Bulls euphoria : when does the party end ?

[Agilent]

I think the euphoria has been overdone ....

For medium term traders, it's time, in my view, to start think of slowly buying some puts and booking profits

AGILENT

P.S. I know sensex at 15K looks like an attractive and strong target for speculators to 'drive' the market up to ... but the story has to (at least) pause some time .. let's not even hint about reversing

Guys
Trust at least a few of the active members took heed of this comment of 5th Dec... the opening post on this thread ..

Curious to know

AGILENT

 

[jatayoo]

all i can comment on your much prophesied "the bull run has just begun" is "you are too late" imho sometime next year you are going to be hugely dissapointed

I do accept that next year i may be dissapointed.Gann's 7 year cycle also envisages it.What about the year after that??I am not in the market for a year or two.I am in it for last 11 years and look forward to the next 10 years.PATIENCE seldom goes unrewarded in the market,as long as you are in line with the fundamentals.If the fundamentals change then no one can help??

 

[Agilent]

Guys

Take care .. what we are seeing could be mere 'dead cat bounce' ... if indeed we are in an 'intermediate' correction

See one yr chart and note how many such bounces ocurred in June/july .... remember that traumatic phase ?

http://finance.yahoo.com/charts#chart4:symbol=^bsesn;range=1y;indicator=split+volume;charttype=ohlc;crosshair=on;logscale=off;source=undefined


Good luck

AGILENT

Those who cannot recall history are condemned to repeat it

 

[kkseal]

I do accept that next year i may be dissapointed.Gann's 7 year cycle also envisages it.What about the year after that??I am not in the market for a year or two.I am in it for last 11 years and look forward to the next 10 years.PATIENCE seldom goes unrewarded in the market,as long as you are in line with the fundamentals.If the fundamentals change then no one can help??

I see an inevitable slowdown (due to a higher base effect if not anything else) in 07 or 08 but 10 yrs from now it will probably be seen as only a bear phase (one of the few) in a great bull cycle.

Thankfully the mkt valuations are still reasonable with some upside potential; so a slowdown in earnings growth could be compensated somewhat by rising valuations.

Also if the slowdown starts in 07, we'll see another real big correction in May 07 (or a little earlier perhaps). I feel people who are holding stocks the last 3-4 yrs should reassess the situation & perhaps book profits once in March'07.

Regards,
Kalyan.

 

[kkseal]

Guys
Trust at least a few of the active members took heed of this comment of 5th Dec... the opening post on this thread ..

Curious to know

AGILENT

Dear Agilent,
The first time i entered this forum was when i noticed those -ve divergences on the charts late in Nov and as i didn't have a TA s/w of my own i wanted a confirmation of the same from people who had (and were more experienced than me). Upon entering the forum the first thread that caught my eye was the one named 'Market momentum faltering' started by you.
But honestly i was a little disappointed in seeing the paltry response to your warning message. I thought may be i was being too pessimistic or reading things wrong. But the nagging discomfort persisted and finally this fall happened.

I wouldn't call last two day's upmove as 'a dead cat bounce' simply because we hadn't reached the dead cat stage; in fact we didn't even go down to the first Fibonacci retracement level of around 12700. Also the buying since have been broadbased (the midcaps couldn't have moved up on short covering) with better than average cash volumes & reduced F&O volumes (& the AD Ratio has really started looking good - too good in fact!- after a long long time). So if we don't go down to a lower low in the next few days then it can well be assumed that the intermediate correction has been postponed to a later date (middle of Jan 07 perhaps). Alternatively we could go up till March 07 & then collapse.

Anyway, let us not let any fear paralyze us & go out & buy & earn while the going is good. (And if & when the mkts do go down will rake in the moolah through shorting. Let us prepare from now & learn all there is to learn about short selling. The people who are already in the know can start a thread on 'The Art Of Short Selling'!).

Regards,
Kalyan.

 

[amitt29]

Kalyan,
The dead cat bounce he is referring to as,is the rise from the really oversold levels,i mean really,i mean tell me who wud buy,except for the big funds or some ops after 1000 points fall(almost in 2 days,discarding friday).It was really oversold,on all time frames,5period,hrly,weekly u name it u got it,so a technical or whatever bounce back was expected,i wud still go on to say that it wud continue for some hrs tomorrow too.

