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TRADING DAIRY FOR 31/07/2009

30/07/2009

Markets Once Again Proved That They Do Not Like Shorts If Created We Will Squeeze It Which Shows That Markets Not Willing To Go Down And Says To Buy On Every Dip It Makes For Further Rally Seems That Tomorrow We Can Close Near 4700 Or Above As Close Again Above 4560 Levels Near The Days High. So Now The Sl For Long Is 4470 Closing And Shorts Or Week Longs Are Out Form The Market. But Also We Are Near Key Resistance So Please Remain Cautious And Us Trailing Sl

LEVEL FOR THE DAY

TECHNICAL OUTLOOK :

Imp Support 4540, Imp Resistance 4600,

Likely Trading Range 4510-4630,

Trade on long Above 4515 and Vice versa

Note :- Please don’t use this levels when gap up or gap down. Also either side band is breached shall show breakout in either direction, and close above / below the intra band shall continue with the same trend for next day and can continue for for BTST OR STBT.

CHARTS AS PER 30/07/2009

INSTITUTIONAL ACTIVITY

Daily Trends in FII Derivative Trades – July 30, 2009

	BUY		SELL
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	201807	4584.28	252699	5741.82
INDEX OPTIONS	202957	4529.26	205186	4543.88
STOCK FUTURES	163045	4786.36	177591	5292.40
STOCK OPTIONS	986	27.82	239	7.77

INSTITUTIONAL ACTIVITY

FII & DII Turnover (BSE + NSE)

(Rs. crore)
	FII			DII
Trade Date	Buy	Sales	Net	Buy	Sales	Net
30/7/09	4,759.84	4,393.03	366.81	1,962.92	2,249.59	-286.67
29/7/09	2,533.12	2,701.91	-168.79	1,703.66	1,577.43	126.23
28/7/09	3,459.31	3,518.07	-58.76	1,682.61	1,234.39	448.22
Jul, 09	56,114.98	58,061.70	-1,946.72	33,328.89	27,826.03	5,502.86
Since 1/1/09   *	311,931.92	303,207.37	8,724.55	165,057.99	147,341.89	17,716.10

NIFTY TREND SHOWN

CHARTS AS PER 29/07/2009

Have We Reached a Top?

 Have We Reached a Top? CLICK MORE

"Does the Elliott Wave Principle apply to individual stocks?"(By Vadim Pokhlebkin)

"Does the Elliott Wave Principle apply to individual stocks?"

 

This question is one of the most frequent that readers ask.

 

To answer it, you have to understand how the Wave Principle works and accept its two basic premises: 1) Markets trends reflect the collective emotions of investors, and 2) Markets are patterned, not random.

 

Of course, these assertions go against the mainstream investment assumptions which claim precisely the opposite -- that markets are rational, random and therefore rarely predictable. The dominant theory among these is the Efficient Market Hypothesis (EMH). First proposed in the 1960s, it states that the price of a market security is always “efficient” because investors are rational beings. Therefore, prices simply can't ever be too high or too low; they are always “just right.” Which is a comforting thought -- or, rather, it was a comforting thought until the EMH fell flat on its face in the current crisis.

 

The Wave Principle, on the other hand, says that market prices are inefficient, because they are regularly driven to extremes by mass psychology -- not by reason. Yes, individuals can be quite rational, but groups and crowds are not; they are emotional. In the financial markets -- which are nothing but large crowds buying and selling securities -- mass emotions swing from one extreme to the other, taking over individuals’ rational impulses. Most investors simply end up copying the actions of others, regardless of whether it’s rational to do so.

 

So when you count waves in your favorite market, you're really counting the turns and trends in the collective optimism and pessimism of people who trade it. And however illogical these swings can get, the good thing is that they occur in recognizable Elliott wave patterns; the Principle describes 13 of them. Once you learn to spot these patterns you can learn to forecast the market's next move -- just like Ralph Nelson Elliott first did back in the 1930s.*

 

The bigger and more liquid the market you follow, the stronger the influence of the herd psychology will be. That's why the answer to the question "Does the Wave Principle apply to individual stocks?" is always -- "Yes," but with a few caveats.

