear quickly from the European indicies.

 

[nimish_rulz]

The reason for the late rally in the Indian Equity markets and European markets was this news:

The European Central Bank lent banks 131.9 billion euros (USD 161.4 billion) in three-month funds on Wednesday, below expectations, as banks face the repayment of close to half a trillion euros in 12-month funds.

The ECB said 171 banks borrowed funds at a flat rate of 1% in the operation, which was below expectations in a Reuters poll for demand of 210 billion euros.

The amount is still the highest ever borrowed in a three-month operation but pales beside the 442 billion euros which 1,121 banks must repay to the ECB on Thursday.

This is considered positive by the market however for me this is a bearish news. The reason is that even though the loans made were below expectation the loans were made to some banks that shows that these 171 banks that took the loans are not in healthy position because the 3months Libor is around 0.7% and they are taking loans from ECB at 1% which means they can't access the local market due to bad credit position. I think when investors realise this we might soon see the gains disappear quickly from the European indicies.

As expected markets tanked. 2 most important days coming up for this year thursday and friday it will prove whether we stay in a bull market or turn into a bear market. Job number expectation is good but for me I remain very negative on it because government has laid off temp workers. But Lets see what happens.

 

[scplindia]

Nimish,

What Global Market does, India has its own path, Global cues are used for market opening or closing.

Agreed, the global markets have hit a bear phase, all of them are far below 200 DMA. India is far above 200 DMA.

Yesterday, we pulled up over a percent, how do you explain that. We should have atleast remained flat, there was no global cues suggesting over 1 percent pull up. The only cues we had was US Fut, and EU was trading 1/2 percent up. But these markets have fallen over 3 to 4 percent the previous day, compared to only 1.5 percent fall of Indian Market. There was also no positive news in India. Infosys was one of the companies responsible for the last min pull up. Yesterday, With BP cutting 10 percent of Budget and a major cut in IT spending, how do you justify the pull up of Infosys. Just because there was a sea of green in global indices, during close, Indian market ran up, even the percentage was not important, just the colour, that is the only justification I can find.

Infact, I have to confess that I lost money expecting Flat close, not such a huge last min pull up, that too above 5300 comfortably.

DOW was at 11600, we were just above 5350, now DOW is at 9800 we are just below 5350. Cleary shows that we are insulated from the Global Financial, Economic problems. I donot know how, but that is what markets are suggesting. You said 65 percent of GDP is from local consumption and only 15 percent from exports. May be that is the answer.

Cheers
Prem Kumar

 

[scplindia]

I wish to add one more point, in Asia, barring China and Japan, all other indices are not showing bear phase.

Because of this our morning fall is not steep to hit panic, and in the second half, the EU & US indices indcate bounce back and show green colour, so we recover.

 

[rajputz]

Nimish,


Yesterday, we pulled up over a percent, how do you explain that.

Hi Prem,

you might remember that i dont consider news while trading. purely charts. Day before yesterday was a turbo cci Slingshot for trend reversal on Nifty Spot EOD chart. And i stayed short cause system didnt gave any exit yet. If i go purely by indicators, the for me it was a bull trap yesterday.

As per raunak sir told me once with elliot wave analysis, that we are enetering a correction wave of 1-2-3. I think second leg has completed. And we are headed to downside now. Although there might be some fluctuation to upside also.

Check the charts: -

It can end any where near 4631. Although this is an assumption. I will go with the system to enter and exit.