Option Demystified

 Everything from Short Build up, long build up, short covering, long unwinding. Picture worth a thousand words.

If you notice the PCR (put/call ratio) generally forms a bottom or top before NIFTY does & is an excellent indicator /precursor of when the NIFTY should give a reversal in trend.

#1: When PCR crosses over 1.50 and stays above 1.50 levels for couple of days we will see the Bullish Trend continuing in Nifty. It also indicates that the Put writers are too strong and the Put buyers have bought the options for hedging their long positions in Nifty.

#2: Similarly if PCR crosses below 0.80 and stays below that level for couple of days we will see the Bearish trend continuing in Nifty. It also indicates that the Call writers are too strong and the Call buyers have bought the options to hedge their short positions in Nifty. 

For Original Post click here

Merry Christmas & Happy New Year 2014

Sensex flirting with all time high, Dec 24, 2013

Sensex is firmly up till the time, it can hold 19727 level. Sensex may withness Santa Rally today.

8 Ways The Taper Is Going To Affect You And Your Family

Submitted by Michael Snyder of The Economic Collapse blog,
The unelected central planners at the Federal Reserve have decided that the time has come to slightly taper the amount of quantitative easing that it has been doing.  On Wednesday, the Fed announced that monthly purchases of U.S. Treasury bonds will be reduced from $45 billion to $40 billion, and monthly purchases of mortgage-backed securities will be reduced from $35 billion to $30 billion.  When this news came out, it sent shockwaves through financial markets all over the planet.  But the truth is that not that much has really changed.  The Federal Reserve will still be recklessly creating gigantic mountains of new money out of thin air and massively intervening in the financial marketplace.  It will just be slightly less than before.  However, this very well could represent a very important psychological turning point for investors.  It is a signal that "the party is starting to end" and that the great bull market of the past four years is drawing to a close.  So what is all of this going to mean for average Americans?  The following are 8 ways that "the taper" is going to affect you and your family...

Full article
http://www.zerohedge.com/news/2013-12-20/guest-post-8-ways-taper-going-affect-you-and-your-family

The Most Important FOMC Meeting Ever

Wondering what a 'market' looks like up, close, and personal in the seconds before, during, and after this week's "most important FOMC meeting ever." From SPY's 50-second lead on the news release to VIX's gap, and from crossed markets to e-mini futures leading the premature charge, Nanex's charts are a smorgasbord of SEC-inspiration...

Full Story

http://www.zerohedge.com/news/2013-12-20/ultimate-chartbook-most-important-fomc-meeting-ever

The Annotated (223 Year) History Of The US Bond 'Bubble'

The last few days have seen significant shifts in the term structure of US Treasury bonds; auctions have not gone well and despite the world's expectations for 'taper' to lead to a surge in rates, the long-end of the bond-market has rallied. While Goldman might believe the 'bond bubble' is starting to pop, the following 223 years of Treasury yields (through free-markets and centrally-planned) sheds some light on what the 'new normal' level of rates really represents because, as we noted previously, the world is so levered now that any 'reversion' in rates is simply unthinkable.

This post has been taken from Zero Hedge for educational purpose for my readers.
 Link: http://www.zerohedge.com/news/2013-12-21/annotated-223-year-history-us-bond-bubble
 

Nifty Outlook Dec 18th, RBI Meet

The downtrend seems secure and the bears are confident and happy. The share price is below the confirmation level and the signal is suggesting to STAY IN CASH.

Technically we are on right side currently, however tomorrow is RBI Policy Meet and market is poised to take direction. No rate hike can boost the sentiments as market is speculating rate hike again because of egoistic high inflection.

Yesterday's trend deciding level is 6186 which happen to be today's high.
Being weekly pivot support, 6080 is very strong support even if

Nifty: BEARISH HARAMI CROSS

We may be at a market top or at the start of a correction. The market ran out of steam and the traders are now more in agreement about the bearishness. The evidence is strong enough to prompt the closing of long positions. The bearish pattern that was previously identified is finally confirmed and a SELL signal is generated.

The BEARISH HARAMI CROSS pattern finally received a confirmation because the values crossed the confirmation level which was at 6,194.50
 
This is a major bearish reversal pattern, which is even more significant than a regular Bearish Harami. The outline again looks like a pregnant woman, as with the Bearish Harami Pattern. However, now the baby is a Doji. Basically, the pattern is characterized by a white body followed by a Doji that is completely inside the range of the prior white body

Onelife Capital Advisors: BULLISH ENGULFING Close : 261.1500

The chart above shows how Onlife Capital Advisors took a negative turn after the SHORT signal which was issued on 12/2/2013. Since then, the stock price fell down by 8.25%. There are by now decisive hints casting doubts about the continuation of the downbeat mood. Candlestick system detected a BULLISH ENGULFING pattern, which may be a sign of a market sentiment switching from bearish to bullish. This pattern deserves utmost attention, because the SHORT positions must immediately be covered and long positions must be taken, in case of a confirmation. The BULLISH ENGULFING pattern, if confirmed, indicates an upside potential of 5.63%. It may turn out to be a good opportunity for bottom fishers, but patience first! Do not forget that confirmation is the prerequisite for any further move!