FROM AN EXPERIENCE The ones who are afraid of missing moves, who chase moves as a
result, are getting hurt. The ones who wait for clear signals and good
reward-to-risk opportunities can take advantage of the volatility.
The successful traders aren’t afraid of missing a move; they know,
in this volatile environment, other opportunities will arise.
Here are some rules.... 1. Buying a weak stock is like betting on a slow horse. It is retarded.
2. Stocks are only cheap if they are going higher after you buy them.
3. Never trust a person more than the market. People lie, the market does not.
4. Controlling losers is a must; let your winners run out of control.
5. Simplicity in trading demonstrates wisdom. Complexity is the sign of inexperience.
6. Have loyalty to your family, your dog, your team. Have no loyalty to your stocks.
7. Emotional traders want to give the disciplined their money.
8. Trends have counter trends to shake the weak hands out of the market.
9. The market is usually efficient and can not be beat. Exploit inefficiencies.
10. To beat the market, you must have an edge.
11. Being wrong is a necessary part of trading profitably. Admit when you are wrong.
12. If you do what everyone is doing you will be average, so goes the definition.
13. Information is only valuable if no one knows about it.
14. Lower your risk till you sleep like a baby.
15. There is always a reason why stocks go up or down, we usually only learn the reason when it is too late.
16. Trades that make a lot of intellectual sense are likely to be losers.
17. You do not have to be right more than you are wrong to make money in the market.
18. Don’t worry about the trades that you miss, there will always be another.
19. Fear is more powerful than greed and so down trends are sharper than up trends.
20. Analyze the people, not the stock.
21. Trading is a dictators game; you can not trade by committee.
22. The best traders are the ones who do not care about the money.
23. Do not think you are smarter than the market, you are not.
24. For most traders, profits are short term loans from the market.
25. The stock market can not be predicted, we can only play the probabilities.
26. The farther price is from a linear trend, the more likely it is to correct.
27. Learn from your losses, you paid for them.
28. The market is cruel, it gives the test first and the lesson afterward.
29. Trading is simple but it is not easy.
30. The easiest time to make money is when there is a trend. (to be contd)
A TECHNICAL VIEW
Overall Supports seen @4634, 4582-70-51,
4470, 4397-72
--These levels DON’T change everyday
An HEAD & SHOULDERS formation is very much visible in
day chart of Nifty showing the breaking point as 4582
(look @ the chart below)
Mark this :
Any 2-3 consecutive closes below this level (4582)
will kill the market atleast for 1000 points for sure
INTRADAY MOVES OF NIFTY FUTURE (DEC 19)
Resistance today @ 4705 & 4753
Supports today @ 4582-70-50
No doubt - Below 4651 Nifty Futures will slide upto
4582 -73 for sure...
Suppose if cuts 4652 and trades of 10 minutes above this level
means it would touch 4705
Above 4708 for 5 minutes means more hike upto 4750
9) Sell BGRENERGY @ 204.80 or on rise above that T1 – 200.25 T2 – 197.75
10) Sell FCH @ 117.10 T1 – 113.60 T2 – 110.65
AN IMPORTANT NOTE TO THE INVESTORS
Last Friday was the 2nd highest (BEARISH) Volume generated
(above 3.3 Cr) in the year 2011 in a single day in
Nifty Futures
Which means BEARS already started hunting…
Any rise can be considered as a dead cat bounce and a great
opportunity to SELL…SELL…& SELL is we recommend
But carefully stay with us always for the exact
entry levels and time anyway..
Once again it was a great week for our Subscribers and pursuers.
Just trade with levels & follow the charts...Nothing else…
We dont believe in Economy, Corporate results,
Data such as Inflation ,IIP etc..etc..which are all fraud and
highly manipulative here.
YES..90% or more Corporates in India are fraud & manipulative…
200% they manipulate results, speculate their own stock and making
fools to Millions by shaking hands with 4-5 Blue channels
and pink papers.
Instead of worrying about political Corruption, Black Money, etc..etc.. better take action against these
Black Dogs of Corporate world.
Indian Stock Market moves with the sentiment of Global mkt.
& FII’s activities & nothing else.
All Local Mutual Funds are Dead……
We see Skelton coming out..WATCH MORE
Many more things to write…..But of no use….
