Desi MO (McClellan's oscillator for NSE) at EOD 30th Nov 2011

European Bond auction dates

Those trading equities and commodities will have to keep an eye on this calendar as the European bond auctions are creatings lots of volatility in the markets.

Desi MO (McClellan's oscillator for NSE) at EOD 29th Nov 2011

Global economic calendar

Desi MO (McClellan's oscillator for NSE) at EOD 28th NOV 2011

Trend for 28/11

The morning's open was an open Drive from the Point of control of the previous day, confirming a change of sentiment over the weekend.

The single prints at the base of the profile and the O print below the first alphabet D is always a confirmation that in 90% cases what begins at one end will finish at the other end! Profile told us very early that this would be a big day and the rest of the day we were content to buy all the dips and wait for the market to take us to profitability!

Our OrderFlow which operated entirely on the Market Profile Hand Book was quick to spot the longer time frame presence and printed us a buy at 9.15 am.

The BankNifty also spotted the changed sentiment of the morning and printed us a buy in the very first minute of trade

Markets are not about tops and bottoms, but about trading the points in between.There are enough of the "Doom and Gloom" kind of guys who get it right once in a while, but forget that the markets are a journey and not a destination!

OrderFlow helps us to live in the present. It is the single best indicator of market trend and will put you on the right side even when that trend is changing.The fastest way to lose money is to trade on the opposite side of the OrderFlow.

The charts above show you what is unfolding "now" and how to take advantage of it!

Nifty & Advancing Issues 5 & 10 MA

Desi MO (McClellan's oscillator for NSE) at EOD 25NOV 2011

The INR story

The charts above are 200 minute charts of the USD-INR, then the Nifty, BankNifty, Gold, Silver, Copper and finally Crude.All charts are for a period between 28/10/11 and today.

These are also all the instruments we track in the trading room and send alerts for.The purpose of the charts are to show the effect of a falling INR on stocks and commodities.

It's easy to see the effect of a falling INR on the Nifty and the bankNifty in the top 3 charts .INR has been the story of the past one month and we have made a special place for those charts in our trading room!

Ever since RBI intervened and seems to be selling dollars at the higher levels of 52.3 to 52.7, we seem to be having a floor on stocks and the greens at the end of the charts in Nifty and bank Nifty seem to suggest that.

Globally and even here, a rising dollar seem to be having the least effect on Crude ( last chart) and it is the best performing chart of the commodity space at the moment.

Gold also ignored most of the rise in the dollar and Silver had one large down day attributed to the margin hikes in China.

The INR is still at 52.2 levels currently the previous lows from 2008 and till this goes down to maybe 50 in the next one to two weeks, upsides in stocks will remain capped.

Nifty & Advancing Issues 5 & 10 MA

Desi MO (McClellan's oscillator for NSE) at EOD 24th NOV 2011

Today's trend

The expiry day today was very non-volatile and kind of an anticlimax to the fears expresses by participants that the expiry will be at the lows of the series.

The OrderFlow on which we heavily rely to note the trend of the market printed us a buy call at 4674 today, just past noon.

In the trading room we have been carefully observing the value area being built yesterday and today between 4650 and 4700. Many times it is important to note what the market does in it's time rather than clock time which we determine and impose on the market through our opens and closes. The rhythm of the market is best understood through buyer seller reactions and responses from prominent zones like the previous day's Point of control and the day's vwap.

Early this morning the POC pushed the market lower and kept resisting the market's attempts to go higher early afternoon. But once it was crossed there was no looking back. A quick calculation of the value area meant that a break would give double value or another 55 points. So we had an intra target of approx 55 above POC which was where the market finally settled for the series.

