Warning Signs

pshirurkar · #11 25th July 2007, 09:51 PM

Nice Study Mr Rajaram.dilipkumar,
Even After Such Alarming Signals Market Is Not Showing Any Sign Of Weakness, Is It Liquidity,fii Money Or Anyother Factor That Is Pushing The Market Upward?

rajaram.dilipkumar · #12 25th July 2007, 11:23 PM

Quote:

Originally Posted by pshirurkar

Nice Study Mr Rajaram.dilipkumar,
Even After Such Alarming Signals Market Is Not Showing Any Sign Of Weakness, Is It Liquidity,fii Money Or Anyother Factor That Is Pushing The Market Upward?

Infact looking at the data for the last two weeks , MFs have been busy selling ( nearly 800 cr in the last two weeks) and FIIs have been busy buying ( more than 13,000 cr) . Usually the market sentiment is a FII play.
I believe the next correction will happen again because of dollar-yen carry trade.Put simply, the dollar-yen carry trade implies borrowing at low interest rates in yen and using the loan to buy higher yielding assets elsewhere. Investors make their profit when they reverse the trade and pay back the yen loan. As long as the dollar appreciates against the yen and the bank of Japan leaves interest rates unchanged, the yen carry trade will be a huge positive for global liquidity.
In the last two years any correction of more than 5 % in any major indices ( barring china ) has been preceded by a rate hike in japan . Come august, the bank of japan is meeting again and there is high probability that the rates will be revised upwards...this could set-off the next big correction and i believe this sudden surge in liquidity is in anticipation of a rate hike . FIIs want to take maximum money home before the rate hike.

Infact, i wrote on this topic for Times of india - may 29 ,2007 edition and i have attached the unedited transcripts of the same in a word file . Also you can find the edited version in the below link..........http://www.timesyourmoney.com/fullAr...ue=may_29_2007

uasish · #13 26th July 2007, 12:09 AM

rajaram.dilipkumar,
Have read that report & also the report of the effect of $ Yen carry trade over US Mortgage Mkt & the Global cascading effect of this Cheap/Easy money when reverts back.
I am least bothered as a Trader ,any Buy/Sell signal when given by my s/w i will do accordingly.
I was interested in your observation of Nifty with P/E becoz in system building all type of datas are necessarily a prerequisite at least for MM & RM.
My trading experience says ,price oscillates in all Time frames,(it is for us to select the Time frame as per our Psyche & Comfort levels),in that Time frame a trader reads the sentiments & emotions of the individuals/institution trading in that time frame,which infact is reflected in a collective form as Volume & Price where Time dimension reflects that Sentiment.
So nothing to worry ,we will read the sentiment in our Time frame & act accordingly on Mkt ,rather if we cant read the chart then it is our inability,any change of sentiment has to have a foot print on the chart,so no assumption & pre-concieved notion.However thks for warning us.
Asish

jatayoo · #14 26th July 2007, 08:51 AM

Quote:

Originally Posted by uasish

rajaram.dilipkumar,
Have read that report & also the report of the effect of $ Yen carry trade over US Mortgage Mkt & the Global cascading effect of this Cheap/Easy money when reverts back.
I am least bothered as a Trader ,any Buy/Sell signal when given by my s/w i will do accordingly.
I was interested in your observation of Nifty with P/E becoz in system building all type of datas are necessarily a prerequisite at least for MM & RM.
My trading experience says ,price oscillates in all Time frames,(it is for us to select the Time frame as per our Psyche & Comfort levels),in that Time frame a trader reads the sentiments & emotions of the individuals/institution trading in that time frame,which infact is reflected in a collective form as Volume & Price where Time dimension reflects that Sentiment.
So nothing to worry ,we will read the sentiment in our Time frame & act accordingly on Mkt ,rather if we cant read the chart then it is our inability,any change of sentiment has to have a foot print on the chart,so no assumption & pre-concieved notion.However thks for warning us.
Asish

HI
Going by the number of block deals in the last 2 weeks it appears that insiders are taking positions with a two / three year timeframe in blue chips and select stocks they are bullish on.

uasish · #15 26th July 2007, 08:56 AM

Quote:

Originally Posted by rajaram.dilipkumar

I studied historical P/E data from Mar 2001 and its amazing to note that the market has never breached P/E level of 22.02 ......it has reached the P/E level of 22.01 only twice once on 8th march 2004 and again the same level yesterday.In the earlier occasion from 22.01 it reached 12.87 on 17th may 2004(within a span of two months)i.e. a fall from 1885 to 1388 ( nearly a third of nifty shaved off)......now will history repeat itself .

