California is next Greece ?

The cost of protecting the debt against default in the below  table shows few states US are facing a difficult times than the present Euro zone. May be its time for  Arnold Schwarzenegger to make Terminator 5 a Hit and use that money to pay of the debt in US states.

Wiki Definition:

A credit default swap (CDS) is a swap contract in which the protection buyer of the CDS makes a series of payments to the protection seller and, in exchange, receives a payoff if a credit instrument (typically a bond or loan) goes into default.

Example of CDS:

For example, if the CDS spread of Risky Corp is 50 basis points, or 0.5% (1 basis point = 0.01%), then an investor buying $10 million worth of protection from AAA-Bank must pay the bank $50,000 per year

Here is the latest Data from CMA Datavision which tracks
The CMA Sovereign Risk Monitor identifies and ranks the world’s most volatile sovereign debt issuers according to percentage changes in their 5 year CDS.

Monday, 28 June 2010 — 12:30

Highest Default Probabilities

Entity Name	Mid Spread	CPD (%)
Greece	1085.57	67.28
Venezuela	1276.00	57.73
Argentina	964.80	48.00
Pakistan	713.20	38.76
Ukraine	624.70	35.76
Iraq	479.70	29.19
Dubai/Emirate of	480.70	28.78
Illinois/State of	356.70	27.09
California/State of	345.50	26.90
Romania	399.36	25.04

CPD stands for Cumulative Probability of Default

CDS can be checked at this location: cmadatavision.com

Bulls ‘short’ on Sesa Goa as they see limited upside: Is it True?

 I was reading this news article on friday morning which came in www.economictimes.com 

http://economictimes.indiatimes.com/articleshow/5983459.cms 

since thursday is expiry day one can expect there will be some amount of volatilty in stocks..but what made me intresting to spend some time on this is i like sesa goa very much coz there is lot of volatility in this stock...when ever there is ba of news of economy going slow or demand from china is reduced this stock will tank and when good news comes in the form of economy growing ,more demand from china or any other news..this will rise rapidly. These economic times very reporting that

Shares of Sesa Goa rose sharply on Thursday on the back of short-covering, but traders used this pullback to build short positions on the stock, as they feel the upside is capped

See the options data on sesa Goa on Thursday one can clearly see that 320 put has huge open interest that clearly indicates the down side is limited and the article on Thursday says upside is limited Thursday it ended at 337 . Since there is huge built up on 320 put it means the support is at 320 and not the resistance 

 Now see this data on Friday 320 Put as has almost same OI and other out of the money PUT are also started to rise . Guess what happened on Friday ..Sesa Goa had highest amount of % increase in List A Stocks ..10% rise in a single session...link to check for sesa-goa price on friday

  now do u call this as Upside Limit ? Still unable to believe economic times reporting like that. I have a feeling that i might be a paid news from brokerages .

Volatility Ahead with High OI and Volumes

 While i was looking at Open Interest in options  on NIFTY was bit surprised by seeing the volume of futures increased in last few days ,average volume in April is around 5 Lakh contracts and now we are trading above that..will see how it goes till month..as Volatility index came of from lows..we might expect more volumes in coming days.

Date	Index Futures
	No. of contracts	Turnover (Rs. cr.)
03-May-10	349631	8451.55
04-May-10	570849	13736.02
05-May-10	714820	16977.22
06-May-10	784241	18544.8
07-May-10	880349	20520.97
10-May-10	745870	17846.47
11-May-10	651926	15681.6

Todays NIFTY Futures contract details, we had a Price rise with increase in Open Interest in market with good volumes when compared to average of last month,,

CONTRACTS	VAL_INLAKH	OPEN_INT	CHG_IN_OI
581001	1492615.74	27492350	713300

Looks like its enough to judge the direction still i will do some more research and will come up with another post some time later

