Trade, Live and Thrive

Saturday, May 26, 2012

S&P 500 - Triple Screen 'Technical Analysis' - Week: 21 May to 25 May, 2012 - Midpoint Holds

Learning from the Past Week:

We came into last week, with the market deep in the red.

As suggested last week (click) - the Channel Mid point held the Bears.

The MVWAP 34 on the EOW, also gave some solid support for the Bulls.

We had the Bulls smile with a green candle, after three red ones - Bingo!

What's next - up or down? Lets see the screens....

S&P 500: Long Term View (or) Month Chart (each candle is 1 month's price move) (or) EOM Chart:

S&P 500 - End of Month Chart (EOM) - 25 May, 2012.

The Middle line of our channel, stopped the Bears last week.

Bulls emphasized that they own this screen - with last week's action.

Closed the week above the 13 SMA, and below our other MAs.

Last three candles show a cool example of a bearish 'Three Inside Down' (click) even now.

S&P 500: Medium Term View (or) Week Chart (each candle is 1 week's price move) (or) EOW Chart:

S&P 500 - End of Week Chart (EOW) - 25 May, 2012.

Perfect landing on the MVWAP 34 and a nice bounce from there.

This screen is back to Neutral - with the Bulls having the last word.

Moving above 1333 would put life into the Bull action next week.

Bears look at breaking the MVWAP 34 on the downside.

S&P 500: Short Term View (or) Day Chart (each candle is 1 day's price move) (or) EOD Chart:

S&P 500 - End of Day Chart (EOD) - 25 May, 2012.

Bulls started the week with a Bang, and finished with a whimper.

Close below the 5 EMA, keeps this screen officially red for now.

Breaking the 10 EMA resistance and keeping above the Blue line should keep the Bulls in play.

Good show on the MACD Histogram after last week's + divergence.

Looking Forward into the next week:

Bulls have pulled one back.

Keeping it above 1300 for month close would be important for Bulls.

Breaking the MVWAP 34 on EOW - would be the next task for Bears.

Bulls have staved off an imminent midlife crisis, with last week's action.

Now to follow up that action with some consolidation.

Friday, May 25, 2012

EOD Technical Analysis, CNX Nifty - 25 May 2012 - Bearing Golden Crosses..

Nifty - End of Day - 25 May 2012

Continuing on the last post on this subject, lets do a long term study from 2008.

We were watching the 34 EMA and 200 DMA cross bearishly last week.

We also discussed the more famous 50 & 200 DMA* which have not yet crossed.

Golden Cross (we use the 200 DMA and 50 EMA - see link below)
http://marketsci.wordpress.com/2010/07/15/roundup-trading-the-golden-cross-2/

From the Chart:

A - The 2008 Fall : after a bearish cross.

B - The 2009 - 2010 Bull run : after a bullish cross

C - The 2011 Fall : We had a Bearish Cross

D - The 2012 Spike : A Bullish Cross

'D' as you can see, has produced very little for the Long Term Bull.

Notice that we had the 5 EMA/13SMA cross on the EOM as validation (click).

This EOM cross was valid above 5199 for May'12 as studied earlier this month (click).

Helped us avoid a Bull trap.

The effect of 'E' is what one wants to see - we shall watch that one..

Revision of the reads on MA crossovers (studied last at 'D' )... for the weekend.

http://stockcharts.com/school/doku.php?id=chart_school:trading_strategies:arthur_hill_on_movin

http://www.traderslog.com/moving-average-crossovers/

Tuesday, May 22, 2012

EOD Technical Analysis, CNX Nifty - 22 May 2012 - Long Term Crosses and Deflections

Nifty 50: Short Term View (or) Day Chart, each candle is 1 week's price action (or) EOD Chart:

Nifty - End of Day - 22 May 2012

In our weekend analysis (click) we saw support on the Fibonacci 61.8%, as seen on EOD chart above.

We also studied that, the deflection of the 34 EMA and 200 DMA would be a plus from long term perspective.

As seen in the first circle - the above MAs are touching at end of trade today (2 points away from crossing).

The more famous Golden Cross refers to the 50 EMA and 200 DMA cross - the 50 EMA in pink is also shown above.

Meanwhile the Nifty is consolidating above the Fib61x - second circle.

The MACD looks like its bottoming out - third circle.

Nifty therefore has to take off above today's close - if the Bulls have to see bright, long term future.

If that does not happen - the 50 EMA & 200 DMA (Golden Cross) should deflect in the days to come (for the Bulls to let out a LONG sigh of relief).

We shall watch that space.

Sunday, May 20, 2012

CNX Nifty 50 - Triple Screen 'Technical Analysis' - Week: 14 May to 18 May, 2012 - The Median and the Nifty..

Learnings from the Past Week:

We went into the last week with all screens showing red (click).

