The NIFTY- Down Move and The Banknifty- Up Move

Nifty-spot

Banknifty-Spot

Today, i gave a pre-market view to all my clients at 8.30am...In that , i have mentioned today market will open in gap down and trade in range bound within 5370-5430 (future) and the market does exactly the same.The nifty low was 5370 and high was 5422.The banknifty were pulled up by banks mainly it was lead by SBI,Bank of Baroda,Hdfc etc.We all are longing to see the banknifty coming down..every day i recive so many query's about the bank nifty and most of the people are asking me will the banknifty come down? My answer to all of them are just be cool it will.The yesterday post i wrote the index hedging nifty vs banknifty and today too we have observed the same. The nifty was in sell mode and failed in its upmove...all it can stretch out to 5415 from 380 levels and went down to 370 level by broke down the earlier day low.Where as the banknifty was shown great strength and rose upto 10194.00 level.But during the closing it came down to 10112 level and close weak.

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The consistent move up is caused the huge FII's buy > FII inflow in July 2010 totaled Rs 12,179 crore.The state bank of india is going up day by day and it reached to 2520 + levels.Now what will happen in monday? The monday market may open in gap down as per todays closing.we also need to consider the global cue's tonight.Now the nifty has a major support@5355 level and breaking down will lead market to 5210 level.The banknifty technically fulfiled all its up move and shown its strength enough now it has to move down to 10000 level for a positional sell.

BANKNIFTY Vs NIFTY

The Nifty start showing weakness from the last week onwards and this week its gone down to 5400 level with the -ive Divergence.it is still on.Where us the banknifty seems to be strong enough to sustain above 10000 level and not willing to give up its status quo.

Few weeks back i have posted an article....' Traders sell baknifty and buy nifty ' ...These two index usually follows one another but from the july month onwards they are conflicting with one another.Even today the nifty is going down and was in selling mode , where as the banknifty was going up and was in buy mode.The Banknifty july future gone to new high 10198 level. The Aug month future went up to 10170 level. The composites of banknifty like Hdfc,Axis Bank,Icici Bank,SBI etc are also in the nifty composites and these stocks shown some weakness and still the banknifty future went up...

What could be the cause for this rise?

The huge short roll over from july to augest month is one of the reasons and the other strange reasons must be the nifty future and banknifty future seems to be hedged with one another...The new hedging of index to index?? what a Strange idea it is!!. Thats why when one is moving up,the other is falling..

The market is some what compressed from its both sides by the bulls and bears.it is unable to move up or down and like a snail moving side ways and some un-expected reversal was seen when it was about to fall down from its citical support levels..it was seen last week and even today it rised sharply from 10025 to 10150 levels.

Now the Banknifty will be showing the rising wedge in its bearishness..it will be weak only down to 10020 level and the tomorrow or coming days the closing will be down to this level will bring down banknifty upto 9640 levels.The nifty has to support this by going down to 5360 levels.

SEBI chief calls MF industry's bluff as members pour out grievances

You neglect investors, put your short-term interest first, he tells the industry.
A forum by an industry body on mutual funds on Wednesday, where fund
houses intended to pour out their woes to the Securities and Exchange
Board of India or Sebi, hardly had any effect on the market regulator. On
the contrary, Sebi chairman C B Bhave launched a scathing attack on the
practices of the mutual fund industry.

Mr Bhave was critical of the way fund houses do business and reiterated the need for
them to focus on investors to grow.

“If you (mutual funds) are producing better returns than what an average investor
investing himself in the stock market gets, then why is it that you are unable to
convince investors that you are giving them better returns,” said Mr Bhave, at a mutual
fund summit organised by the Confederation of Indian Industry (CII). “I mean, are
investors so dumb as not to understand that they are getting better returns here
(mutual funds) and yet would invest somewhere they would get lesser returns,” he
said.
Sales of equity schemes of mutual funds have been hit, after Sebi banned mutual
funds from charging investors to pay fees to distributors.
Mr.Bhave said that mutual funds needed to look at how investors benefit from
investing in their products, rather than create an incentive structure that suits them.
“Somehow the focus goes to short-term incentives and that ultimately results in a
great loss for investors. And finally, when investors lose money, the whole industry
also comes tumbling down. I think, this lesson needs to be internalised by all of us,” he
said.
The Sebi chief said that mutual funds have to streamline their 3,000-odd product
offerings to make it more investor-friendly.
“Even if you put before me 3,000 investment products, I won’t know how to choose
from those products. I’ll have no idea of which scheme is good for me,” Mr Bhave said.
“If you really want to reach to the so-called small investors in whose name you do
everything, does he need 3,000 options? Is there really so much of innovation that is
going on? Are these schemes really so different from each other or were there
incentives operating in the market that made us generate these 3,000 options?” he
said.
In an earlier speech during the conference, UTI AMC chief UK Sinha remarked that
about 60% of the schemes are sub-optimal and the investments in them will not be
able to help mutual funds justify their claims that they are giving investors the benefits
of aggregation of savings.
Mr Bhave slammed the mutual fund industry for relying more on short-term money to
boost their assets under management. “You are becoming a shock absorber because
you are taking short-term money ... now who asked you to take short-term money ...
because you see that the neighbour (rival fund house) is taking short-term money and
his AUM has gone up, so I need to compete,” he said.