FnO Datasheet Nov Expiry

My notes:

1. I said in my last notes that there is a possibility that "the longs in the zone this week are like a deer in front of the headlights" and panic will strike expiry week. Hope you are on the right side of the trade.
2. There has been relent less selling in the market for last one week. In the series, FII have sold approximately 1.2L contracts. From 30 points premium NF has slid to 5 point discount at one point today. RM's MO at -95 and staying above -80 for 3 days consecutively demonstrates the extent of selling. 
3. Wednesday FII sold 1300 crore worth 54K contracts again. So, it appears the series would expire at its lows. It is important to note that at no point of time, the OI of any strike did not cross 80L. From my observation, it is difficult to count any strike as support till it crosses 80L OI. 
4. Starting 15th Nov, FII have net sold 4000 crore worth of equities. That indicates the gravity of the situation we are in. The INR at life time lows is not helping the matters either. It is interesting to observe that the equity selling increasing in its quantum from 195 crore to 1200 crore yesterday. It confirms my belief that equities are delayed FnO cycle now. Probably this cycle gets terminated with some spectacular display today/first day of new series :) It is important to note that DII have stepped up their equity buying in the last 3-4 days. Otherwise the damage could have been more severe. Now, whether DII are buying the equities as an opportunity or as a compulsion is what will determine the next course of action.
5. I said in my last notes that, referencing the OI table is not prudent - as none of the strikes have an OI that can withstand such movement. I continue to carry the same opinion. However, I would like to point to two significant observations that Girish shared in the trading room which proved to be decisive. Firstly, when the market was trading in the 5200s, for two consecutive days, huge buying happened in 5100PE Dec - approximately of 23L contracts. While bringing it to the room's notice, Girish said that - either the fall will come in December or it is done so as to escape immediate attention. How correct he has proved to be! The second important factor happened yesterday again. Yesterday there has been 12L addition in 4500PE Dec. Is it a case of the same story or a double bluff this time? Take your call - there is the key to next series. :)
6. I have added the sheet for December series as well - and am trying to monitor the OI increase and roll overs to December series. NF Dec series has built 1.88 crore OI so far - and out of which 1.1 crore has been built in the last 3 days. It is important to note that in 2 out of those 3 days, FII have been net buyers in index futures. Further, their OI has increased by 2.2L contracts in these 3 days. NF traded in the zone 4750-4850 in the first two days, and traded between 4680-4750 on the last day. So, this is the zone which will be important reference to the December series. There are two possibilities that one can see. The 2.2L contracts addition are shorts and 4500PE December has been bought by smart money - indicating much lower lows in December. Secondly, The 2.2L contracts addition are longs at the lows, and 4500PE December has been written by smart money - indicating a smart year end rally on the cards. Take your pick and right pick will be handsomely rewarded. :)
7. The FII SAR that we have been tracking has reached 4658 yesterday. Our experience suggests that, we should stay long above it and stay short below it. Keep following that number as it gives a very good clue to the institutions' view on the market.
8. All the columns in the data sheet have their value in understanding the complete picture. For example, take the net average figure of 22nd November. It shows 4163. It is far lower to the range in which Nf has traded in the day. When the Net Figure is very low, it indicates that there is a lot of profit booking/day trading that happened. If we observe the action on 22nd November, there was a minor rally in place. So, we had a rally and profit booking happening on the part of institutions. That will help you equip yourself for an impending fall coming the next day. One of the reasons, I carried those 4700PE. :) All I am suggesting is keep your eyes and ears open to the data in the sheet. Slowly, the data sheet will start speaking to you. Listen to it - It will equip you much better to handle the next trading day. 
9. You can find the entire data sheet here. 

Desi MO (McClellan's oscillator for NSE) at EOD 23rd NOV 2011

Desi MO (McClellan's oscillator for NSE) at EOD 22nd NOV 2011

Algo or Butter fingers?

Here are 2 trades we picked up this morning on the BankNifty

The market was trading at 8634, when we noted heavy volumes at 8542, about a 100 points below.

Next it seems they covered with same volumes at 8526.

The third trade was back at 8634

All 3 trades took one sec to finish and were done at 10: 50: 26 and 10:50:27.

Butter fingers again?