We said that the Bears would see the Dawn of 'Bull' times.

The Nifty shot up 100 points from the week's bottom on Friday (click).

This move was with the Fib61x (EOD) and 200 DMA (EOW) as supports.

Are the supports strong enough to warrant a decisive Bull up move- or is this a false dawn?

Lets find out...

Nifty 50: Long Term View (or) Month Chart, each candle is 1 month's price action (or) EOM Chart:

CNX Nifty 50 - End of Month (EOM) Chart - 18 May, 2012.

The EOM chart looks weak, with the Price below the 34 EMA.
You would have noticed by now, that the volume has been falling during this down move.
This means either that the real momentum is yet to kick in - or that the Bulls are just bidding time.

Nifty 50: Medium Term View (or) Week Chart, each candle is 1 week's price action (or) EOW Chart:

CNX Nifty 50 - End of Week (EOW) Chart - 18 May, 2012.

The Nifty is at the Median, of our channel.

Bulls bounced off the 200 DMA - weekly.

We have a channel break favoring the Bears on the STS.

The long tail of the week's candle shows the Bull resilience.

Bulls had the volume up - Bears seem to keep it down - see the red and green arrows above.

Nifty 50: Short Term View (or) Day Chart, each candle is 1 week's price action (or) EOD Chart:

CNX Nifty 50 - End of Day (EOD) Chart - 18 May, 2012.

We notice that the MACD Histogram is getting shorter and heading to the plus zone.

The Nifty is at the Median, of this smaller. EOD channel too.

Bulls found support on the the Fibonacci 61.8% of the 2008 low to 2010 high, marked on the EOD above.

The 34 EMA came within 15 points of bearishly crossing below the 200 DMA, on Friday's low.

Bounce from this low was 100 odd points.

The 5 EMA - EOD was the resistance for the Bulls on Friday.

Looking forward into next week:

Staying above the Fib 61x on the EOD & the 200 DMA on the EOW - the Bulls stay good for a strong up move.

Bearish cross of the 34 EMA & 200 DMA on the EOD, would be a long term blow for the bulls.

Looking at the above and the rest of our weekly studies - one smells consolidation in the air.

Intra-week updates shall share that piece of the action.

BSE Sensex - Ichimoku Study - Week: 14 May to 18 May 2012 - Pink of Stealth

Our Conclusion of last week, was on the dot (click).

Last 7 Signals seen on BSE 30 - Week Chart (EOW) as on chart below:

1. The Kijun sen cross: Weak Bullish Signal (K)

2. The Flat Kumo: Bullish Signal (Ko)

3. The Tenkan Sen/Kijun Sen Cross: Weak Bullish Signal (T)
4. The Kumo Breakout: Bearish Signal (B)

5. Chikou Span Cross: Strong Bearish Signal (C)

6. The Kijun Sen Cross: Strong Bearish Signal (K)

7. The Tenkan Sen/Kijun Sen Cross: Strong Bearish Signal (T)

The arrows on the chart point to...

3. The Chikou Span (Pink Color Line) is stealthily approaching the Price line looking at crossing it maybe next week - that would be a Bullish Signal.

4. This week we see the Red Line (Tenkan Sen) cross the Blue line (Kijun Sen) from above. This signal is Bearish, also 'cause it happens below the Kumo its Strongly Bearish!.

5. The Oscillator is ticking into the minus.

Conclusion:

Ever since the Kumo Breakout (B) we have had 4 Red Weeks + 4 Bearish Signals in a row.

Next week the Longs have a shot at a Green Bullish Signal as in '3'.

Nifty although deep in the red currently - has a potential to pause and even reverse based on above.

BSE 30: Medium Term View (or) Week Chart (or) EOW with the Ichimoku Cloud:

The BSE Sensex 30 - End of Week Chart - 18 May, 2012.

Introduction (for New Readers):

.....Regulars can skip this part......

We do a weekly Ichimoku study, to complement our 'Triple Screen Technical Analysis', of the markets that we track, in our quest to master Technical Analysis.

When taking the 'weekly' time frame, to use the Ichimoku Cloud, we need to consider the following..

The standard settings for an Ichimoku Kinko Hyo chart are 9, 26, 52 and are used on EOD charts.

When Ichimoku was created back in the 1930s, a trading week was 6 days long. So we have one and a half week(9), one month(26) and two months(52).

Now that the trading week is 5 days, we should actually use 7, 22 and 44 instead.

However, the majority of systems, worldwide, still use the old settings 9, 26, 52.

We need to study markets, on a weekly basis on this Blog.

How do we fit 52, 26 and 9 into that need? With one candle being one week?

There are 52 weeks in a year, 26 weeks form two quarters (or a half year) and 9 weeks equal about 2 months. Fits the old logic - albeit differently.

