market momentum faltering ?

[kkseal]

What does it mean?

Possible Scenarios:-

OPTIMISTIC : Flat Opening - I-day correction - 1st Pivot Support (i-day) taken out - Encourages bears, more short buildup - sudden buying - shorts scurry for cover - more upmove - positive closing.

PESSIMISTIC : You know what.

Optimism stems from the AD ratio Can't go much lower can it (at least in the initial stages of a fall)?

Regards,
Kalyan.

 

[kkseal]

What does it mean?

Mkt data for 7th Dec 06 :--
_____________________

Nifty December futures discount of 6.85 points turns into a premium of 3.10 points. Futures add 3 lakh shares in open interest. (+)

Nifty Put Call ratio of open interest remains flat at 1.50.
Put Call ratio of vol increases from 0.98 to 1.32. (=)
Nifty Put and Call options add 5 and 4 lakh shares in open interest respectively. (=)

Implied volatility of Nifty Put options decreases to 23.66% from 25.78%, while implied volatility of Nifty Call options increases to 20.15% from 19.77%. (looks +ve though)*

The NSE cash turnover was at Rs 7466.61 crore and the NSE F&O turnover was at Rs 22339.52 crore. (+)

NSE Advance Decline ratio 4:5 (=) Improved

Overall :

Bearishness seems to be receding. (Though still fairly even-stevens between bull-bears). Tomorrow after some initial tussle mkts may actually move up.

Regards,
Kalyan.

* Looks +ve 'cos fall in IV of puts => Put premium decreasing Whereas Call premiums increasing. The evidence for this also comes from the 2 PC ratios. Although Puts have a slight edge in terms of volumes, Calls are matching Puts on value.

 

[kkseal]

What does it mean?

After getting a better hang of these parameters / ratios it wouldn't be a bad idea, would it, to start plotting them. That would give us a slightly longer term outlook rather than just day-to-day.
Graphs can be done in Excel Wouldn't require any fancy TA s/w.

Regards,
Kalyan.

 

[Agilent]

Kalyan

Yr efforts at compiling and pesenting the stats are commendable

May I suggest, if you can go a step further and try put the data (PC Ratio. AD ratio etc) in a chart format superimposed on the sensex chart .... so we can look for possible co-relation in trends. (You have the raw data on Excel I guess ... and I can help in this if u like)

Need not be on daily basis ... maybe weekly or monthly will do

This will help us interpret the stats better, and to learn how to derive signals for help in trading /investing

What say ?

AGILENT

 

[kkseal]

Dear Agilent,

Sorry for the late reply.

Yes charting these ratios is possible but let's first see how well they relate to market movements. Otherwise it'll be an exercise in futility.

Like just when i thought the bearishness was receding the 173 pts fall on Friday came as a slap in the face! Could still be a bear trap but what's worrying is not just the fall but also its extent - fractionally exceeded the last single day fall Also those divergences on the charts are becoming more pronounced by the day.
So even if we were to move up from here it could pretty well be the last leg of this bull run.

I have decided to track these ratios some more time to see what correlation it has (if any) with actual mkt movements before deciding whether or not it would be useful to chart them.

Thanks & regards,
Kalyan.

 

[jatayoo]

Dear Agilent,

Sorry for the late reply.

Yes charting these ratios is possible but let's first see how well they relate to market movements. Otherwise it'll be an exercise in futility.

Like just when i thought the bearishness was receding the 173 pts fall on Friday came as a slap in the face! Could still be a bear trap but what's worrying is not just the fall but also its extent - fractionally exceeded the last single day fall Also those divergences on the charts are becoming more pronounced by the day.
So even if we were to move up from here it could pretty well be the last leg of this bull run.

I have decided to track these ratios some more time to see what correlation it has (if any) with actual mkt movements before deciding whether or not it would be useful to chart them.

Thanks & regards,
Kalyan.