Here i wud like to point out also,that in April, Sensex had a similar fall of 1000 odd points,recovered in 2-3 days(Infy remember),then collapsed again(some Ipo scam)then rose to euphoric highs.During that first fall i clearly remember a person,who was particularly bullish,i told him i wasnt happy with the market falling like that,he said it was a minor blip in the long term radar.I didnt have to say anything again,the market gave him a curve ball blip,and fundamentals or whatever things apart investors come at Sensex 4k not Sensex 14k,and if we were such a market(which is so emerging)we wudnt have had a fall of 1000 points just on 50bps hike.So do take care.Whether its a dead cat bounce or really good buying only time wud tell.(PS look at volumes)look at the gainers list(ONGC,RIL,HLL in late day,NTPC)all index heavyweights.Its a game of hit and run in a derivative driven market.
Warm regards.
Amit.

 

[kkseal]

Kalyan,
The dead cat bounce he is referring to as,is the rise from the really oversold levels,i mean really,i mean tell me who wud buy,except for the big funds or some ops after 1000 points fall(almost in 2 days,discarding friday).It was really oversold,on all time frames,5period,hrly,weekly u name it u got it,so a technical or whatever bounce back was expected,i wud still go on to say that it wud continue for some hrs tomorrow too.

Here i wud like to point out also,that in April, Sensex had a similar fall of 1000 odd points,recovered in 2-3 days(Infy remember),then collapsed again(some Ipo scam)then rose to euphoric highs.During that first fall i clearly remember a person,who was particularly bullish,i told him i wasnt happy with the market falling like that,he said it was a minor blip in the long term radar.I didnt have to say anything again,the market gave him a curve ball blip,and fundamentals or whatever things apart investors come at Sensex 4k not Sensex 14k,and if we were such a market(which is so emerging)we wudnt have had a fall of 1000 points just on 50bps hike.So do take care.Whether its a dead cat bounce or really good buying only time wud tell.(PS look at volumes)look at the gainers list(ONGC,RIL,HLL in late day,NTPC)all index heavyweights.Its a game of hit and run in a derivative driven market.
Warm regards.
Amit.

Thanks for the warning Amit. I'm not rushing in with all my money though Just put in a little bit today & will now wait for a higher low (a la Saint!).

All that you say is very valid. I am just a wee bit encouraged by the healthy cash volumes (viz a viz F&O which was ruling the roost so far!) and the vastly - almost dramatically - improved AD ratio.

Regards,
Kalyan.

P.S. : I am having a hard time containing my aunt though! She's all excited and wants to grab her favourite stocks before they move up again. Today she pointed out to me half a dozon stocks which she could have bought yesterday if i hadn't stopped her from doing so. 'Now look how they have moved up!' she reprimanded me.
Strange & illogical as it may seem aunties hunches often turn out to be right & I, with all my suppoosed TA etc. knowledge, end up looking the fool!
Let's hope auntie is right this time too!

 

[amitt29]

Hi,Kalyan

One more thing,just to point my point across,conclusion will be yours.Day b4 yesterday a person who i know(who operates mostly on khabars and hunches)told me that markets wud fall 500 more points on Wednesday(some analyst told him some Rajesh Agarwal from Calcutta who appears on tv too)to which i told him,that even if market falls or gaps down by 150 points,it will get into freezee.The markets didnt fall on Wednesday,but it is frequently violating my thresholds and for long periods of time.Thats disconcerting for me.Its very easy for market movers(who sold on friday afternoon prior to rbi hike news)to mantain an A/d ratio and also some value punters.When something looks too good to be true its not true.
And my friend its really scary time to be in stocks,when ur (or for that matter my aunt says its time to buy).
I can be wrong too.

Its very good interacting with you.
Warm Regards
Amit.

 

[RSI]

Hello everybody,
What about the volume picture? Eventhough many of the sensex based stocks have risen since last two days, they have risen on thin volumes. I am scared when I look at the volume. Is it the time to get out of the market, if already one is not out of the market?

 

[jatayoo]

Dear RSI
At present all the players are very very cautious,hence the low volumes.Fear at this stage is good.
Secondly, wny did the markets correct at all??
It was due to irrational fear spiked by CRR hike and manufacturing slowdown.In fact now it is being realised that these two measures cannot slowdown the fundamentally strong growth momentum.Both these news items came on the heels of last friday's correction.In fact in hindsight i feel that some "insiders" may have got information of RBI's move during the post lunch session of the markets and shoved on the breaks.
In the process they may have made a ton by teusday evening.WHAT A SETUP.