Watch dogs wont see or hear ! We are least bothered….
Time is the right factor, so will see more negative
news, defaults in coming months.
FOGGY FORECAST THIS WEEK
(EXACTLY as expected last week Nifty opened on a negative note and continued its
southbound journey throughout the week. On Friday selling pressure
was intensified and Nifty fell sharply and made a low of 4628.
Finally Nifty closed below the physiological mark of 4700 with a
loss of 4.55% on w-o-w basis)
Also as written Nifty achieved our both downside targets of 4754 and below that 4639. Thereafter also bears did not take a halt and further lead Nifty to make a low of 4628.
On weekly chart Nifty broke the neckline support of
Head and Shoulder pattern and trading below the neckline.
Beside this oscillators are still trading in negative territory.
Nifty has support in the range of 4640-4625, where 4640 is
52 week low, while 4625 is the lower band of the Bollinger on the
weekly chart.
Thus now going forward if Nifty starts trading below the
above mentioned support range then we can witness further
downside till 4538 and below that 4463.
In medium term Nifty has resistance at 5100 levels.
MARKET OUTLOOK: Weakness to persist
At the current level of 15,500, the Sensex trades at a PE of
14.03x FY12E earnings estimate and 11.74x FY13E earnings
estimate.
At 14.03x, we trade below average valuations of 15.4x 1 year
forward earnings.
The recent round of EPS downgrades have more severe in India
as compared to global peers.
Growth slowdown has intensified with Q2 GDP growth coming in
at 6.9% and IIP numbers also point to slowdown ahead
Although valuations are apparently cheap, the major driver in the
short term would be global and local macros.
STOCK MARKET USED FOR TERRORISM??
The STRs, “suspected to be linked to terrorist financing, (have been) received from intermediaries of stock market such as stockbrokers, asset management companies and disseminated to intelligence agencies by the FIU,” Meena said.
The Financial Intelligence Unit (FIU) of the Finance Ministry has received information on ten suspected instances of terrorist financing using the stock exchanges in the last three financial years, Parliament was informed on Friday.
The FIU received five Suspicious Transaction Reports (STRs) during the 2009-2010 financial year, four during 2010-2011 and a single case in the current fiscal (up to November), Minister of State for Finance Namo Narain Meena said in a written reply to the Lok Sabha.
The Financial Intelligence Unit (FIU) of the Finance Ministry has received information on ten suspected instances of terrorist financing using the stock exchanges in the last three financial years, Parliament was informed on Friday.
The FIU received five Suspicious Transaction Reports (STRs) during the 2009-2010 financial year, four during 2010-2011 and a single case in the current fiscal (up to November), Minister of State for Finance Namo Narain Meena said in a written reply to the Lok Sabha.
COMMANDMENTS FOR TRADERS
Have you written down your trading rules? Do you have rules for entry and for exit with a profit and with a loss? Do you have a rule telling you whether a market is trending and what the trend is? Do you have rules stating when the market is in a trading range and what that range is? Do you have rules saying what markets you will trade and what has to happen to trade them?
Or do you simply shoot from the hip and call it artistry or intuition? Does this work for you?
Do you follow your rules rigidly without flexibility or discretion? Does this serve you over time?
Do you abandon your rules in the heat of trading, only to regret it? Do you stubbornly go against your rules thinking this time you know better? What would happen if you didn’t do this?
Some people don’t like rules. They don’t want to be told what to do even if it’s themselves telling themselves what to do. They even more don’t like following rules that came with a system for which they paid good (any or excessive) money. They have a polarity response to direction even after it becomes apparent that they’d be more profitable simply following the rules.
Others like to be told what to do, but somehow their rules are conflicting, obscure, or so bound up with discretion as to be meaningless. These traders may not even be aware that in essence they have no rules.
Whatever your situation turns out to be, it may be helpful to think in terms of commandments or suggestions. You may think in terms of absolute rules or simple guidelines.
Do you like clear directions as to what to do? In this case you can think in terms of commandments. For example, when The Ten Commandments says, “Thou shalt not kill,” it doesn’t leave much discretion. Reword your rules as commandments that are precise and clear and easy to follow.
Do you resist being dictated to and bossed around by outside forces? In this case, reformulate your rules as guidelines or suggestions. Give yourself some leeway in certain situations. Reword it so that when you read it, it sounds like a good idea and not a demand.