Nifty Advancing Issues 5 and 10 Day MA

Desi MO (McClellan's oscillator for NSE) at EOD 21st NOV 2011

Trend indicator

On Friday the markets had finished a Neutral Extreme, which in Market Profile means that you should have an open above the close of the previous day for trend continuation.

The open early this morning was far removed from that close and OrderFlow quickly determined that sellers were present in the market and active. Generally smart money at the open has a very good idea of where they expect the market to go and detecting their presence straight at the open was a big edge.

We were short at 9.17 am this morning.

2 minutes later the OrderFlow confirmed a sell signal in the Bank Nifty as well and the smaller Initial Balance of the morning was a clear give away that the Market would go to levels of 3 IB today.

 

Over the years I have seen a lot of traders believe in levels, indicators, systems giving importance to the message from these indicators more than the actual message from the market.

Thus somebody will stop new selling because their indicator is flashing an "oversold" status or will do a buy because some trend line somebody has drawn  in a chart comes to meet a particular price at current position. What one has to understand is that all indicators and their like derive their positions from the market and cannot be more supreme than the market's message. Simply put this message is the understanding of Buyer seller price behavior through their volumes.

When It comes to trading with the  OrderFlow I do not believe in levels, indicators, forecasts, analysis even of my own! Only Price pays, and that is the absolute truth of the market.

In OrderFlow we have an excellent trend indicator, which not just helps us to be on the right path, but shows us at any point of time who is more in control of the market.

Here is an updated sheet showing how it has picked up trends and generated profits over the past fortnight.

Our net gains in today's session total 81 points in Nifty, 173 points in BankNifty and 4.2 points in Copper per lot !!

Fno Datasheet Weekend Update

My Notes:

1. I have said in my last notes that we are going to touch 4900 or 5300 soon. I stated that 4900PE buying and DII equity selling are my reasons for thinking that we are closer to the top then. Hope the food is tasty. :)
2. We are into relent less selling and 500 points down on NF in the week. In the last 5 trading days, FII have net sold 1.2L contracts of NF worth 3K crore approximately. We have to add 2000 crore worth of equity selling to that - it shows that FII are withdrawing money big time from the Indian Markets.
3. The option table is undergoing a real transformation - with each day one CE level is targeted with huge volumes of writing and the strike is giving way to much lower strikes.
4. Talking about supports and resistance based on OI at this stage is not quite relevant because, with the kind of mayhem going on, no strike is safe. All this happening with VIX below 27, and with no strike having 80L+ OI is what is making this interesting. 
5. I have stated in my last notes that 2.2 crore contracts have been added to Nov series in the price zone 5100-5200. I said that there will be violent reaction any time the price hits the zone. Now, in the last one week, approximately 30L contracts only have been reduced. That is a very low 12%. It basically means that, most of the additions in the zone are still trapped in the system. Now, that leads to the following possibilities: Firstly, they are shorts and they are enjoying the fall. I give this possibility minimal chance because after the addition of OI, NF rallied for around 200 points - and not much reactions were visible during the rally. Secondly, they are long but completely hedged with some PE. I give this the maximum possibility. Thirdly, the longs are caught completely off-guard, and they still have not reacted. If they run for cover, we might be in for another 200 point fall. I give this also minimal chance - because, the fall so far has been 250 points from their zone, and at any scale, that is huge and the manic running should have started by now.
6. Out of 30L OI reduction in the last week, 2 interesting points stand out. Firstly, the entire 13L covering of Friday, have been rolled over to December. So, in effect only 17L contracts covered during this entire fall. Even more surprisingly, there has not been much OI addition on any of the fall days - so it is all pointing to long liquidation rather than short addition. 
7. Another important factor to be considered is, DII have been buying equities during the week. Add, the high equity selling yesterday by FII indicate that we are closer to the bottom. ( I go with premise that equity cycle is a delayed FnO cycle - and high activity in equities generally indicate culmination of that particular cycle.) RM's MO at -95 also suggests that we are closer to a bottom - time wise, if not price wise. :)
8. The FII SAR we are following is at 4850. I said in my last notes as well that, the significant lowering of SAR is a cause of concern as, it indicates profit booking from the institutions. From the highs 5256, it reached 4850 - 400 points down in a week's time. The only solace is, it did not fall down much yesterday, indicating a pause.
9. Where do we go from here? I distinctly see 2 possibilities. Firstly, there is smart money involved in the longs between 5100 and 5200. They are hedged so far - they are booking their hedges now, and they will get a  decent exit with a rally towards the zone. Secondly, the longs in the zone this week are like a deer in front of the headlights and they did not react at all. Panic will strike them next week, when they find no hope of retrace. In which case, what we saw is only a teaser and the real movie is in the expiry week. Take your call on one of these possibilities and it should reward handsomely, if you are on the right side. 
10. You can find the entire data sheet here.

