Market Internals

learningcurve · #**101** 11th September 2007, 04:02 PM

Dear sunil saranjame,
I was going through your posts but these posts have bring forth questions in
my mind. They are:

1) what can we infer from the graph of net flows(FII + MF) versus nifty?.
Likewise for all those graphs provided by you. By looking at those graphs what
do they indicate?. Can you explain these graphs to learners like us , who can
understand these graphs better as an indicative tools rather than just coming
across these graphs as mere pictures?. I would be grateful if you can explain them
in details for each graph.

Moreover, I have one suggestion and If implemented then highly appreciated. It is:
Please mention what are the various lines in the graph , if the line is MA then
mention the time period used and whether it is SMA or EMA in the graph that
you provide so that it becomes more easy to read.

With regards,

Learningcurve

Saint · #**102** 16th September 2007, 01:12 AM

Quote:

Originally Posted by sunil saranjame

Now the TRIN cahrts ...

Have fun, enjoy your weekend! MF/FII chart by tomorrow.

ss

Sunil,......missing in action for a week.Hope all's well....all the best!

Saint

Linus · #**103** 16th September 2007, 11:48 AM

Quote:

Originally Posted by learningcurve

Dear sunil saranjame,
I was going through your posts but these posts have bring forth questions in
my mind. They are:

1) what can we infer from the graph of net flows(FII + MF) versus nifty?.
Likewise for all those graphs provided by you. By looking at those graphs what
do they indicate?. Can you explain these graphs to learners like us , who can
understand these graphs better as an indicative tools rather than just coming
across these graphs as mere pictures?. I would be grateful if you can explain them
in details for each graph.

Moreover, I have one suggestion and If implemented then highly appreciated. It is:
Please mention what are the various lines in the graph , if the line is MA then
mention the time period used and whether it is SMA or EMA in the graph that
you provide so that it becomes more easy to read.

With regards,

Learningcurve

Thanks dear,

MF and FII charts tell us abot the raw money flowing in and out of our markets. You will notice that when FII's were net buyers, MF's were net sellers, a confusing picture! So our friend Kalyan suggested to draw a Net inflow chart which adds up MFI and FII and that tells us the story.

About the other charts, you have to look at divergences. e.g, in the A/D chart, in the earlier part on the left, note the negative divergence between the A/D ratio and the Nifty: Nifty is rising but the A/D has already begun its journey down.

I have marked the charts now which explains what is what.

Thanks,

ss.

Linus · #**104** 16th September 2007, 11:51 AM

Quote:

Originally Posted by Saint

Sunil,......missing in action for a week.Hope all's well....all the best!

Saint

Dear Saint,

Thanks a lot, and I will be again posting charts regurarly.

Regards,

ss

Linus · #**105** 16th September 2007, 11:55 AM

There is some weakness now as the A/D has dropped.

ss

Linus · #**106** 16th September 2007, 12:01 PM

... the TRIN charts...

ss

Linus · #**107** 16th September 2007, 01:22 PM

Net Investments MFI+FII updated till Sept 13, 2007.

ss

learningcurve · #**108** 18th September 2007, 01:24 PM

Quote:

Originally Posted by sunil saranjame

Thanks dear,

MF and FII charts tell us abot the raw money flowing in and out of our markets. You will notice that when FII's were net buyers, MF's were net sellers, a confusing picture! So our friend Kalyan suggested to draw a Net inflow chart which adds up MFI and FII and that tells us the story.

About the other charts, you have to look at divergences. e.g, in the A/D chart, in the earlier part on the left, note the negative divergence between the A/D ratio and the Nifty: Nifty is rising but the A/D has already begun its journey down.

I have marked the charts now which explains what is what.

Thanks,

ss.

Dear sunil,

Thanks for implementing my suggestion and I believe it will do great help to others as well.

Actually I have two questions relating to your reply on previous post. They are :

1) If Nifty is rising but A/D ratio is going down then what does it imply or what message does it gives?

2) What story does Net inflow(FII + MF) chart tell us?. Can you explain in detail.

With regards,

Learningcurve

Linus · #**109** 18th September 2007, 11:25 PM

Quote:

Originally Posted by learningcurve

Dear sunil,

Thanks for implementing my suggestion and I believe it will do great help to others as well.

Actually I have two questions relating to your reply on previous post. They are :

1) If Nifty is rising but A/D ratio is going down then what does it imply or what message does it gives?

2) What story does Net inflow(FII + MF) chart tell us?. Can you explain in detail.

With regards,

Learningcurve

Hi learning curve,

Thanks!

The advance decline ratio tells us what the broader market is doing. If there are more number of declining stocks, this ratio would be less than one. A/D is calculated on the whole market basket ie say 1024 stocks or whatever in the NSE. Imagine such a situation continuing say for many days, at the same time the market barometer say Nifty is rising. So you have a negative divergence in place: Nifty is rising but the A/D ratio is going down, that means the broader market is not participating in the rally and this can be interpreted as a weakness.

Yes,about the MFI/FII net flows, it tells you what the smart money is doing over a period of time and gives you one more perspective in trying to understand what the heck is happening out there!

HTH,

ss

learningcurve · #**110** 19th September 2007, 11:49 AM

Quote:

Originally Posted by sunil saranjame

Hi learning curve,

Thanks!

The advance decline ratio tells us what the broader market is doing. If there are more number of declining stocks, this ratio would be less than one. A/D is calculated on the whole market basket ie say 1024 stocks or whatever in the NSE. Imagine such a situation continuing say for many days, at the same time the market barometer say Nifty is rising. So you have a negative divergence in place: Nifty is rising but the A/D ratio is going down, that means the broader market is not participating in the rally and this can be interpreted as a weakness.

Yes,about the MFI/FII net flows, it tells you what the smart money is doing over a period of time and gives you one more perspective in trying to understand what the heck is happening out there!

HTH,

ss

Hi sunil,

Thanks for your detail reply.

The following are my understanding about Net inflow(FII + MF) and Nifty chart and I am writing those down. Please correct me where I am wrong and if you can add something more to it than its pleasure for me. Now they are:

A) Net inflow(FII + MF) rising and Nifty also rising-----
So, does it means FII/MF are buying nifty stocks.

B) Net inflow(FII + MF) rising and Nifty falling------
So, does it means FII/MF are buying not the Nifty stocks but the mid cap & small cap stocks.

C) Net inflow(FII + MF) falling and Nifty also falling------
So, does it means FII/MF are selling nifty stocks.

D) Net inflow(FII + MF) falling and Nifty rising--------
So, does it means retail investors & HNI are buying the nifty stocks while FII/MF are selling mid cap & small cap stocks. Do we here have to check the net inflow (FII+MF) to CNX mid cap index. ( i.e. if net inflow falling and CNX mid cap index also falling then it means that FII/MF are selling the mid cap stocks)

Your valuable advise is needed.

With regards,

Learningcurve

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