Banknifty poised for a reversal?

I wrote yesterday about the 'De-coupled Market' and mentioned no market can stand(with stand) alone for a long run.Every market has to Re-couple itself with the world cue's and it has to cycle along with the ongoing trend of the world.Today the banknifty shown a great weakness after a long time...it jumped like a tiger from one high to another...so many gap up's and reached to the crown.The many TA's foreseen it will touch 10500 level.Where as we were holding our shorts and today we have sold more than 4 times and bought and roughly made 100 points + after ten days.Since last ten days the banknifty was traded in a narrow range from 70 points to 100 points.Today it was different and seen some volatality.

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The banknifty move down to 200 MA & 400 EMA and locked down to it during the market closing.As per our tech view's the banknifty now poised to a reversal.If the market open tomorrow gap down,down to 9880 a big fall is on card that will go deep down to 9640 levels.If tomorrow the market open above 9940+ another choppy day one can witness.

De-coupled Market?

Dow Jones Industrial Average (^DJI) -5days chart

Dow Jones Composite Average (^DJA) -5days chart

Our Market Seems to be De-coupled from the rest of the world market as per today market performance.

The Dowjones(Both-DJI+DJA) seen a correction on 10th,and it remain weak may continue the weakness further.The 5 days chart above shown is clear.

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Today our market opened in gap down and rose to the high.The Banknifty future attained a new high today 10078.,where as nifty failed to cross or finding it difficult to cross 5420 levels. when i see the nifty Advances -19, Declines-31 this shows nifty poised to a reversal mode.but the banknifty Advances -7,Decline -5 (out of 12) this shows the banknifty remain firm.This really conflicts when nifty fall the other index follow the same!! The world cue's are in -ive ours is moving up!!

Stocks drop on weak consumer sentiment, bank earns

Many of our friends are in positional shorts in banknifty, including our clients.The banknifty was opened in gap ups for many days and raised consistently.Infact the highest gap's seen in this month.Now i have found this below article that may build confidence in the Banknifty 'short positional' - traders.

Article Source:-

http://finance.yahoo.com/news/Stocks-drop-on-weak-consumer-apf-2246766052.html?x=0

NEW YORK (AP) -- Investors are finding disappointment everywhere and taking out their frustration on stocks.

Stocks slumped Friday after banks' second-quarter earnings fell short of expectations and a new survey found that consumers are becoming more pessimistic. The Dow Jones industrial average lost 261 points, and all the major market indexes dropped more than 2.5 percent. Interest rates fell in the Treasury market as investors once again sought the safety of government securities.

The market fell at the opening after Citigroup Inc. and Bank of America Corp. released earnings. The two banks, like JPMorgan Chase & Co. a day earlier, reported higher earnings as losses from failed loans fell. But they are also seeing lower trading revenue because of the stock market's plunge this spring. The drop in revenue raised questions about how banks will be able to make big profits if trading is curtailed by new federal regulations.

Stocks fell further after a twice-monthly survey from the University of Michigan and Reuters found that consumers' gloom is increasing. An index of consumer sentiment compiled from the survey fell to 66.5 in early July from 76. That was a bigger drop than expected.

"It's mostly about the poor consumer confidence numbers," said Anthony Conroy, managing director and head trader for BNY ConvergEx Group. "The possibility of a double dip also starts to come to mind" for investors, he said, referring to a phrase that describes the economy falling back into recession.

The unexpectedly low reading on consumer confidence "spooks people and reinforces fears that the economy is slowing too much too fast," said Scott Marcouiller, chief technical market strategist at Wells Fargo Advisors. He noted that stocks had just enjoyed a seven-day winning streak, which makes them vulnerable to a big drop. And light volume, typical for a summer Friday, exacerbated the losses.

The market's retreat following a big gain fit with its pattern since late April, when the major indexes hit 2010 highs and then tumbled amid a variety of economic worries. But it wasn't just the economic data that set investors off Friday.