Desi MO (McClellan's oscillator for NSE) at EOD 18th Nov 2011

Value and vwap for series

Here's value and vwap for the series.

Nifty :

BankNifty :

The new sellers are far removed from value.

We are a long way away from vwap as well.

The MO charts are also pointing that risk- reward does not favor new selling here.

But our OrderFlow charts are not Blue yet, which means that short covering or new buying is not there yet.

Time to be careful with your positions.

Desi MO (McClellan's oscillator for NSE) at EOD 17th Nov 2011

Desi MO (McClellan's oscillator for NSE) at EOD 16th Nov 2011

McClellan's Oscillator Calculator in Excel

Desi MO (McClellan's oscillator for NSE) at EOD 15th NOV 2011

OrderFlow of today and spreadsheet

This morning off the open we noted the huge volumes at 5139 NF and as the market started to rotate we realized that should that buyer be taken out the market would be ready to move down swiftly.

The market moved up and down around the vwap and once the level of 5139 broke, there was no looking back.

Our OrderFlow had a whipsaw resulting in a loss of 24 points as buyers and sellers jostled for supremacy around the  day's dpoc and the Volume weighted average price.

But once the issue was resolved with a new sell signal, signifying sellers taking control at 5137, we managed to pocket a cool 70 points reversing the previous losses.

The Bank Nifty has been completely under the control of sellers since 9340 yesterday.

Here is the updated spreadsheet detailing the OrderFlow gains from the 7th of November this month.

In 6 sessions of trading ( 5 on the NSE) we have





these gains to show for the OrderFlow Performance.

Desi MO (McClellan's oscillator for NSE) at EOD 14th NOV 2011

OrderFlow on Holidays

The November series has been a series full of holidays.With news coming out of Europe every day, it is never an easy time to trade when we have a holiday at the NSE and the global markets are moving.

This is especially true for swing traders who carry their positions overnight.The Global turmoil can means nervous nights watching the DOW as well as waiting for the closing of the DAX.

As we use Order Flow charts at Vtrender, it becomes easy to track what the larger market participant is doing and trade in his direction.

On 25th when the market closed for Diwali we had a long position based on OrderFlow. Yes Smart Money was long at that stage and longs from 5173 were booked at 5381 for a gain of 198 points.

Notice the sell signal at 5381 at the top of the trading range.

The next holiday was on the 10th of November and swing trade positions had to deal with a US market on Wednesday as well as Thursday before NSE opened on Friday-11th Nov.

We went short on 9th November -Wednesday at 5307 which we conveniently covered on Friday at 5203, again a gain of 96 points over a holiday.

Again on Friday before the close we went long , booked part at the open this morning and reversed at 5196 today clocking net gains of about 90 points for the day again.

When you start trading our OrderFlow system, the only enemy to your profitability is You.Don't book out completely till the OrderFlow reverses.You can substitute a Future with an ITM Option Call of the next month, but keep trading the direction.

Follow the turns of the OrderFlow to keep making consistent profits every time the Markets Open.

Profile charts for Mon- 14/11

These charts were posted on vtrender-2 over the weekend.