Here is how we interpret Open Interest with Volumes and Price Rise

Price	Volume	Open Interest	Interpretation
Rising	Rising	Rising	Market is Strong
Rising	Falling	Falling	Market is Weakening
Falling	Rising	Rising	Market is Weak
Falling	Falling	Falling	Market is Strengthening

for me it looks markets are Strong for now..Lets compare them with Options Data

From the Graph we can that 5000 and 5100 put had a increase in OI..means Options Writers are writing the puts in expectation that market might go up.. that indicates for short term we are having support at those prices and also one can see that there is a  decrease in OI for 5300 Call ,mean option writers closed there positions in expectation of market going upwards..for now we have resistance at 5300


Even though global cues are weak we will where it heads in coming days..my bet is towards going up :) will see

Buying and Selling of FII vs DII

Here we can what exactly happened during this week with respect to purchase and selling of FII and DII.
I didnt capture the swing in index price,just placed closing price for the day for now..but its enough to make a few inferences about NIFTY.

Nifty was around 5250 at start of month then greece problems were taken seriously by markets around the world and started to slide we see that Domestic Institutional Investors were net buyers on  5th and 6th and 7th and FII were selling inturn pulling the market down and making good returns. Again on Mondy they were the net buyers and made the market to go up...it looks like FII's are buying at low price and selling at high price and DII's are buying at high price and selling at low price ..so we expect FII to sell around 5250 and DII;s buying at the levels...will see in coming days :)

Greece is BlackSwan for Markets

I was bearish on NIFTY for a long time cause of variety of reasons like high P/E Ratio, High Interest Rates in near future,China Factor,Greece Problem etc Most of the factors are negative to Nifty  and i am still wondering why all of sudden  my view on market got changed after the last expiry and overnight i went from highly bearish to moderately bullish side.

I Guess it was  a big mistake of changing my stance, though i was bit bearish and bought 5100 put and sold 4800 put and was kind of gamble cause am selling a put (Unlimited Risk). Then comes the Black Swan in form of Greece and made the market to drag down. And i was bit lucky to have 5100 put and made good return in it and squared of it expecting the market will not go down much.But am wrong the market is dragging down daily and my position of 4900 sell is making losses and i will be bankrupt if it breaches 4900 before that i have to make a decision.

Here are some snippets at which i made certain decisions which i like to share over here

At position A in the above pic was Expiry time in April Series and my view on market got  changed from highly bearish to bullish coz the chart appeared to go up and earnings results of companies were Good and Greece was not there in my mind, cause Greece problem is made tougher by speculators who are expecting it to go bankrupt( will talk about this in another post) .Can see from A position that SMA crossed each other which was ignored by me somehow...regretting for it..anyway that's what happens to retail investors..they will be wrong in identifying the patterns..ok.. leave that for now,,

In the Fourth Rectangle is Williams indicator and highlighted region is marked in Black box with letter C , This was the time at which i was highly bearish cause the indicator touched 80+ for many days..that indicates its highly overbought and anytime it can sell off...its not that easy to predict sell off at least for me and only from historical data we can see it ..It was in overbought state for one month and for whole month of march to mid april i was bearish ,during that time market went up and i was made wrong.

Coming to the last rectangle marked with D which is the current week where we have slide in our market and Williams R is  in region 0 that shows its in oversold region and now again  for how long it will be that zone before there is bounce off and market going up 

I expect the market to come down a bit till 4900-4800 and then expect to go up..only in-case if Greece problem is halted for some time. Will get  some status on Greece by Monday Morning and hope peace prevails in market

Playing with fire--by Grantham a must read

 It was a not a great weekend though i will remember it for years to come(its not related to IPL ok)..anyway that's not what i  intended to post here

While surfing i came across this guy by name Grantham Jeremy , chairman of
a Boston based AMC well known among institutional investors, but relatively unknown to retail investors.
He has a reputation over his long career by correctly identifying speculative market "bubbles" as they were happening and steering clients' assets clear of impending crashes

Most of his letters are read by Wall Street  and here is what he says in latest quarterly report in the link below
Playing with Fire

Take some time and read in particular if you invest in stocks

More can be found in this article
http://www.businessinsider.com/henry-blodget-grantham-this-crazy-market-could-go-roaring-right-back-to-its-old-highs-2010-4