Trade, Live and Thrive: 03/18/12

Sunday, March 18, 2012

The BSE Sensex 30 - Ichimoku Study - Week: 12 March to 16 March 2012 - Cloudy Days ahead..

BSE 30 - End of Week Chart - 16 March 2012

All recent signals are posted here (last week's post). Please read up on them, along with the Write up mentioned in the 'Preamble', especially if you are a new to this study.

We analyzed the Flat Kumo on the DJI30 (here). We shall do the Sensex, the same favor. After all, we are already halfway into flat zone - see 'H'. As in the DJI study we notice that the Senkou Span B (grey line) appears flat starting around Dec'11 and after a break in the zone marked 'H'.

The same principle of attraction to equilibrium that we read in the DJI study seems to have pulled the Sensex up and looks like this can continue. The Index, gets into the Kumo (cloud) if it moves up any more, and we need to see if the resistance of the last rise, can be cracked this time.

The M-VWAP gave us a good insight last week and we shall follow the 34 period M-VWAP on this study. If interested do read up on same here or on other resources.

http://www.investopedia.com/articles/trading/11/trading-with-VWAP-MVWAP.asp#axzz1pU4w3iRe

CNX Nifty 50 - Triple Screen 'Technical Analysis' - Week: 12 March to 16 March, 2012 - Bear Hug.

Recap: With the Nifty moving above our mark for Monday last - of 5343, all the way to the Wall at 5484, we had the up move of the week. Thereafter as anticipated (see Looking Forward and EOD here) the Wall sent the Index back towards the 200 DMA. Nifty took support on the 34 EMA (EOD). After the expected volatility of the Budget, where to now?

Nifty - End of Month Chart - 16 M arch 2012

CNX Nifty 50 - Month Chart (each candle is 1 Month's price action): Still in a good place for bulls as they anticipate the 5 EMA crossing over the 13 EMA as a confirmation of long term Bull trend. This is in addition to the 34 EMA over the 200 DMA and the Golden Cross which are already on (EOD). Currently, however this month's candle is in line to form a Bearish Harami.

Nifty - End of Week Chart - 16 March 2012

CNX Nifty 50 - Week Chart (each candle is 1 Week's price action): The Bulls have not been able to get a single green week after bouncing back from our channel top line (red), 4 weeks ago. Post the bounce off the 34 EMA the week before, it has shown some intent to give this bugbear another shot.

Nifty - End of Day - 16 March 2012

CNX Nifty 50 - Day/EOD Chart (closing prices of each Day in a line): Last week's action was in the range we expected. Keeping above the 34 EMA another shot at the Wall (5484) is in order. If it stays below the 5 EMA however, a bearish cross of the 5/13 EMAs would again send it on a tail spin. So one watches these levels.

Looking Forward: With US and Europe in the oversold zone looking at a correction for health reasons, the Indian market would have to swim against the tide to make an up move. 34 EMA on the EOD and the Wall are important levels. Intra Week updates shall be up.

The Dow 30 - Ichimoku Study - Week: 12 March to 16 March 2012 - Gravity and Equilibrium.

DJI 30 - End of Week Chart - 16 March 2012

Our previous Study with the 'Cloud' (post here) proclaimed that the 'Bulls have it all'. And yes, they did decisively surpass, last year's high, as if to emphasis the point.

Please read previous study, for ALL the signals/indications that the Cloud has thrown up recently. As you would have read in our first Ichimoku post's reading material, Ichimoku is all about using the messages from multiple signals, not just the latest.

This weekend we focus on one aspect of the Cloud - the 'FLAT Kumo'. As you can see - marked 'G' in the chart, the Senkou Span B (grey line) appears flat from now on..

We know that the SENKOU SPAN B is the (HIGHEST HIGH + LOWEST LOW)/2 for the past 52 periods time-shifted forwards (into the future) 26 periods. Look at 'F', a trend less time, which fits the above, as the formula would produce a flat line just about now.

The Flat Span implies Equilibrium and because Price loves to get back to equilibrium, the flat senkou span B becomes strong attractor of the price-line towards it.

One can see the Flat Senkou Span B, doing exactly this, during Dec'11.

Could be early times for that to happen, but one likes to be in the know. Why else study?

S&P 500 - Triple Screen 'Technical Analysis' - Week: 12 March to 16 March, 2012 - Sedate Highs..

Recap: By the end of last week, (see Looking Forward) we saw the SP500 on Bull mode, but for the 5/13 EMA cross. Early this week the Bulls took care of that minor detail, and moved from the bottom end of their channel, (see EOD) to the exact top end...where despite crossing last year's high, the Bulls hesitate...lets find out why..

S&P 500 - End of Month Chart - 16 March 2012

S&P 500 - Month Chart (closing prices of each month in a line): The Price line here, looks like its making a steady progress, to the red channel top. Above all short term EMAs, and with a decent rate of climb, this view looks good for the Bulls. Lets get closer, with the chart below.

S&P 500 - End of Week Chart - 16 March 2012

S&P 500 - Week Chart (each candle is 1 Week's price action): Sticking to the bottom of our weekly channel's center line, steadfastly, for a long time now.. the Index is again in a position of strength. The only thing going for the Bears, would be the clear divergence between the price and the Histogram below it. So will the price make it to the channel top? Zoom in below..

S&P 500 - End of Day Chart - 16 March 2012

S&P 500 - Day (EOD) Chart (each candle is 1 Day's price action): With a dedication almost boring, the Index is stuck to the Day Channel's top line, a mite below the Weekly channel's center line, for ages now. If this continues, both Bulls and Bears will fall asleep. Nah! Just kidding :). Divergences are becoming persistently loud here, as one can see from the STS Indicator below.

Looking Forward: A decent correction looks like the best medicine for a comatose Bear and Tired Bull. Problem is, oversold Indices can go on & on, in the same track, for a long long time. However lets get brave and make a risky call....Correction time :)

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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.