Market Under Panic!

[Saint]

Saint

Sounds Interesting. Top reversal in monthly charts ! Would be nice if you can post the chart for us to study.

regards

karthik

Month not over yet,Karthik.......but interesting if we end the month below 7800(i.e taking out prev month low),after forming a wide range bar last month.Will end up forming something akin to a Bearish engulfing candle.

Sorry,my friend........the one thing I can't do is to post charts.Keeps coming as file too big to upload.

All the best!
Saint

 

[AMITBE]

Hi Karthik...here's some material from my new toy...the Sensex charts you asked of saint.
Each of these is the daily chart. Each has the same dates indicating the start of the new bull run, and the start of the current correction, and is updated for today.
On the Bollinger Bands, the interpretations are that when the Moving Average middle line hugs either band, besides the continuation of the existing trend it would also denote extreme over bought or sold condition depending on the upper or lower band in question. The other sign is that when bottoms or tops are made outside the bands, this would call for reversal in the trend.
Notice how in the BolBand chart, on May 9, the price line begins to climb to the upper band and remains there almost all the way to Oct 4. Here comes the drop, and finally today, the price line almost punctures the lower band. So the possibility of a bounce up increases here.
On the RSI too, from May 9, the indicator remains in the upper reaches mostly till Oct 4, with brief drops into the neutral region. Meaning mostly extreme over bought. Then the slide begins on Oct 4. Today we are rock bottom, over sold, with a slight positive divergence visible at the tip. Another pointer for a possible bounce.
Finally, your favourite ADX indicator too seems to suggest the same. On May 9, D1 crosses above -D1 and simultaniously the ADX begins to bottom out followed by a surge to the up. Then the ADX remains mostly above 30 while D1 remains above -D1. With D1 above -D1, the trend it real, but with the ADX keeping mostly over 35 and peaking close to 42 a few time, the trend is now over stretched. Now notice how on Oct 4, -D1 crosses above D1 with the ADX falling in conjuction. This is all the way to today, when the ADX clearly noses up above 30, and correspondingly, -D1 begins to nose down at 32. Much depends on how the next couple of days shape up for D1 because if this begins to rise along with the ADX, and -D1 continues to slip, we may be looking towards at least a short term trend reversal...to the up!
For the rest, the monthly and weekly price indicators themselves have broken below the previous monthly and weekly peaks. So on the long term indicators the trend is distinctly bearish.
Would love to discus this further.

 

[Saint]

Hi Karthik...here's some material from my new toy...the Sensex charts you asked of saint.
Each of these is the daily chart. Each has the same dates indicating the start of the new bull run, and the start of the current correction, and is updated for today.
On the Bollinger Bands, the interpretations are that when the Moving Average middle line hugs either band, besides the continuation of the existing trend it would also denote extreme over bought or sold condition depending on the upper or lower band in question. The other sign is that when bottoms or tops are made outside the bands, this would call for reversal in the trend.
Notice how in the BolBand chart, on May 9, the price line begins to climb to the upper band and remains there almost all the way to Oct 4. Here comes the drop, and finally today, the price line almost punctures the lower band. So the possibility of a bounce up increases here.
On the RSI too, from May 9, the indicator remains in the upper reaches mostly till Oct 4, with brief drops into the neutral region. Meaning mostly extreme over bought. Then the slide begins on Oct 4. Today we are rock bottom, over sold, with a slight positive divergence visible at the tip. Another pointer for a possible bounce.
Finally, your favourite ADX indicator too seems to suggest the same. On May 9, D1 crosses above -D1 and simultaniously the ADX begins to bottom out followed by a surge to the up. Then the ADX remains mostly above 30 while D1 remains above -D1. With D1 above -D1, the trend it real, but with the ADX keeping mostly over 35 and peaking close to 42 a few time, the trend is now over stretched. Now notice how on Oct 4, -D1 crosses above D1 with the ADX falling in conjuction. This is all the way to today, when the ADX clearly noses up above 30, and correspondingly, -D1 begins to nose down at 32. Much depends on how the next couple of days shape up for D1 because if this begins to rise along with the ADX, and -D1 continues to slip, we may be looking towards at least a short term trend reversal...to the up!
For the rest, the monthly and weekly price indicators themselves have broken below the previous monthly and weekly peaks. So on the long term indicators the trend is distinctly bearish.
Would love to discus this further.

As Amit pointed out,the monthly and weekly are looking bearish for the intermed term,............But on a shorter time frame,get ready for a bounce any time soon.Daily charts have had multiple days on the down and is sitting on some support,and also at around the 38.2% Fib support area as well.TRIX below signal line in the negative,hasn't turned yet,but we are at an area of getting ready to buy.So please friends,long term charts are looking bearish and short term ones are looking increasingly like a bounce................meaning not the time to take fresh shorts,time to cover the old shorts,time to buy but using a shorter time frame.

That RSI pattern on Oct 4 was a neat one.....nice bearish divergence!And an ensuing fall.Also,the Demand Index showed a nice bearish divergence at that same time.

Great education,Amit..............keep em coming,as always!!

