Observations & Ideas

[descartes]

Hello all

This is my first thread on the forum and I will be using it to record what I observe be it in the markets or life in general.

Format:
1. Market observation log - This is what I see when I look at charts
2. Current readings - What is helping me expand my knowledge: books, documentaries, courses etc.
3. Other thoughts - Could cover varied topics

Suggestions are welcome. Hopefully the learning curve will exponentially increase with inputs from forum members.

Thanks!

 

[descartes]

<Reserved for future posts>

 

[descartes]

Observation Log: 29th & 30th April 2014

29th April 2014

Close at 6715

Daily
downtrend extension
previous SL6663 should get support here

Hourly
downtrend extension
previous SH6760
resistance at 6749
weakening bearish tendency and slightly strengthening bullish tendency indicating slowing of bearish move
support at 6713
next SR at 6670-6680

15 Min
complex pullback occurred in a downtrend
resumption of downtrend
very weak bullish pressure but strong bearish pressure


30th April 2014
Close at 6696 (down by 19 points)
A gap up at start. NIFTY SGX had a positive start

Daily
SL at 6656 is below the SL of the last extension in the upward trend
This could be a PB or a CPB
Good support at 6650
Upward trend is slowing down
There is possibility of bearish pressure
Better to stay out and observe in this scenario
This is the 3rd time the SL has tested the support at 6650

Hourly
Downward trend extension
Steep curve for the last downward leg
Breached SR at 6670-6680

15 Min
Downward extension with an increasing momentum but a test of SR at 6670-6680
Resistance at 6720

Overall
Weakening bullish pressure and strengthening bearish pressure

p.s. pasting from my notebook

 

[descartes]

Currently I am reading the following books:

1. Lance Beggs YTC Price Action Trader: I have reached mid way through the 3rd volume. Enjoying the flow of thought of Lance. The book has given me a different perspective of the market. Will finish the series and re read again taking notes this time.

2. Option Volatility & Pricing by Sheldon Natenberg: Wanted to brush up my favourite subject from business school days without referring to Hull's books. This book is more from the trader's perspective. Haven't learnt any additional thing in the first few chapters though but I am sure there are certain good chapters coming.

I had taken a financial markets course in Feb on Coursera by one of the Nobel Laureates last year. It was a simple introduction and I gave up in between. Have another course lined up in two weeks time on mathematical methods of quantitative finance. Lets see how interesting it is.

 

[descartes]

Observation Log: 2nd May 2014

The chart which I am trying to focus on is the daily chart.

2nd May 2014

Close at 6694 (down by 2 points)
Gap up of 13 points

Monthly
Downward extension from a probable swing high in an uptrend
Downward extension might extend to 6400
6400 is an S/R region

Weekly
Downward extension in an uptrend from a probable SH
Support at congestion area of 6530

Daily
Bearish pressure slightly stronger as the extensions in the last 3 bearish swings have increased
Weakening bullish move as the last bullish extension had a slowing curvature
Any downward move will get support in the region 6660 - 6680
refer chart

Hourly
Overall downward move
Strengthening bearish pressure because of an increasing momentum (curvature)

30 Min
Overall downward move
Strengthening bearish pressure because of a increasing momentum (curvature)

15 Min
Overall downward move with a downward trend classical LSL and LSH
The downward trend is slow though

Overall
Looks we are entering a slight congestion area 6660-6680 which might finally break into a downward move with supports coming in at 6530 region.
If the market were to go up then resistance is at around 6800 mark.
The next candle could be a SL and then a test or a break out failure at the S/R if sentiment were to be bullish for the election day.

Will take a note of the SGX Nifty before India opening tomorrow.

 

[rkkarnani]

Its an awesome effort Descartes !! Sure many will be benefited. The chart and the levels are for Nifty Future or Spot!?

 

[amitrandive]

Hello all

This is my first thread on the forum and I will be using it to record what I observe be it in the markets or life in general.

Format:
1. Market observation log - This is what I see when I look at charts
2. Current readings - What is helping me expand my knowledge: books, documentaries, courses etc.
3. Other thoughts - Could cover varied topics

Suggestions are welcome. Hopefully the learning curve will exponentially increase with inputs from forum members.

Thanks!

descartes

Looking forward to postings on this thread.
:clap:

 

[Tamil trader]

Descarates,

Advance thanks for your future efforts.

It is useful to all the learners

 

[descartes]

Observation Log: 5th May 2014

05 May 2014
Close just under 6700
Flat opening which was in sync with the SGX Nifty in the morning

Monthly
Looks like the downward extension has begun
All else holds true as per previous log

Weekly
Continuation of downward extension
All else holds true as per previous log

Daily
The downward extension continues but there are two important clues which we can observe
1. The curvature is flattening out meaning the bearish pressure is weakening although we can't say much about the bullish pressure
2. We witnessed the "Inverted Hammer" candle today. This indicates a bullish reversal signal after a downtrend (more on this in the next post)
S/R regions hold true as per the last log

Hourly
The movement is downward but there might just be sideways movement within 6740 - 6690 levels

30 Min & 15 Min
Indicate a bearish move

Overall
The daily chart looks than an upward move might occur. This might just be the last clean move northwards till the election results.
We could probably be long this week but we need to see how tomorrow plays out. If its a red day closing more than 20 points lower than today then we need to reassess. And on the other hand if its a bulls day tomorrow we might be in the last upward move before the D Day.

My observations & analysis is solely based on the spot values. With this thread it will help me and others, hopefully, in developing a feel of the market, a sense of direction and more importantly instill discipline to do so every trading day.

 

[descartes]

Ideas: The Inverted Hammer

One of the first books I read when I began learning this art was Steve Nison's book on Japanese Candlesticks.

The book has numerous quotations at the start of every chapter. The quotation at the beginning of the book reads:

Candles exhaust themselves to give light to men

Some important points of note from the book:
1. The inverted hammer is a bottom reversal signal.
2. The inverted hammer is a bullish pattern after a downtrend.
3. We should wait for a bullish confirmation after the inverted hammer because the price action which gave birth to an inverted hammer is essentially bearish in nature.

Therefore tomorrow we have to observe whether at the start of the day the bulls take control or not. We will also get cues whether this could be a reversal by observing for how long the bulls fight off the bears. And if the bulls emerge victorious then indeed this would be a reversal in this extension.