Warning Signs

[uasish]

jatayoo,
Most Analysts be they FA or TA take recourse of a 'Fail Safe' prediction Module by extending the Time Frame.As Time of 'Y' axis tends to Infinity the 'Volatility' or Shake-Out diminishes significantly.
Here in this August Forum there are peoples working Day & Night to Scale Down the Time Frame to Minutes level & trying to get a Probability Edge on their side.Means they are trying to get the Best from that Oscillation,if they succeed (many traders world wide have been able to harness that),then CAGR
& other Skewed parameters will be Insignificant & will seem a Mockery,let us shower them with all our good wishes.
One such attempt .
http://www.traderji.com/103363-post87.html

Asish

 

[uasish]

rajaram.dilipkumar,
We are here to Earn money,whatever method you use to Earn is Ok,plz dont get swayed away with 1 or 2 observations ,it seems you are exposed to modern day Data Analysis,hence i need not point out the Myth of 'Correlation' in 'Financial Time Series Data' ,until it is Analysed scientifically.

Asish

 

[shashank]

At these higher levels of the market, there are two things of note: negative breadth and 20 day high lows. The A/D has slipped into negative zone and so is the number of stocks making 20 days high minus 20 days lows- ie more stocks are making 20 days lows than highs. This may not mean much, given the amount of liquidity driving the markets, but is worth a look. Figures are for NSE.

ss

Thanks Sunil!

 

[rajaram.dilipkumar]

rajaram.dilipkumar,
We are here to Earn money,whatever method you use to Earn is Ok,plz dont get swayed away with 1 or 2 observations ,it seems you are exposed to modern day Data Analysis,hence i need not point out the Myth of 'Correlation' in 'Financial Time Series Data' ,until it is Analysed scientifically.

Asish

ya we are here to learn and earn.....and as u pointed out these are just observations but P/E , USD/JPY , FII/MF activity vs nifty movement & liquidity are useful indicators but yes more research needs to be done and i may need your help in testing some of these indicators ..

 

[uasish]

The Forum is for that only.

 

[kkseal]

One clarification on the Yen carry trade

Even if the BOJ were to keep int rates unchanged, wouldn't the appreciation of the Yen against the dollar adversely affect carry trade players (less dollar for every yen borrowed and higher repayment obligations)?

Regards,
Kalyan.

 

[kkseal]

At these higher levels of the market, there are two things of note: negative breadth and 20 day high lows. The A/D has slipped into negative zone and so is the number of stocks making 20 days high minus 20 days lows- ie more stocks are making 20 days lows than highs. This may not mean much, given the amount of liquidity driving the markets, but is worth a look. Figures are for NSE.

ss

Narrow breadth with higher F&O turnover. Although cash t/o has also increased the lev ratio is hovering around 6. Most of the action is around F&O stocks (though this is a perpetual feature of Indian mkts). FIIs seem to be buying, but i suspect most of these are of the quickfire hedge fund types.

However the rise in F&O vols & Lev ratio happens around expiry; so let's see if things get more normal in coming days.

The Stock PCR today is at 0.36 (anything below 0.3 would be 'euphoria zone'). However the Nifty PCR is around 1.75, so hedging levels are also high.

Regards,
Kalyan.

 

[kkseal]

Useful info,have you studied this on Sensex & what was the corresponding P/E there on both those occasion.

Don't know about historical lvls but last year the peak PE of Sensex was 23 (a tad higher perhaps). The previous year it was 21, so there has been a 10% rerating. This year we may see a peak of 25.

The combined EPS for Sensex stocks in FY-08 is likely to be around 825-850. So with a PE of 25 the level for Fy08 come to 20k+!! Oh no, i must be crazy!!!

Regards,
Kalyan.

P.S. : Better to remain prepared for 12k than think of 20k at this stage

 

[rajaram.dilipkumar]

One clarification on the Yen carry trade

Even if the BOJ were to keep int rates unchanged, wouldn't the appreciation of the Yen against the dollar adversely affect carry trade players (less dollar for every yen borrowed and higher repayment obligations)?

Regards,
Kalyan.

absolutely right...infact rumours that BOJ is about to hike rates has triggered the current appreciation of yen from 124 to 120 levels ........any rate hike will lead to further appreciation(as more dollars will start flowing in to the japanese economy which will put upward pressure on the local currency) and thats the only thing that has the potential to spoil this bull party.

 

[kkseal]

absolutely right...infact rumours that BOJ is about to hike rates has triggered the current appreciation of yen from 124 to 120 levels ........any rate hike will lead to further appreciation(as more dollars will start flowing in to the japanese economy which will put upward pressure on the local currency) and thats the only thing that has the potential to spoil this bull party.

Yeah, you're right; the bear mode (& what's worse it might be a long-drawn 'structural' one) that the dollar seems to have entered into is the only real threat. Most central banks will be caught between the devil & the deep sea - inflation on one hand (worsened by oil prices) & currency appreciation on the other (& most elected govts would sacrifice the currency on the altar of inflation to keep their 'aam-admi's happy)

Regards,
Kalyan.