However, be certain in advance that whether you choose a suggestion or command, the results will be profitable if followed consistently or even most of the time. There’s nothing worse than a bad idea or a rule that doesn’t work. Remember the basics: Find out what works. Verify that it works. And do it.
IMPACT OF Re/DOLLAR TO 65?
The rupee has crashed from Rs 45 to Rs 54 to the dollar, before recovering slightly to Rs 52.80 on Friday. Dismayed corporations and politicians want the Reserve Bank of India (RBI) to intervene in currency markets and prop up the rupee. This would be a terrible mistake. The rupee’s fall is not a technical monetary phenomenon. Rather, it signifies a loss of confidence in India by foreign investors, and by Indians too. Till recently confidence in India was high, and dollars flooded in from overseas Indians and foreign investors. Much of the black money that had earlier left returned through the Mauritius window. But now dollars are flooding out because people have lost confidence in the ability of the political system to make decisions or implement reforms. As long as confidence in India ebbs, so will the rupee. This creates problems. Corporations and banks that have taken dollar loans suddenly face hugely higher repayment and interest rates in rupee terms. Importers face much higher rupee bills. By making imports more expensive, the rupee’s fall can stoke inflation at a time when it is already over 9%. For all these reasons, people want the RBI to sell dollars and prop up the rupee. Caution, please. Remember that exactly the same arguments were put forward in Thailand by businesses and banks in 1997 to prop up that country’s falling currency. That propping up helped only temporarily, emptied Thailand’s treasury and sparked the Asian financial crisis. We must not fall into that same trap. India’s foreign exchange reserves of $308 billion may look big enough to warrant spending tens of billions on propping up the rupee. Danger: the benefit will be temporary but the damage to reserves may be permanent. Foreign loans coming up for repayment in the next six months total almost $150 billion. In normal times, lenders would happily re-lend this sum. But with investor confidence in India ebbing and the Eurozone crisis deepening, lenders cannot be depended on to re-lend maturing loans. The Eurozone banking system could go bust if European government bonds are downgraded sharply by rating agencies, something entirely on the cards. In the accompanying financial panic, investors will withdraw from all markets associated with ris, including emerging markets like India, and rush into safe havens like the US and just sit on cash. If that happens, dollar flows into India could come to a sudden stop. In that case, repayments of old loans will halve our foreign exchange reserves in six months, and deepen the panic. That is an extreme scenario. But even without a Eurozone banking collapse, confidence in India is ebbing. Several Indian businessmen are saying it is easier to get decisions and make investments abroad than in India. If even Indians are losing faith in India, will foreigners be any different? In this murky situation, the RBI must conserve its forex reserves and not squander its dollars in a vain attempt to strengthen the rupee. But it should use other weapons in its armoury.
On Thursday, it issued new rules limiting the net open positions of banks in foreign exchange, limiting some forms of currency speculations, and reducing the ability of importers and exporters to bet on the future of the rupee. These steps helped the rupee to recover from 54.25 to 52.80 to the dollar. However, technical fixes of this kind can have only a limited impact. They cannot reverse something as fundamental as loss of confidence in India. How do we restore that confidence? There is no quick-fix for this. Reputations are built slowly but lost quickly. Anger against corruption has reached boiling point, and that is a good thing. But the political reaction to public anger has not inspired confidence. Several people are being arrested on evidence that looks very thin, and seems guided more by politicking than a genuine attempt to catch the guilty. The opposition desperately wants to involve P C Chidambaram somehow in a scam originating in the DMK. The Congress government has responded by filing a case against telecom decisions taken by Pramod Mahajan when the BJP was in power. Many bureaucrats and businessmen have indeed been complicit in big corruption. But the current wave of arrests looks increasingly like vendetta than a genuine desire to root out corruption. So, no bureaucrat wants to take any decision for fear of being hauled up by a vendetta in later years. Businessmen are reluctant to invest in such a murky atmosphere. Optimists say the darkest hour is before dawn, economic fundamentals will soon reassert themselves and decision making will resume after the UP elections. Maybe so. But the immediate portents are not bright..
THE REUTERS INTERVIEW WITH JAMES GRICKARDS
(Covers US Treasury Dept efforts to trash dollar including shorting USD)
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