"You get a few bad earnings numbers and it's a lot of excuses to take profits if you got them," Marcouiller said.

Citigroup's shares were off 6.3 percent while Bank of America was off 9.2 percent. General Electric Co. fell 4.6 percent beating despite delivering stronger earnings and a healthy outlook. The company also reported a drop in revenue.

Stocks had struggled to a mixed finish Thursday after being down for much of the day on disappointing regional manufacturing reports for the Northeast. Much of the deficit was erased late in the day as news began to circulate that Goldman Sachs Group Inc. had settled civil fraud charges with the government over its dealings with subprime mortgage securities.

However, while investors were relieved that Goldman was putting the case behind it, they were again confronted Friday by larger ongoing worries: the economy and the future of the banking industry now that Congress has approved the banking industry overhaul bill.

The Dow fell 261.41, or 2.5 percent, to 10,097.90. The Standard & Poor's 500 index fell 31.60, or 2.9 percent, to 1,064.88. The Nasdaq composite index fell 70.03, or 3.1 percent, to 2,179.05.

For the week, the Dow is down 1 percent, the S&P 500 is down 1.2 percent, and the Nasdaq is down 0.8 percent.

About four stocks fell for every one that rose on the New York Stock Exchange, where volume came to 1.5 billion shares.

Bond prices rose in what's known as a flight to safety. That sent their yields lower. The yield on the benchmark 10-year Treasury note, which helps set interest rates on mortgages and other kinds of loans, fell to 2.93 percent from 3.00 percent late Thursday.

The formal announcement of Goldman's $550 million settlement came after the stock market closed on Thursday. Goldman was the only major financial company to show a gain Friday. It was up 95 cents, or 0.7 percent, at $146.17.

Bank of America's stock fell $1.41, or 9.2 percent, to $13.98. Citigroup was off 26 cents, or 6.3 percent, at $3.90. Both companies beat analysts' expectations. However, the drop in their revenue as a result of the stock market's slide had investors worried about how banks would make money in the future under new government regulations.

Google Inc. fell $34.41, or 7 percent, to $459.61 after its earnings fell short of analysts' expectations.

GE lost 70 cents or 4.6 percent to $14.55.

The Dow ended its seven-day winning streak on Thursday. It was down as much as 126 points early in the day, but closed down just 7 as word spread about the Goldman Sachs settlement.

A government report on consumer prices for June was mainly in line with analysts' expectations. The Consumer Price Index dipped 0.1 percent last month, largely due to lower energy bills.

The euro climbed above $1.29 as it recovers following a steep plunge earlier this year amid fears that government debt in many European nations would send the continent back into recession.

Overseas, Britain's FTSE 100 fell 0.9 percent, Germany's DAX index fell 1.8 percent, and France's CAC-40 fell 2.1 percent. Japan's Nikkei stock average tumbled 2.9 percent.

Business Writers Dave Carpenter in Chicago and Joel Schectman in New York contributed to this report

Traders short Bank Nifty futures ahead of policy

Hi...I got this news just now from Online_"Economic Times"

Source:-http://economictimes.indiatimes.com/markets/analysis/Traders-short-Bank-Nifty-futures-ahead-of-policy/articleshow/5442306.cms

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MUMBAI: Savvy stock traders have readied their bets on the bank sector ahead of the Reserve Bank of India (RBI)’s monetary and credit policy review With bank shares predicted to lag Nifty’s performance in the run-up to the policy and even after the event on expectations that the central bank will tighten the monetary policy, traders have created a strategy involving futures contracts of Bank Nifty and S&P Nifty to back this view.

These traders — mostly wealthy ones and desks of institutions — have short-sold Bank Nifty futures and bought Nifty futures simultaneously in the past couple of weeks based on mathematical models.

“The strategy is on the assumption that Bank Nifty will relatively underperform the Nifty with RBI most likely to tighten rates,” said Siddarth Bhamre, fund manager, derivatives, Angel Broking.

The central bank is expected to hike the cash reserve ratio (CRR) — the minimum amount which banks need to deposit with RBI in cash — by 50 basis points later this month. The possibility of a hike in CRR has heightened after the robust industrial production figures for November showed that the worst may be over for the economy and the easy availability of cash will stoke inflation. Investors have taken note of the rate hike in China recently, as RBI’s actions, in the past couple of years, have been in line with that of China.

Market participants fear banks will be affected by a hike in CRR, as they (banks) will be forced to hike lending rates to protect margins. With lending yet to catch up with the growth rate of deposits in the banking system, it is feared that higher interest rates will hinder demand for loans. Also, rate hikes will erode the government bond portfolio of banks, as bond prices may fall on rate hikes. Yields on bonds and prices move in opposite direction.

