These are my personal musings. These are not in any way meant to be trading advise. To view the full chart, right click and open in a new window.We just seem to forget lessons from history about global meltdowns and their reactions on our markets. And at this point in time, the correlation is huge. For a very simple reason. Trading in some Western countries is not dictated by humans, but by computers, and when a certain level is triggered, the computers start selling. That fuels the fire further, and also triggers some huge funds going belly up.
Have we forgotten the lessons of the Dow Crash of 1987 and 1990? Most traders in the market today would be “raw”, to remember the Dow lessons of so long ago. That is why, they also tend to forget the lessons of the Indian markets of Jan 2004, May 2004, Jan 2005, Oct 2005, May 2006, June 2006, and the most recent December 2006. Aaah … now I understand … people have become so fixated to watching the intraday charts, that they forget the bigger picture.
That poison which is injected in the system needs to be weaned away before the trend can change.
As was suggested yesterday 27 Feb, “For smaller traders, it may be suggested to take a vacation. Allow the entire impact of the budget to be assimilated by the MBAs, allow the market to reflect their assessment of the situation and how the big boys want to play it, and then enter the market, hanging on to their tail coats.”
Today the Nifty has behaved perfectly both in terms of support and resistance. As they say, one picture is worth a thousand words, so is today’s chart. Stay with the trend, and as of now, the trend is down. Please think of buying only when we have confirmation of a reversal in trend.
Finally, the question which most people ask in their comments … what do I think the market is going to do tomorrow? I think the market is going to make a tentative move up, meet with selling resistance, and then make a short term higher bottom. This could be viewed by short term traders as a signal to jump in at the absolute bottom, which is still a few days away. Not tomorrow.
Till then, vacation happy.
4 comments:
What wud we have done without u !
The pied piper sirji !
Dear Sir,
I am a person with very busy shedule, I cant trade online , I have to trade offline. Sir, since the present era is of online trading , if i trade offline will my entry will, be costly ? will it be costly and troublesome affair to trade offline? Or there is not much diff is trading offline and online when it comes to entry ?
sir can person trade offline and make money in markets ? or a person should trade online only ? is trading offline meanes loosing money ?
Hello Anonymous,
A person does not make or lose money by trading offline or online.
They would lose money only if they make trading mistakes.
On crucial days, such as today, it does mean the difference of a few points as far as profit is concerned.
I always have maintained, a few Rupees profit earned LESS is much better than a lot of Rupees LOST.
How you approach the markets, all depends on what time frame you choose, and what your comfort levels are as far as booking a loss.
Dusant
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