 

---

 

The main caveat is investor participation. Penny stocks don't have enough players to accurately reflect a true mass psychology, so they will rarely trace out consistent Elliott wave patterns. On the other hand, patterns in large and mid-caps are more often reliable. But even with those, investor participation may not be big enough to overpower outside influences -- e.g., what the competition is doing; government policy; whether the CEO is having personal problems, etc. With a single stock, those are often the decisive factors (besides investors' collective emotions).

 

How do you apply Elliott to individual stocks, then? Robert Prechter, EWI's president and a recognized Elliott wave authority, gives this simple advice: Avoid trying to analyze each issue on an Elliott basis unless a clear, unmistakable wave pattern unfolds before your eyes and commands attention. Decisive action is best taken only then.

 

---

* We owe the remarkable discovery of the Elliott Wave Principle to Ralph Nelson Elliott, born on July 28, 1871 in Marysville, Kansas. Bedridden at the age of 58, Elliott needed something to occupy his mind, and he turned his full attention to studying the behavior of the stock market. Investigating the possibility of form in the marketplace, Elliott examined yearly, monthly, weekly, daily, hourly and half-hourly charts of the various indexes covering 75 years of stock market behavior.

 

In May 1934, two months after his final brush with death, Elliott's observations of stock market behavior began coming together into a general set of principles that applied to all degrees of wave movement in the stock price averages. Today's scientific term for a large part of Elliott's observation about markets is that they are "fractal," coming under the umbrella of chaos science, although he went further in actually describing the component patterns and how they linked together. 

As a result of Elliott’s pioneering research, today, thousands of institutional portfolio managers, traders and private investors use the Wave Principle in their daily investment decision-making. Ralph Elliott undoubtedly would be gratified to see it.

TRADING DAIRY FOR 30/07/2009

29/07/2009

Markets Has Close On Negative Bais Holding The Technical Level At 4500 And Facing Resistance At 4600 And Getting Support Near 4400 Also Tomorrow Being Expiry And Inflation Day So Market Can Be Volatile Also For Tomorrow Rsi Is Showing +Ve Divergence While Ss At Negative Divergence And Market Also Holding 4500 Levels So If Tomorrow Globle Ques Are –Ve We May Continue The Downtrend And May Try To Find Support At 4400 If 4470 Is Breached Still There Is No Clear Indication For Downtrend So Please Play With Strick Trailing Sl . And Shorts Can Have Sl At 4560 While Long Sl Is 4390  

LEVEL FOR THE DAY

TECHNICAL OUTLOOK :

Imp Support 4470, Imp Resistance 4555,

Likely Trading Range 4430-4600,

Trade on long Above 4480 and Vice versa

Note :- Please don’t use this levels when gap up or gap down. Also either side band is breached shall show breakout in either direction, and close above / below the intra band shall continue with the same trend for next day and can continue for for BTST OR STBT.

INSTITUTIONAL ACTIVITY

Daily Trends in FII Derivative Trades – July 29, 2009

	BUY		SELL
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	179480	4145.58	177485	4111.28
INDEX OPTIONS	107855	2436.88	114229	2560.73
STOCK FUTURES	125986	3738.02	145045	4306.59
STOCK OPTIONS	17	0.74	455	12.67

INSTITUTIONAL ACTIVITY

FII & DII Turnover (BSE + NSE)

(Rs. crore)
	FII			DII
Trade Date	Buy	Sales	Net	Buy	Sales	Net
29/7/09	2,533.12	2,701.91	-168.79	1,703.66	1,577.43	126.23
28/7/09	3,459.31	3,518.07	-58.76	1,682.61	1,234.39	448.22
27/7/09	2,946.97	2,507.43	439.54	1,381.31	1,660.28	-278.97
Jul, 09	51,355.14	53,668.67	-2,313.53	31,365.97	25,576.44	5,789.53
Since 1/1/09 *	307,172.08	298,814.34	8,357.74	163,095.08	145,092.30	18,002.78

