Earning Estimate from S&P 500

Read full Story Here

No Recession then When?

There have been a few calls as of late (Hussman, ECRI, Shilling) stating that we are currently in the next recession. Then there is everyone else. While the "optimistic" outlook is always more enjoyable to listen to - the problem is that the current "no recession" view is primarily predicated on current quarter growth rates looked at in isolation. These data points are then extrapolated into continuous future economic expansion. For example, in the 2013 CBO Budget (Excel file) the average economic growth rate used is 5.28% which is substantially higher than the 2% growth rate currently projected by the Federal Reserve. More importantly, neither the Fed, or the CBO, have forecasted a recession in future years. All assumptions are based on the expectations that somehow recessions have been repealed. This is hardly the case.

Happy Eid

Happy Eid to all Niftymama Readers

Nifty Outlook, Tuesday 21, 2012

I posted the following possibility of nifty resistance on July first week. It took little late to reach there and now a down move is more prominent.

Now both the resistance (falling & static) and 100 week SMA is producing strong resistance at 5400.

5250 to 5266 is first possible support zone. Short trader may book first profit at this level.

5365 is crucial for today

Bulls are struggling to protect 5365 which is today's Pivot. on closing basis it may be trend decider if closes below 5365

PE ratio and S&P 500

There is no reason to believe that this time its different. There is no indication on this historical chart that there was ever a major bear market following a P/E5 move from below to above 13.40. Contrary to this evidence there are plenty of perma-bears (who do well for themselves collecting fund managing fees) who warn us with weekly missives of the imminent demise of the stock market.
However, the historic data based on P/E5 suggests that we are experiencing a new bull market which may continue for quite a few years, which is the same conclusion arrived from the trough formation of the 50- and 200-month moving average of the S&P, an entirely unrelated indicator.

Happy Independence day

Niftymama wishes you all a very Happy Independence Day..............!!

SPY volume

Perhaps you've heard that trading volume was a bit light during last week's push to recent highs. Was it actually that light or just a case of the summer doldrums? The chart below plots the 5-day moving average of volume for SPY, the Exchange Traded Fund for the S&P 500, going back 5 years. It's a fairly good proxy for the overall market.

The dashed black line shows the average of each of the past six data points for August 10 since 2007 (in 2008, August 10 was a Sunday, so I used the 11th). The dashed pink line is the simple average of all data points on the chart. August 10 of last year was near the beginning of the meltdown into the October low -- and volume was fairly high. Even if you eliminate that particular August 10, the average is still higher than the pink line of all volume. I think we can safely reject the "summer doldrums" as the reason for light volume during the past week.
The green arrows mark the volume around the Christmas holidays each year, which is almost always a time of light trading. Of the 5 past holiday periods, the moving average of volume went below 100 million shares per day 3 times. The red arrows mark the only other times during the past 5 years that volume dropped below 100 million: the market peak of 2007, and now. Unusually light volume showed the reluctance to buy at the peak in 2007 -- and appears to be showing that same reticence now. Technical analysis is essentially studying the behavior of all market participants collectively.
Fund managers, analysts, and the individual investor can say anything they like, but what their behavior shows is that (except for 3 out of 5 Christmas holiday periods) the only other time they were this reluctant to commit funds was at the peak in 2007. I think this argues rather strongly that we are at or very near to an important market top. The S&P is less than 1% below the high from April 2 of this year. Whether we exceed that peak by a little or not is probably unimportant for this volume study.
Original content: SPY

Are you short on Nifty?

Are you short on Nifty? The question was popped up to me from one of my friend and critic. I was sure where he is trying to bring my notice. I replied "Yes". I am a technical player and he a positional trader. I was short as per my previous post and continue my positional advise. Ofter a trader lose money when he is very close to winning situation. Technically Nifty is in overbought, which is not one point. However when Nifty in such situation moved against our thought it only test our believes.

Let's see where your believe lies.

Nifty shown early sign of down move

Nifty has shown sign of down move

1. Nifty touched Monthly pivot and coming down
2. Corrective move seems complete at 5377
3. Bollinger band upper band could not be crossed
4. Nifty created shooting star at top of a rally which is very bearish
5. Volume is still missing at higher level

Nifty intraday update

Short Nifty for a possible target of 5350 then 5330, do your own research before. going short.

Nifty Range for August 8, 2012

Nifty range should be weekly pivot, and today Bulls need to protect second pivot of the week i.e 5312, else Nifty may target 5266 again and then obvious target would be 5200 next week.
Dow has formed shooting star at top of a rally, hence expect it to trade lower in short term, this will effect our Nifty to follow the suit.
Less volume at higher level suggest less demand, smart money is waiting for breakout and opportunists are waiting for a dip.

Nifty Mirror Image

I was analyzing possible Nifty movement for rest of the week and suddenly I amazed to visualize that Nifty has indeed created a mirror image of self over period of 2 years.
Going by the this image, we can expect sharp down move below 5000 then consolidation of 9 to 15 days before moving sharply above 5500.
Image is self explanatory, please go through it.

Sensex and Nifty movement on August 7

"Hammer-like candle can be positive on strength above its head." Aided by positive Global cues, Index traded gap-up above the Hammer, and finished 215 pts or 1.2% higher. Oil&Gas Index, thanks to
RIL's 5.6% gain, shot up 3%. Dollar-based indices outperformed on Rupee strength, and A/D ratio turned positive 2:1.
The action formed a Bull candle with a 105-pt gap-up area below its bottom. While the gap-up area 17208-313 is a technical support, the gap down area of 12th Jul at 17329-467, and 17500-600 are technical resistances. After strong gains yesterday, watch if the action cools down at the said resistances, or ..

