FnO Datasheet 03-09-2011

As I said, initially, next week is a shortened week. Remember further that we have had 4 continuous negative weeks. A moderately positive week is not an abnormal thing now, and may be the course of action to push out the week shorts.
This is what I said in my notes on 26th August. And we end a 3 day trading week with approximately 300 point rally. I have been wrong in expecting that a "moderately" positive week ahead.
My notes:

1. FII net bought 21K contracts. Their OI has increased by 48K contracts. Now, how to treat the OI addition? In general, we consider OI increase along with price increase as longs built into the system. However, the price increase is just 30 points - from 5003 close to 5034 close. Further, we are assuming that FII already have a lot of shorts in the system. So, we reserve the judgement of whether there are shorts or longs to a later day. 
2. PCR has increased from 1.03 to 1.15 indicating a bullish atmosphere. However, a close examination of OI increase at various strikes will reveal that 4400PE and 4700PE have both increased by 10L contracts each. Both the strikes being much below the current price, the huge OI addition is point of concern.
3. The NF OI has increased by 1.5L contracts - a low turnover. Probably new longs want a dip to enter and new shorts looking for higher levels to short.
4. Another important factor to be observed is the huge FII buying in equities of around 1150 crore. In my earlier notes, I have indicated that equity buying/selling is delayed cycle to the FnO cycle. First FII take long positions in FnO - Then they will start buying equities to induce a rally - and then they will start liquidating the FnO longs. So, in general a very high equity volumes generally indicates the end of current cycle and a run to the opposite is about to begin. For example, on 25th August, there has been 1440 crore equity sell off by FII. That was the end of short term bear cycle. The FII booked profits in FnO by inducing huge sell off with equity sell. Yesterday huge buying in equity is similar? Monday's action will reveal. 
5. So, what is coming in the next week? Well, we use our reference point 4850-4900 as the "bar-o-meter" ( Thanks Girish for the word. :) ) Buy all the dips above it - and Sell all the rises below it. There might be a couple of whipsaws, but the rewards will be equally good. 
6. You can find the complete datasheet here.

I have noted down your feedback. I will work on them to improve the notes and datasheet without losing my original theme and ideas. Thanks.

MCX OrderFlow

Rm's post a few minutes back, is an excellent example of how that chart is an entire trading system in itself as also an excellent weighing scale for risk-reward.

Swing traders have to look at that chart everyday, if you want to be on the right side of the trade. Since McClellan is in positive territory, you would note that most dips in the market are being bought.

Here are the OrderFlow charts of the MCX futures of today :

Copper :

Crude :

 Gold :

 Silver :

We now have the ability of delivering all these wonderful signals straight to your cell phone or twitter  account.

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Desi MO (McClellan's oscillator for NSE) at EOD 2nd Sep 2011

FnO Datasheet 30-08-2011

My notes:

1. Another day, where NF rallied by 1%. FII bought 21K contracts. Their net OI increased by7K contracts. Price rise along with OI increase means longs into the system. So, there might be further steam in this rally.
2. There has been a small reduction in NF OI - around 4L contracts. So, there is some short covering.
3. FII bought 600crore worth equities, and DII bought 100 crore. So who sold - mostly the retailers.
4. As pointed out in yesterday notes, the FII do hold a lot of shorts. This rally is counter trend. As I have pointed out, most of the shorts are created in the NF range 4880-4950. This zone will provide violent reactions. So, manage your longs with a SL around this zone.
5. My thinking is - if the shorts are already trapped at 4900 zone, we will never move closer to that point again in the series as that will provide a smooth exit to the trapped. So, for this rally to stay alive, we should not go into the zone again. Once in the zone it is prudent to stay short which offers better rewards.
6. There has been a lot of put writing between 4400-4800 strikes.Which has resulted in the PCR to drop from 1.1 to 1.03. But the striking strikes - 4300PE and 4900PE. Both of them saw an addition of 10L. 4900PE is understandable, The ultra bullish writers. But 4300PE? - well may be institutional hedging. I will not be concerned above my defining zone of 4880-4950. However, below the zone, this put buying needs to be considered quite seriously.
7. Add to the above observation is - FII bought a lot of options yesterday. Now, correlating the above buy  to 4300PE buying is a long stretched option. But, as I said, be cautious once we are below the zone.
8. You can find the entire data sheet here.