TRADING DAIRY FOR 29/07/2009

28/07/2009

Nifty Not Showing Strength Above 4600 And As An When It Tried To Cross It Failed Due To Lac Of Momentum Also There Is Negative Divergence In Ss And Rsi So May Be A Down Day For Tomorrow If Not Crossed Desessively Above 4600 Also Unless We Donot Close Below 4300 The Trend Remains Up And 4400 Becomes Strong Supports Markets Can Make New High Also So Hold Long With Sl 4500

LEVEL FOR THE DAY

TECHNICAL OUTLOOK :

Imp Support 4545, Imp Resistance 4585,

Likely Trading Range 4525-4605,

Trade on long Above 4556 and Vice versa

Note :- Please don’t use this levels when gap up or gap down. Also either side band is breached shall show breakout in either direction, and close above / below the intra band shall continue with the same trend for next day and can continue for for BTST OR STBT.

INSTITUTIONAL ACTIVITY

Daily Trends in FII Derivative Trades – July 28, 2009

	BUY		SELL
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	39103	929.93	35491	840.22
INDEX OPTIONS	22025	487.54	19664	434.31
STOCK FUTURES	104402	3148.94	102924	3048.57
STOCK OPTIONS	320	11.11	179	5.59

INSTITUTION ACTIVITY

FII & DII Turnover (BSE + NSE)

(Rs. crore)
	FII			DII
Trade Date	Buy	Sales	Net	Buy	Sales	Net
28/7/09	3,459.31	3,518.07	-58.76	1,682.61	1,234.39	448.22
27/7/09	2,946.97	2,507.43	439.54	1,381.31	1,660.28	-278.97
24/7/09	3,061.70	2,398.68	663.02	1,302.52	1,509.07	-206.55
Jul, 09	48,822.02	50,966.76	-2,144.74	29,662.31	23,999.01	5,663.30
Since 1/1/09 *	304,638.97	296,112.43	8,526.54	161,391.42	143,514.87	17,876.55

CHARTS AS PER 28/07/2009

Everything Rises and Falls Together in All-the-Same-Market Index(By Susan C. Walker)

Many investors and their financial managers have come to the same shocking conclusion over the past year: that the tried-and-true method of spreading assets around in different markets to avoid risk no longer works. A story in the July 10 edition of The Wall Street Journal amusingly quoted one financial advisor who stood before a group of his peers and said, "Hi. My name is Carl, and I'm a recovering asset-allocationist."

The story goes on to say that "asset allocation, a bedrock of investing for decades, appeared to fail miserably in 2008. The conviction shared by most investors -- that they should spread their money across myriad asset classes to minimize losses -- was shaken as nearly all markets tumbled in unison."

The truth may have dawned slowly for some, but Bob Prechter started writing in 2002 about how all financial markets were trending together, thanks to the bubble created by too much credit. Later, one of his subscribers suggested that he put together an index. He did, and published it in 2007. In these two excerpts and chart, Bob explains why All the Same Market is such an important concept. After all, it explains why so many people have taken hits to their investments, no matter how wide they have spread them.

* * * * *

Excerpted from Elliott Wave Theorist, December 2007

We at Elliott Wave International invented the phrase “All the Same Market” to refer to the coordinated trends in diverse financial markets that we saw emerging in 2002. … Our new index, the All-the-Same-Market Index, or ASMI, comprises the following eight markets:
S&P 500
Nasdaq Composite index
Gold
Crude oil (Bloomberg West Texas Intermediate (WTI) Cushing)
CRB All Commodities index
Real Estate (US Census Bureau median sales price for new, privately-owned, single-family residential structures)
U.S. 10-year note (generic first future price)
US$ Index, inverted

… Strikingly, this index has not meandered around but marched up and down in distinct trends. Given this noticeable order, we think our index tracks something singular and real, namely the exceedingly rare orientation of the financial marketplace in which the market treats all investments not as competing, somewhat exclusive options but rather as part of a vast array of available items on a smorgasbord where investors can graze among the offerings, blithely paying for them all with the massive amount of credit made available by the banking system….