Future premium reduces from 25 pts to 14. Gap-up action attempting to cover the gap-down area of 12th Jul. Reverse fails to reach/sustain above 5310-20.

Nifty Intraday Movement for August 6

"bias would be negative if the Index weakens and closes below the candle." Opening gap-down, Index weakened below the candle. However, refusing to close below it, Index recovered later to end only 26
pts or 0.1% lower. While other sectors finished mixed, Metal Index lost 1.6%. The A/D ratio ended negative, at 1:2.
The action formed a Counter Attack Bull, a Hammer-like candle with a long lower shadow. The shadow indicates intra-day bounce from the 200- day EMA. Such a candle can be positive on strength above its head. Watch, however, if the strength maintains beyond the morning session. Strength above 5166 would indicate a positive structure
Future premium increases from 19 pts to 25 Bounces intra-day from lower end of blue parallel channel
Reverse fails to reach/sustain above if holds 5280-90.

Nifty Trading level for August 3

As per 30 min chart, Volume suggest Nifty range for coming week as 5233 as resistance and 5105 major support. where highest concentration of volume can be found.
For today, Nifty support seems at 5150 to 5170 zone, risk takers may go long with strict stoploss of 5140.
As per Bramesh Nifty Future trend deciding level is 5187 and Nifty trend changer is 5105. Above this level, bulls will rule, below this level bears have upper hand.

Nifty outlook August 3 Friday

Tomorrow we can witness a pull down nifty move, which is a retro effect of hanging man created three day ago. Combining with RBI policy ECB policy and global cues, this all may drag Nifty to 5130. I see first support at around 5166, where all long position holders can book partial profit.

US Dow is still trading under pressure and may book of the highest loss of the year today.

Dow Jones Update

Dow Jones Opened 100 point down. Does it trigger short term global sell off??

US stocks opened lower on Thursday following disappointing comments from Mario Draghi, the president of the European Central Bank.

At a press conference, Draghi said the ECB would draw up a mechanism in the coming weeks to make outright purchases to stabilize stressed euro zone borrowing costs. The statement disappointed investors who had been hoping for strong action following his recent comments to "do whatever it takes" to save the euro.

The Dow Jones industrial average was down 56.99 points, or 0.44%, at 12,914.07. The Standard & Poor's 500 Index was down 7.82 points, or 0.57%, at 1,367.32. The Nasdaq Composite Index was down 22.99 points, or 0.79%, at 2,897.22.

FTSE update

FTSE lost all gain in just 8  min, this might be start of bearish month. Let's see,how US react on it.

Nifty Intraday Movement August 2

 

"bias can remain positive if trade sustains above the candle." Index mostly maintained above the candle, but ended only a marginal 21 pts or 0.1% higher. Healthcare Index outperformed, up 1.3%, and broader market also did well. Small/Mid-cap Indexes ended 1% higher, due to which, the A/D ratio ended at positive 2:1.
The action formed a High Wave, a candle with a small body and shadows on both sides. It indicates strength of last three days is moderating at higher levels, closer to previous high of 5268 and gap-down area. Move
above 5268 by Friday would be watched for faster retracement of fall. Failure could indicate lackluster structure.

Future falls into discount of 4 points from premium of 12. Testing previous high of 5268 and gap-down area 5280-5313. Reverse if holds 5240-45 or 5225-30.
Action : Sell in the range of 5268 – 5273
Targets : 5235 / 5215 / Lower 

Stop-loss : 5283

Bernanke's Dogs

Mr Pavlov knew that a common natural response for a dog that is about to be fed was to salivate, as we can see in Fig 1 in the chart above; and furthermore he also knew that various "stimulants" like ringing of the bell or blowing of a whistle did not create the same response (Fig 2). However, what Mr Pavlov discovered back in his day, was the fact that if a stimulant was constantly introduced while the dog was fed food (Fig 3), it would be conditioned to remember that specific stimulant (Fig 4) and start salivating even without the presence of food itself. It was a huge break through back in his day. Eventually, Mr Pavlov discovered that the dogs salivated as much to a stimulant (whistle, bell, noise) as to food itself, as they were trained and conditioned to do so
read full article

Nifty Daily Analysis

"After strong gains, watch if the action sustains above the candle after RBI policy." Index traded volatile around RBI policy. Down 205 pts from initial highs, it later recovered 250 pts, and ended 93 pts or
0.5% higher. Oil&Gas and Realty Index gained 1 to 2%, and the A/D ratio ended on a marginally positive note.
The action formed a Hanging Man, a Hammer-like candle with a longer lower shadow. The lower shadow stands for the late support, which wiped off the initial loss. The high of the candle touches 61.8% of the
preceding fall. Despite which, however, the bias can remain positive if trade sustains above the candle. Subdued otherwise.

Future premium reduces from 17 points to 12
Dip after RBI policy maintains above the falling resistance line Reverse if fails to reach/sustain above 5240-50

Monthly Nifty Movement Aug 12

Monthly Pivot level is upper cap is limited to 5374 and lower at 5058 with pivot @ 5202 to 5205

Nifty Range for August 1

Nifty has formed hanging man which is very bearish, however followup action is required for confirmation.
Today, Nifty may find very tough to cross 5252 and would give good opportunity to short Nifty.
Weekly pivot is 5100 hence it would give good support in near future (at least for this week).
No trade advise in 5252 to 5225 and if nifty do not sustain 5225 level then next target would be 5210 followed by 5180 and 5164