Dear me,The bull run is not ending...It has just begun.Need i draw your attention to the GDP numbers and the performance of corporate india over the last 3 years.
There is no outright manipulation of the market:the SEBI would have latched onto it by now...... remember the IPO scam.Regulator is active and patrolling thew markets.By 31 dec every investor will be tied down with PAN number.
Something has fundamentally changed.Interest rates regime led the change.Today it is more than the interest rates that is driving corporate india.Perhaps we have found our ENTREPRENEURIAL CONFIDENCE and beleive that we can do what others do and do it better.The way Corporate India is acquiring companies abroad suggests this confidence exists.Just like we had the GREEN REVOLUTION ,My Friends ,let us herald the first wave of the INDUSTRIAL REVOLUTION in india.

 

[kkseal]

Dear me,The bull run is not ending...It has just begun.Need i draw your attention to the GDP numbers and the performance of corporate india over the last 3 years.
There is no outright manipulation of the market:the SEBI would have latched onto it by now...... remember the IPO scam.Regulator is active and patrolling thew markets.By 31 dec every investor will be tied down with PAN number.
Something has fundamentally changed.Interest rates regime led the change.Today it is more than the interest rates that is driving corporate india.Perhaps we have found our ENTREPRENEURIAL CONFIDENCE and beleive that we can do what others do and do it better.The way Corporate India is acquiring companies abroad suggests this confidence exists.Just like we had the GREEN REVOLUTION ,My Friends ,let us herald the first wave of the INDUSTRIAL REVOLUTION in india.

No i didn't mean the Bull Cycle (that still has a long way to go Please refer if you wish to my post #22 in this thread) but just the current bull run (on from June).
Mkts do return to the mean of the secular trend when the deviation from it gets too high. Also if you notice this mean has also been rising (with the rising GDP) We are no longer falling back to the 12-13 PE levels (15-16 is more like it now)

Reforms have indeed unleashed growth and unshackled the Entrepreneurial spirits of India The way to sustain this growth is reforms, reforms and more reforms (That is where the apprehensions arise with the compositions of the present govt They are reaping the benefits of what has been done in the past but will they be able to provide the vital reforms impetus to keep the momentum going?)

By the way read your post on 'experience & common sense' being the best indicators. Agree with you fully An experienced trader could trade on 'gut-feeling' alone and do a lot better than many glued to their fancy softwares.
While i am not (totally) devoid of common sense i do lack experience. So would like to see your posts sir from time to time on this thread giving your sense of the markets.

Thanks

Respectfully,
Kalyan.

 

[kkseal]

Strange. Mkt parameters don't look all that bad PC ratio in fact looks better

Bounceback is possible if the shorts in the Futures can be trapped.

Where ARE the Bulls ..... ??

 

[Agilent]

Dear me,The bull run is not ending...It has just begun. Need i draw your attention to the GDP numbers and the performance of corporate india over the last 3 years.

Looks like you are professing that the market moves based on past trends rather than future .

With respect, what makes u think that future EPS growth (the primary factor influencing the direction of the markets over the yrs) will exceed past yrs' EPS growth ?

And by the way, dont get misled by a rising sensex .... have u wondered how on most days (in recent weeks) even while sensex has risen , the AD ratio has been <1. Now surely u know what this ratio means.

If u believe there's no paradox in this, think again.

Lets discuss

AGILENT

 

[Agilent]

Looks like you are professing that the market moves based on past trends rather than future .

With respect, what makes u think that future EPS growth (the primary factor influencing the direction of the markets over the yrs) will exceed past yrs' EPS growth ?

And by the way, dont get misled by a rising sensex .... have u wondered how on most days (in recent weeks) even while sensex has risen , the AD ratio has been <1. Now surely u know what this ratio means.

If u believe there's no paradox in this, think again.

Lets discuss

AGILENT

And lo and behold... soon after I posted the above, I saw this ... which talks of the same paradox ...(read link inside the link)

http://www.traderji.com/68840-post34.html

AGILENT