Saint

 

[karvind79]

Dear Friends,


Nice topic and investors never worry abt market .Speculators kindly wait for 10 to 15 minutes in the morking for settling market.All are thinking that when saw 135 points + in the morning (20/10) , market will bounce back.Watch carefully when opens and start ur trading by 10.25 and traders can minimize the losses when market crashes.only the shortterm spectualtors and traders worry abt market.All we expecting that market will go up and up daily then we all think market is good.Always a good correction is good basement for further uptrend.Now market is in Oversold region due to panic,eventhough corporates are giving good results .In this situation when bull run like 2 week b4 will be continue now with good results , market reached it's saturation.but not hap'nd like that and our people get panicked due to selling of FIIs and traders.This panic heavily shake the retail investor.Now this is the good time to buy for investors.From my charts CCI is toward up and stick is in good support and market will bounceback today(21/10). Check the market and we will meet tom'row.

bye now and take care to all

From,

Arvind K

Note: Seniors comments are expected and the above material doesn't recomend anyone to BUY/SELL.this is only my view.

 

[Saint]

This panic heavily shake the retail investor.Now this is the good time to buy for investors.From my charts CCI is toward up and stick is in good support and market will bounceback today(21/10).

Hi Arvind,

Yep.......expect a bounce soon.But is this a good time to buy for investors?My opinion,not yet.I don't think that my target as an investor is for the market to go up from 7900-8400,it's of course to retake its highs and go on to 9000,10000.........it may happen,but not before some grinding.

Short term longs,maybe............Investing,not very sure about that.But it takes all of us to make a market,I suppose!

All the best,....and good luck!

Saint

 

[karthikmarar]

Amit

Great Analysis... you are really making use of your new toy...

Amit, Saint

I was just wondering whether we can apply ADX to weekly and monthly charts? Logically speaking we should be able to....If so what is the period to be used...

I just tried plotting the ADX on the NIFTY weely and monthly charts. I used a period of 13.

In the montly chart the DI has peaked at 42 and has turned down. The DI- has almost bottomed out at 10. However the ADX still flat. It looks almost like just the starting of longer term Bearishness.

In the weekly the bearisness is quite evident. DI moving down and DI- moving up. ADX come downward. Again looks like the bearishness has will persist for some time.

All the under the assumption that ADX will work for weekly and monthly charts.

Agree with both of you. Though we will have a bounce the longer term is bearish.

Amit, Saint Thanks for all the education

warm regards

karthik

 

[feels_good_today]

Hi Karthik...here's some material from my new toy...the Sensex charts you asked of saint.
Each of these is the daily chart. Each has the same dates indicating the start of the new bull run, and the start of the current correction, and is updated for today.
On the Bollinger Bands, the interpretations are that when the Moving Average middle line hugs either band, besides the continuation of the existing trend it would also denote extreme over bought or sold condition depending on the upper or lower band in question. The other sign is that when bottoms or tops are made outside the bands, this would call for reversal in the trend.
Notice how in the BolBand chart, on May 9, the price line begins to climb to the upper band and remains there almost all the way to Oct 4. Here comes the drop, and finally today, the price line almost punctures the lower band. So the possibility of a bounce up increases here.
On the RSI too, from May 9, the indicator remains in the upper reaches mostly till Oct 4, with brief drops into the neutral region. Meaning mostly extreme over bought. Then the slide begins on Oct 4. Today we are rock bottom, over sold, with a slight positive divergence visible at the tip. Another pointer for a possible bounce.
Finally, your favourite ADX indicator too seems to suggest the same. On May 9, D1 crosses above -D1 and simultaniously the ADX begins to bottom out followed by a surge to the up. Then the ADX remains mostly above 30 while D1 remains above -D1. With D1 above -D1, the trend it real, but with the ADX keeping mostly over 35 and peaking close to 42 a few time, the trend is now over stretched. Now notice how on Oct 4, -D1 crosses above D1 with the ADX falling in conjuction. This is all the way to today, when the ADX clearly noses up above 30, and correspondingly, -D1 begins to nose down at 32. Much depends on how the next couple of days shape up for D1 because if this begins to rise along with the ADX, and -D1 continues to slip, we may be looking towards at least a short term trend reversal...to the up!
For the rest, the monthly and weekly price indicators themselves have broken below the previous monthly and weekly peaks. So on the long term indicators the trend is distinctly bearish.
Would love to discus this further.

hi all,

Though AMIT has explained very well. Thanks AMIT for that. Here is a book which could help you on working with ADX & DI's

http://www.megaupload.com/?d=W0HIESY9

Regards
Raju

 

[manish1412]

well think,the worst is over now, we can see a bounce back tomorrow, which can hold on....

 

[ankurpcl]

Its really very nice to read such valuable observations and key activities
that are going in market from last 3 weeks from all our respected seniors.

Everyone hoping market will bounce back soon but I think because of heavy
selling by FIIS and MutualFunds, market will take mimimum weeks time
more to show some stablization.

So no point in entering at this stage when people are selling under panic and
they are feeling that World is going to over after seeing huge crash in market.

Market may show some positive signs after Diwali, and I think that time might
be sensex will be at levels 7750 and from that point onwards it may take some
positive momentum but not as much as we have seen in last bull run.

So atleast small investors like me just stop buying at this time and have a good time with their families till Diwali and after that we can think of entering back if LAXMI DEVI Blesses us all

All the Best!! Nothing to worry !! All members in this forum have enough talent
to pull back money once again from this bear market but just wait and hope
for the best time to come very soon.

-Ankur

 

[phoenix]

Great discussions,Saint,Amit and Karthik...........very timely too!!

Thanks !

Phoenix