Nifty :

The above is the composite profile we were watching at the beginning of the week. When it was fully developed it moved towards the lower side indicating that sellers have more control on short term action than buyers.

Generally in cases of a break out or break down, there is a pull back to retest the broken region. We may thus witness a move to test for old business at the lower value value of the profile or even the Point of Control. Bear in mind though, that on the test of the lower side, the 80 % value area rule may kick in which may force weak shorts to cover. Such a move beyond the POC may take the market to even 5350 to complete the 80 % rule.

The Bigger possibility may be a strong rejection by the Big sellers near the 5180-5200 zone at the center of the profile.

The chart below is Friday's auction :

Two things stand out in this chart.

1) Friday's profile was Balanced. It means that sellers and buyers showed equal strength. One possibility remains that some sellers may have covered a part of their shorts in Friday's action.

2) The profile above the balanced zone shows anomalies at 5253 and 5277. Anomalies are structural defects and often the markets repairs them by paying a revisit at that zone.Also the Market left a small gap between 5216 and 5226 and as we all know most small gaps tend to be covered subsequently.

FnO Datasheet Weekend Update

My notes:

1. In my last notes, I have stated that November series has added 2.2 crore OI which is approximately 80% of total OI between the price range 5100-5200. I said longs are safe above the zone. I further said that the reaction when  price reaches the zone will determine the outcome of the series. Friday, we made an entry into the zone and promptly 8.6L contracts OI reduction happened. Now, is it the smart money or the weak money which covered the longs is what is interesting. 
2. FII have net sold 52K contracts yesterday and their OI has increased by 15K contracts. We already know that they are long in the series, so, it is safe to assume that they have covered 37K long contracts. 
3. From October 19th, when we started tracking this series, in 15 days of trading, DII have sold equities on 11 days. Not a comforting statistic, if you are a bull. Even on the 4 days, when they did not sell, the buy amount is very minimal. So, one thing is obvious - the DII do not think that, the equities are in for any major bounce soon. 
4. I said in my last notes that, even the institutions are playing it on a series by series outlook, and FII buying in equities is an example of that. The high premium on NF is another illustration that, the game is being played in FnO segment only.
5. In the option table, some very interesting things happened. The 5200PE and 5300PE covering and call writing at 5200CE are the first things that come to attention. The second aspect that caught my attention was the put covering at 4900PE and 5000PE. We are trading a decent 200 points above - why some one was in a hurry to cover 4900PE - weak longs or smart longs? Make your conviction and trade it. :)
6. To continue with the option table, there has been Call covering at 5600CE - probably profit booking. But, the absolute reluctance of people to write calls at 5300 is another interesting aspect. If 5200CE has added 15L contracts, 5300CE at a decent 43points by close should be inviting significant writers' money. But, absolutely no addition there. My take, we are going to touch 4900 or 5300 soon - depending on which side the smart money is. :)
7. The PCR is in the neutral zone of 0.95. In November series, so far, there is total OI of 3.35 crore on the Call side and 4.25 crore on the Put side. So, the activity is more on the Put side, indicating option writers are bullishly confident. However, on Friday, 18.7L of Calls are written and 2.9L of Puts covered. It indicates that Put writers are not really scared as yet for any steep fall. Further, out of 18.7L calls, 15.3L calls are written at single strike 5200CE. So, Call writers are also still not confident of any steep fall. My first guess - a range bound movement for the next few days before we make a directional movement. We will continue to monitor this activity and study its implications as we move along.
8. The FII SAR that we have been tracking stands at 5118 on Friday. The SAR presents an interesting observation. If you observe in the last two days, the SAR fell significantly lower. It was at 5255 on Tuesday and fell by 140 points in 2 days to reach 5118. I would like to bring to your notice that in those 2 days, we have traded significantly higher than the average suggests - in fact in high 5200s and 5300s in the span. The average SAR price reduction means that - there is no fresh buying done by FII in the last 2 days - and further they have booked profits in significant lots in these 2 days on the long side - as the average came down considerably. ( Your average price comes down - when you book profit.)  My guess is - due to this activity - the upside is limited - and we may be in for some range bound movement with slight negative bias. 
9. Where do we go from here? I have an interesting stat for you - the average option buy price and average option sell price. The average option buy price 5164 is less than the average sell price 5180. And in fact both the average prices are less than the lower end of the traded zone. It basically means that most of the activity happened at lower strikes than the Nifty traded zone. To illustrate - if there is more activity at 5300 strike, the average price will move higher - due to that activity. So, most of the activity happened in the lower strike prices. A quick glance in the option table shows that, there can be two places where options can be bought. I find that 5200CE or 4900PE suit our requirement. My guess - FII bought one of those two. We will know soon what it is :)
10. Though I may not be able to present complete verbal notes regularly,I will be updating the datasheet on a daily basis. I believe that by this time most of you are quite familiar with my thinking process - and can make out what I write based on the data. :). Please keep offering your feedback - it is quite valuable to me.
11. You can find the entire datasheet here .