While the outlook on bank stocks is cautious, as their business is directly linked to interest rate movements, market participants are less nervous about the negative impact of rate hikes on benchmark indices as the broader market has largely discounted the event.

A senior official at an institutional brokerage said, “The short Bank Nifty-long Nifty trading strategy is based on the expectation that Nifty will perform better than Bank Nifty in bullish times and will fall less faster than Nifty if the mood is bearish over the next few weeks.”

Since the start of the rally early March to date, S&P Nifty has risen 100% and Bank Nifty has gained close to 160%. But, since December 1, 2009, Nifty has gained 4%, while Bank Nifty has shed about 2%.

“Indian banks have underperformed the market over the past month; however, we remain cautious near term given uncertainties on growth, interest rates and profitability,” said Citigroup analysts in a recent report.

In the ongoing October-December quarter earnings season, the Citi expects Indian banks profit growth to decline sharply to 5% from the same period last year due to the statistical impact of a higher base in the previous year. Out of the past 10 quarters, the profit growth of banks has been over 30% in eight quarters, it said.

"Implode to Explode"

A leasson we can learn form today banknifty price actions.The Term is called 'Implode to Explode".

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If, you would have observed the price movement between 9928 to 9952 the price was in swing from ups and downs.The banknifty is locked itself yesterday during closing down to the 400 EMA.Now, it is aiming to break/cross over this hurdle for which it tried its level best to gather strength - and came down and went up .still, unable to go beyond this roof(Resistance).

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The fall is called implode & the breakout is called explode. If, i translate this, into a simple term> "The Bow & Arrow principle" (or)

if you have seen the Cat or Tiger(before it jump to catch somthing) - it squezzes and move backwards its whole body and legs (back legs) and have a firm foot on the ground and take a jump up forward.This is also can be called 'Implode to Explode'.....to face this now we are ready for any direction.

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As we are ready and in short mode(placed SL- Double buy) the market Imploded to 9875 and covered our shorts.The banknifty failed to explode.

'Carlos Slim Helu' is the 'Richest Man' in the world

The annual Forbes billionaire list says Mexico's Carlos Slim Helu is the richest man in the world, finally edging out Microsoft founder Bill Gates and signaling the rising wealth in developing nations.

The richest person in the world is Carlos Slim Helu,
but who Carlos Slim Helu? The Richest Man In The World reportedly makes $30 million a month. Carlos Slim Helu, who tops The Forbes billionaire list, is the Lifetime Honorary Chairman of Telefonos de Mexico.

Mr. Helu, whom the Christian Science Monitor weirdly described as "the portly cigar-smoker", is the first man from a developing country to become Richest Man In The World. That's another way of saying Carlos Slim Helu is the first person of color to top the Forbes billionaire list.

How Carlos Slim Helu got there is by purchasing a controlling interest in Telmex in 1990, along with a group of investors, and used that to leverage the buying of as many telecom companies in Mexico and Latin America as possible. Now, his family owns 90 percent of Mexico's telephone lines and 80 percent of its cellphone. He's used that to finance his business operations around the World.

Carlos Slim Helu owns almost 7 percent of The New York Times and in 2009 gave the Times Company a $250 million loan. He's reportedly happy with his stake in the company and has no plans to increase it.

Market Trap Every One.

The 'Market Beats Every One'.

(Rule no.#3)

It is one among of the three Basic assumptions of technical analysis.

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Today we were in short in Banknifty with the hope market will slide down to 9220 range considering the global weakness's. It was low during the opening, the shown low of banknifty today was 9384.00.The market was rose to 9440 level and about more than a hour it stood still, we kept our 'double stop loss buy' to reverse our positions with the trend of the market and finally we suceded in our attempt once bought near 460+level we immdiately placed sell order at 9566 and the market zoomed like anything .We off-loaded 50% longs near 9566 and changed the balance 50%(long) sell order at 9582.00 and it was hit during the market closing....Surprisingly, that happen to be the 'day's high'.

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All our clients were really exited by our prediction.The morning we were beaten by the market.The market is above all and beat everyone..We still managed very tactfully by adapting our technical.

We are strictly fallowing our technicals and that gave a great gain more than 100 points in one stroke today.We have learned enough how to get out of the hold of market trap in any critical situations and learned how to turn or use the market for our favours.

Yet, One another day we have proved 'Tehnical Analysis that works'.No rumours can beat when one fallow and allign themself along with the market pulse.