Presto, we have a longer term view with the same settings!

So, if you like to move off the beaten track, for a change... do read on...

Quick Reference :

Chikou Span - pink line,

Kijun Sen - blue line,

Senkou Span A - black line,

Senkou Span B - grey line,

Kumo - grey shaded area,

Tenkan Sen - red line.

Useful resources (free) from the Web:

http://www.freestockcharts.com/

http://www.kumotrader.com/ichimoku_wiki/index.php?title=Main_Page

Welcome Read

The Trading methods used here are suitable for those who (like me) are always Learners in the World Market (never presuming Mastery).

One learns with 'Technical Analysis' using Moving Averages, Channels, Time frames, Pattern & Candlestick Analysis, Fibonacci, Ichimoku Cloud, Oscillators & other Technical Indicators.

To comprehend the Dynamics of any Market, Peer Wisdom suggests, that we show plenty of Patience, keep it real Simple and adopt tons of Discipline.

We therefore use the same framework 'Patiently' every week - 'Simple' Technical Analysis Tools are repeated - The 'Discipline' of keeping a Neutral view is maintained.

So welcome to my notes - posted here for my Friends and Family.

Some Quotes..

There are times when playing the stock market that your money should be inactive - waiting on the sidelines in cash - waiting to come into play. In the stockmarket - time is not money - time is time and money is money. Often money that is just sitting can later be moved into the right situation at the right time and make a vast fortune – patience – patience. Patience is the key to success not speed.

Jesse Livermore.

That's been one of my mantras - focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it's worth it in the end because once you get there, you can move mountains.

Steve Jobs.

Discipline is the bridge between goals and accomplishment.

Jim Rohn.

Favorite Quote

"Why do we trade?

To be sure, trading allows us independence, the opportunity to work for ourselves. Trading also offers the prospects of a lifestyle in which evenings and weekends need not be consumed by work. Some of us crave the competitive aspect of trading, doing fresh battle each day. Others approach trading as a puzzle to be solved, deriving a sense of intellectual achievement. Finally, there is income. A successful trader can make seven figures in a year—and many of the traders I work with are living proof of that.

So why do they trade? Once you have the money, all of trading’s lifestyle advantages could easily be yours. Needs for competition and intellectual stimulation could be met in so many other ways. Why do traders remain traders long after they’ve won the game?

The great professions are those that serve as personal playing fields. They are the arenas we choose to express and develop ourselves. In mastering a discipline, we cultivate self-mastery. In writing a poem or placing a large trade, we capture—in a single act—our vision of how we see the world at that moment.

The great occupations are great precisely because they are such meaningful playing fields. Long after we’ve earned fame and fortune, the calling remains to be more than we are, to return to the arena and do battle with our limitations. The profound urge to extend the human grasp is common to all the great callings. To run faster, to capture more beauty, to predict ever better: in no small measure, our work is our pursuit of the godlike, however fleeting.

Maybe it is our different images of the godlike that animate our career choices.In work we find something divine within ourselves. Whether as scientists, monks, or traders, we strive for those moments when we are just a little closer to perfection, a little nearer to immortality. That is why we trade"

.... Brett N. Steenbarger

Inspiration

The Parable of Talents...

14 For the kingdom of heaven is as a man travelling into a far country, who called his own servants, and delivered unto them his goods. 15 And unto one he gave five talents, to another two, and to another one; to every man according to his several ability; and straightway took his journey. 16 Then he that had received the five talents went and traded with the same, and made them other five talents. 17 And likewise he that had received two, he also gained other two. 18 But he that had received one went and digged in the earth, and hid his lord's money. 19 After a long time the lord of those servants cometh, and reckoneth with them. 20 And so he that had received five talents came and brought other five talents, saying, Lord, thou deliveredst unto me five talents: behold, I have gained beside them five talents more. 21 His lord said unto him, Well done, thou good and faithful servant: thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord. 22 He also that had received two talents came and said, Lord, thou deliveredst unto me two talents: behold, I have gained two other talents beside them. 23 His lord said unto him, Well done, good and faithful servant; thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord. 24 Then he which had received the one talent came and said, Lord, I knew thee that thou art an hard man, reaping where thou hast not sown, and gathering where thou hast not strawed: 25 And I was afraid, and went and hid thy talent in the earth: lo, there thou hast that is thine. 26 His lord answered and said unto him, Thou wicked and slothful servant, thou knewest that I reap where I sowed not, and gather where I have not strawed: 27 Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury. 28 Take therefore the talent from him, and give it unto him which hath ten talents. 29 For unto every one that hath shall be given, and he shall have abundance: but from him that hath not shall be taken away even that which he hath. 30 And cast ye the unprofitable servant into outer darkness: there shall be weeping and gnashing of teeth.

The Holy Bible: Matthew - Chapter 25.