Desi MO (McClellan's oscillator for NSE) at EOD 11th NOV 2011

Charts

Bank Nifty :

Copper :

Here are two Big winners from our OrderFlow system in the past 2 sessions.

The BankNifty generated for us 400 points in a truncated week and  Copper gave us 20 points this week.

Add to that the gains from Gold were 850 points, and from the Nifty were 66 points.

The actual performances and the lot sizes are updated in the spreadsheet at this link.

Just a look at the above figures, compared to our subscription cost of INR 3999/- per month, would tell you why our service and the OrderFlow system of trading remains your best bet to consistent profits.

Our system works across markets and instruments.

Tomorrow is the last day for the quarterly promotion. You can get an extra month with Vtrender Live at the cost of a normal quarterly subscription of INR 9999/-.

Please click here for Subscription details.

Intra day Volume charts

Today's volume at 5196 has been the biggest of the series so far.

The auction is in another untraded zone for the past two months between 5180 to 5240.

Notice the huge volumes at 5280-5300 on Wed.They will be a big resistance for the entire series.

As the auction plays out intra day between 5166 and 5196 now, the two highest volume nodes, any move below 5166 is confirmation of seller domination.

EDIT : Chart posted of BN .

Desi MO (McClellan's oscillator for NSE) at EOD 09th NOV 2011

Spreadsheet Update

This spreadsheet reflects the close of trading 12/11/11 on NSE and MCX

D forming

If trading has been dull for you or you stops have been mowed down in a sideways market, blame it on the Nifty D.

The Nifty D is the distribution pattern or the balancing nature of the market as it moves from Imbalance to balance.

Here is the chart which was posted yesterday :

And this is the updated one as of today :

Clearly the profile is balancing and acquiring a D shape as we look to leave this formerly poor traded zone.

There have been sellers selling near the highs and covering for a few points below and buyers buying the dip but not holding on for higher levels.

Meantime the 5300 CE/ PE are accumulating volumes and Open Interest as well as the 5200 PE and the 5400 CE.

That's the actual strategy for this market- a theta burn on a delta neutral platform.

Order Flow Spreadsheet

Spreadsheet Update :

OrderFlow Update

If you had tracked the composite profile picture in the morning, you would have noted that the market has some more time to do at the levels shown in green in the picture.

That profile chart is not complete yet and the market may auction back and forth till we get a wonderful D.

Here is the volume chart of the action today.

The three highest volumes are at 5290/ 5320/ 5330 in blue straight lines.

Also the biggest performer of the last few days, shows what it means to follow the OrderFlow system thoroughly.

When you are looking ta that chart, bear in mind that every point traded gives you a return of 100 bucks.

There's about a 170 points of profilts on that chart.

Yesterday we had only MCX open and we got 2 buy alerts on the system and today in NSE hours we got 2 more and another copper alert also. All of them have hit the targets as per our unique Prime Pivot system and we are riding the balance free.

Here is a spreadsheet we are tracking for performance :