Game Started

Am wondering at myself for writing to this . Guess ? FIFA World Cup ..nopes Games are yet to start..have to wait for another 23 Days. So something made me to write this.right?.Yes, we do see Games Daily in our life and  Games are played between Two players who take decision or combination of decisions for a particular outcome ,but the fate of player is not only dependent on his decisions but also on other players,but most of them seem to be important to us .

But off late am finding few games to be interesting ,one such is the game played between Player A consisting of traders ,investors,speculators,bankers,officials of(on) EURO Region and Player B of the same pool of (on) Non-Euro region in Order
Player A thinks Player B is playing with there market and making its currency and market to go down ,yields on bonds up etc..And Player B thinks Player A is in Bad shape and it will default and pulls out all his money from there market.Since Player B is pulling out his money from there market ,Player A also starts pulling out his money from the market there by making the market to go down south in first few days of this month

Another Set is by Officials who think that players are taking away money afraid of countries going default in turn making with Euro hot , Here comes the Officials who in-turn want to cool the temperature by infusing 
1 Trillion Package,Central Bank buying the bonds, and giving cushion to euro by arranging swap with dollars.

Again the Player B feels conditions are improved,confidence is back then he  brings back the money into market expecting that Player A's Debt problem is solved  in-turn Player A also brings money into market cause player B has brought  money into market after the debt problem is solved for now

Here if both the players think they are Safe than they make the market to go up like anything and both can win,We have 3 possibilities
1) Both Winning
but once a player gets suspicion or not confident then we will have 2 other possibilities
1 ) One player might win other will loose
2) Both might loose if no one has confidence on each other

For now Officials brought peace into market ,but there are always people looking in  microscope to identify the defects .Once this confidence is gone..we might see another leg of turmoil in near future

Apart from this am playing another game whose pay off is not in favor of me right now ..hehe :)

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 :)

What is the next BlackSwan?

What a wonderful month so far for markets a swing of near 6% downside in a week and a 4% upside in a day ,Credit goes to European Officials single handedly making the markets to dance according to there tune and also we yet to know the reasons for 1000 point swing of Dow Jones..rumors in market are mistake by iIbank in selling e-mini S&P worth 15Billion USD, large Europe bank liquidated its positions. and high frequency trading ..any way leave it...we will get to know more on it in few days..

So What exactly happened during the past week and weekend ? what made europe for the changes in there policy towards bailing out countries all the while opposing towards that idea. I guess this weekend will be recorded in history for sure. European Bank offered a trillion dollars package to weak countries?  Will this solve the current problem? From where will they bring 1T $ ? Print Money.if so..haha..LOL..that will have ripple effect in coming days for sure ..if not ..Why didn't they do this much earlier? when bonds were yielding much lesser..Now when they are higher they are buying them..pretty bad i guess ..its like buying at high price and selling at low price...If thats not the case..then Markets are doomed to come down again...for now europe went up..but still there are problems around euro..i dont think in a weekend all there problems are solved ..May be am wrong..will see..

So what next for markets..inch higher for now until we see another blacksawn. If there arent any events like that then by default we have the great driver of our ENGINE ...yep its China..Many are suspicous of China coz they dont reveal much data to the rest of world and we have to speculate a lot on its conditions..
I personally feel China is the ultimate culprit for making Metal Prices ,Oil to go up in 2008 coz of Olympics it conducted  which lead to massive cornering of metals...to build the stadiums,roads,infrastructure..and it drove Oil prices like anything coz it piled up huge reserves of Oil to use as backup fuel  in case of occurrence  of  Earth Quake. Once the event is over we had a oversupply of commodities,Oil and it crashed. Now again if  oil or metals to go up we need such a kind of demand...

So even without any real  demand metals going up..means expect a fall in near future which is already happening in China..Thats why am bit worried of China Throwing a Bomb on us..Have to be carefull in knowing the next BlackSwan timing

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