just go through the link on historical P/E :-

http://www.nseindia.com/content/indi...0012572007.csv

As per the Data attached by you there seems to be some anamoly in the observations,(as it is NSE Data then may be we are mistaken) the Low of 17th May's Month is 11.94 not 12.87 & you are correct the High of 31st March's Month is 22.01 & the High of current month is 22.01.
However this boils down to my chart reading & understanding,no Buy / Sell can go incognito in NSE Bhav copies,on Mkt in Intraday we will have to Read it,which we do everyday still Heights do make me Dizzy,thks for your Input.
Asish

rajaram.dilipkumar · #16 26th July 2007, 09:07 AM

Quote:

Originally Posted by uasish

As per the Data attached by you there seems to be some anamoly in your observations,plz correct the Data (as it is NSE Data then may be you missed )

hi Uashish,

actually thats a link from NSE that i have provided and NSEs website cant be wrong i guess . Go to NSE - Indices - Statistics - Historical P/E , P/B and div yield values for more.

rajaram.dilipkumar · #17 26th July 2007, 09:09 AM

Quote:

Originally Posted by uasish

As per the Data attached by you there seems to be some anamoly in the observations,(as it is NSE Data then may be we are mistaken) the Low of 17th May's Month is 11.94 not 12.87 & you are correct the High of 31st March's Month is 22.01 & the High of current month is 22.01.
However this boils down to my chart reading & understanding,no Buy / Sell can go incognito in NSE Bhav copies,on Mkt in Intraday we will have to Read it,which we do everyday still Heights do make me Dizzy,thks for your Input.
Asish

ya you are right NSE data is on closing P/E and not intraday.

uasish · #18 26th July 2007, 09:14 AM

Quote:

Originally Posted by rajaram.dilipkumar

hi Uashish,

actually thats a link from NSE that i have provided and NSEs website cant be wrong i guess . Go to NSE - Indices - Statistics - Historical P/E , P/B and div yield values for more.

That is why i wanted to Draw you attention ,the Low of 30th May's Monthly Bar is 10.84 & the Low of 31st May's Monthly Bar is 11.94. May be you we are making some mistake to say the low of 17th May.
I dont have any inkling on FA ,i can max try to read the data in chartical format.

rajaram.dilipkumar · #19 26th July 2007, 09:33 AM

Quote:

Originally Posted by uasish

rajaram.dilipkumar,
Have read that report & also the report of the effect of $ Yen carry trade over US Mortgage Mkt & the Global cascading effect of this Cheap/Easy money when reverts back.
I am least bothered as a Trader ,any Buy/Sell signal when given by my s/w i will do accordingly.
I was interested in your observation of Nifty with P/E becoz in system building all type of datas are necessarily a prerequisite at least for MM & RM.
My trading experience says ,price oscillates in all Time frames,(it is for us to select the Time frame as per our Psyche & Comfort levels),in that Time frame a trader reads the sentiments & emotions of the individuals/institution trading in that time frame,which infact is reflected in a collective form as Volume & Price where Time dimension reflects that Sentiment.
So nothing to worry ,we will read the sentiment in our Time frame & act accordingly on Mkt ,rather if we cant read the chart then it is our inability,any change of sentiment has to have a foot print on the chart,so no assumption & pre-concieved notion.However thks for warning us.
Asish

Uashish ,

Note its no pre-conceived notion rather its interpreting the data we have on hand in to reliable information.

Actually it is the findings of this report that made me look at the relationship between USD/JPY and the market movements more seriously........infact u will note that when the yen depreciates the market moves up and vice-versa(thats the influence of yen carry trade) . In feb 2007, yen was at 115 against dollar and now it has depreciated to around 120.51 ( infact it depreciated to as low as 123,124) and around this time the market has also moved up significantly. Infact i believe this could be a extremely reliable indicator that studies market liquidity..........
Now a lot more research needs to be done in order to build a case around it and iam already doing that ..

Linus · #20 26th July 2007, 09:41 AM

Hi friends,

Thanks for the nice posts on this topic. BTW, for those who might have missed, take a look at my post on FII/MF investment comparison study, which I published last week.

Tnx all,

ss

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