Month: November 2011

If trading has been dull for you or you stops have been mowed down in a sideways market, blame it on the Nifty D.

The Nifty D is the distribution pattern or the balancing nature of the market as it moves from Imbalance to balance.

Here is the chart which was posted yesterday :

And this is the updated one as of today :

Clearly the profile is balancing and acquiring a D shape as we look to leave this formerly poor traded zone.

There have been sellers selling near the highs and covering for a few points below and buyers buying the dip but not holding on for higher levels.

Meantime the 5300 CE/ PE are accumulating volumes and Open Interest as well as the 5200 PE and the 5400 CE.

That’s the actual strategy for this market- a theta burn on a delta neutral platform.

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D forming

If you had tracked the composite profile picture in the morning, you would have noted that the market has some more time to do at the levels shown in green in the picture.

That profile chart is not complete yet and the market may auction back and forth till we get a wonderful D.

Here is the volume chart of the action today.

The three highest volumes are at 5290/ 5320/ 5330 in blue straight lines.

Also the biggest performer of the last few days, shows what it means to follow the OrderFlow system thoroughly.

When you are looking ta that chart, bear in mind that every point traded gives you a return of 100 bucks.

There’s about a 170 points of profilts on that chart.

Yesterday we had only MCX open and we got 2 buy alerts on the system and today in NSE hours we got 2 more and another copper alert also. All of them have hit the targets as per our unique Prime Pivot system and we are riding the balance free.

Here is a spreadsheet we are tracking for performance :


[googleapps domain=”spreadsheets” dir=”pub” query=”output=html&widget=true&single=true&element=true&gid=0&key=0Aguuu7T3NhX2dHRQTVdTanJaaTZVZXNUc3hDQ195LXc&range=B4%3AJ15″ /]

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OrderFlow Update

Coming back after the holiday, we have an amazingly flat open in the NF.

The open in range and value suggests more of a sideways bias after 2 back to back neutral days.

Since the gap up , the market has tried to fill the gap zone and you either buy at the low of the range or sell higher.

The market action is becoming very predictable and we know that something which everyone knows does not last!

Here is the composite profile for the past 6 sessions giving value area high at 5258 and a value low at 5262.

The profile is clearly balancing around 5314 which is the composite POC.

It will also decide the short term bias as the market looks to exit this 6 day value.

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NF Composite Profile

This is a continuation of our series on looking at Price through Time Cycles.

In my last post made on Sept 3, I had called for the beginning of a new Intermediate term ( IT) cycle around the Sept 20th period noting that the then prevalent cycle had made it’s max run and the lows would hold.

These were the observations :

“This current cycle has done 1020 points, which is the upper extreme for any cycle.

We feel the lows of the cycle will hold over the next 10-15 days by which the new IT cycle should begin.

For any up moves, 5123 spot will be the first Resistance line on daily closing basis, above which the market can attempt a gap fill  and go up to 5400 levels.

On the upper extreme, 5645 is the max the next cycle can stretch to” 

Let’s look at the charts to see what happened

We are now in the third half cycle for the current IT, which should end in another  5 days and mark the center for the current term
The current  IT cycle should close out by the year end and as we are in the middle band as far as timing the cycle is concerned, there is no noticeable evidence of the cycle being left translated here.This clearly means that in the time span running into the year end the market has bigger chances of running up than down.
For the biggest bull out there, if you are trying to guess where the market will be by year end ( about 2 months) then the projection puts levels at 5754 very close to the 5654 I have projected earlier.
 However that is the max upside levels for the year and the market has to do a lot of work before it can even attempt to come closer.
Let’s Look at a profile charts of the last IT cycle to understand where the volumes occurred.
It’s now an open secret that the buying happened around the 5110 zone and it shows the biggest volumes.
But if you look at the profile on the left, you would notice the volumes around 5570 region which brought the market swiftly down the last time around.
Also the ovals ( in charts)  show the lack of volumes in the previous IT cycle in the current trading zone, which is a clear double distribution mechanism or a DD as we call it.
So there are 2 possibilities for the market over the next few weeks leading into the year end.
Possibility 1 : It auctions this low volume zone of the previous IT cycle and moves towards efficiency.
Possibility 2 : It gets attracted to the High volume zones at 5570 and above at 5650 , auctioning for a while in that zone before moving lower for the next IT cycle.
The stop loss for both cases would be the lower 5110 region.
Possibility 1 is our preferred scenario and would mean a consolidating market till the year end.Within this a break of the previous gap zone of 5240-5340 would set-up exciting possibilities.
For those interested in watching the action closely in our trading room, here’s an offer for you.
For the next 5 days only, we are happy to give one month free on our quarterly Subscriptions.
You can now get 4 months of Vtrender Live at INR 9999/- instead of the regular 3 months.
Subscription details on the Bank Transfer link on the right side.
Existing subscribers can also avail of this offer, which will be topped up once your current plan runs out.The offer closes on 12th November.
If you have questions, send me a mail at vtrender@gmail.com.

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Price n time (3)

At Vtrender most of our analysis runs on Price and Volumes only.

We do not use any other indicator to check the movements of the market.The OrderFlow charts depict price volume behavior and show us where the bias of the market is.

Here is a simple way of not losing money in the markets- Just avoid trading against the orderflow i.e you do not buy when OF is Red or sell when OF is Blue.It’s a simple method of being on the right side of the market action.

We give a lot of importance to volume. If you are not involving volume in your analysis, you are actually looking at the market through one eye!

We picked out large volumes at the close at 5311 yesterday and the market was steady above it this morning.

Today’s big volumes are at 5285 and 5352 both of which were market movers.

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OF and volumes