Why is the ASMI important? To quote the former chairman of Citigroup (from last July), “When the music stops, in terms of liquidity, things will be complicated.” Well, this index will tell us when the music has stopped. As long as the uptrend from 2002 remains intact, the magic levitation will continue. But when the biggest credit-fueled investment mania of all time terminates, this index will tell us so by breaking its lower trendline. At that point, it will indicate that the deflationary crash—the unwinding of the great credit bubble—is finally under way.

 Excerpted from Elliott Wave Theorist, June 2009

 The Partial Recovery is Already Maturing
Late February-early March was a great time to step aside from our bearish opinion. The outlook for a rally that would be “sharp and scary for anyone who is short” has pretty well come to pass. Our “All the Same Market” theme has ruled the entire time. In just three months, the S&P has leaped over 40 percent, the dollar has plunged 13 percent, gold, silver, oil and the CRB index of commodities have all rallied, real estate deals have picked up, and the economy is showing signs of recovery. Our prediction for a temporary turn toward optimism meant a rise in the availability of credit, which has fueled all these trends and events. These outcomes are just as one would expect from a turn toward optimism in a deflationary environment where the ebb and flow of liquidity is the financial tail on the social-mood dog.

It has been breathtaking to watch the swift return to all the old false beliefs: the bull market is back; inflation is the main threat; we are running out of oil; real estate is a bargain; and the economy is setting up to boom. We explicitly forecast that investors and economists would return to optimistic views, and it has happened. This is the power of a Primary degree second wave. It shows up in the rally in our All-the-Same-Market Index (ASMI), as shown in Figure 1.

Earnings: Is That REALLY What's Driving The DJIA Higher?(By Vadim Pokhlebkin

It's the season for corporations to report their earnings, and everywhere you turn, analysts talk about the influence of earnings the broad stock market:

 

• Street Gains On JPMorgan Earnings, Economy (Forbes)
• Wall St slips as earnings spur caution (Reuters)
• Stocks Show Little Reaction to Latest Earnings (The New York Times) 

With so much emphasis on earnings, what you're about to read next may come as a shock.

 

The idea of earnings driving the broad stock market is a myth.

 

When making a statement like that, you'd better have proof. Bob Prechter, EWI's founder and CEO, presented some of it in his 1999 Wave Principle of Human Social Behavior (excerpt):

 

Are stocks driven by corporate earnings? In June 1991, The Wall Street Journal reported on a study by Goldman Sachs’s Barrie Wigmore, who found that “only 35% of stock price growth [in the 1980s] can be attributed to earnings and interest rates.” Wigmore concludes that all the rest is due simply to changing social attitudes toward holding stocks. Says the Journal, “[This] may have just blown a hole through this most cherished of Wall Street convictions.”

 

What about simply the trend of earnings vs. the stock market? Well, since 1932, corporate profits have been down in 19 years. The Dow rose in 14 of those years. In 1973-74, the Dow fell 46% while earnings rose 47%. 12-month earnings peaked at the bear market low. Earnings do not drive stocks.

 

And in 2004, our monthly Elliott Wave Financial Forecast added this comment and chart:

 

 

 

Earnings don’t drive stock prices. We’ve said it a thousand times and showed the history that proves the point time and again. But that’s not to say earnings don’t matter. When earnings give investors a rising sense of confidence, they can be a powerful backdrop for a downturn in stock prices. This was certainly true in 2000, as the chart...shows. Peak earnings coincided with the stock market’s all-time high and stayed strong right through the third quarter before finally succumbing to the bear market in stock prices. Investors who bought stocks based on strong earnings (and the trend of higher earnings) got killed. 

So if earnings don't drive the stock market's broad trend, what does? The Elliott Wave Principle says that what shapes stock market trends is how investors collectively feel about the future. Investors' mood -- or social mood -- changes before "the fundamentals" reflect that change, which is why trying to predict the markets by following the earnings reports and other "fundamentals" will often leave you puzzled. The chart above makes that clear.