Building houses and breaking them down :)

Keep in mind 3220-2920-2600 possible
4th side of a very big house is being built (wave IV in elliot terminology)
the top is not in place
once the top is in place the market will correct the true bear market correction :)
How do bear market corrections work?
You remove the top do some demolition and trying to build a new floor on top of the existing ground floor + 4 walls that you already built.

Anyway what do i expect? 2004 like correction in price/time , not a bear market. just a mini correction within a much larger bull market.
lets say fib ratios connected to the 2004 correction in price/time


so maybe a bottom by may/june and around 2920 in price

The endless cycle of the markets
the eternal roller coaster
Some people get high on the rush.
Some people manage to make a living out of the fluctuations?
Which one are you? which one am i? :)
I don't make much, still gotta work on the discipline part.
I Had a discussion with a friend on friday who chided me for saying short 3900 call for 70 to hedge longs. that call is likely to expire worthless now.
or buy 3800 put for 115, target 230 : retest of 3570. the put is now almost near the target price of 230.

His rationale was trend is up! follow the trend
the trend is your friend.
Now as brilliant as my friend was
he missed the bigger picture
the trend is present in multiple timeframes.

First come up with any trend following system
Lets say we like 13 ema
the direction of the 13 ema is our trend
its an ultra simple system
No i am not saying 13 below 26 or 13 above 26, ema crossover
that is unecessary complexity + lag

the direction of the 13 ema itself!!
you could also use any other ema/sma or length as per the cycles in your stock.

Now what does nifty trend look like??
what did it look like at 3820?
weekly 13 ema was falling!!! 3886! and that was the bear lane which i mentioned earlier
my bullish friend must have been aware of 13 hour ema rising and 13 day ema rising that he probably felt from the previous few days action. He probably also knew 13 month ema rising (he might be calling it 200 sma near 3556 etc, the two look similar)
And as brilliant as I am , I didn't buy that april put either!!!
In fact i saw it too the rising trend+all mechanical systems long even though my instincts said it was time to short!! However when we did close
I noticed one of my brilliant systems was short :).
But by then it was a bit late.

3826 was like 3900
nested 0.5 retracement
first 4240-3556 - 50% = 3900
then 3900-37xx - 50% = 3826
Did i act?
nope i waited for my mechanical system to short :)
Today market gapped down to first support target 3700
Shorting nifty at discount is just not my cup of tea
instead i shorted prajind and centurytext and jpassociate. jpassociate managed to gap up by a ridiculous amount and took my stop out , so net net didn't make much.


Anyway the roller coaster will always be here: no tension.
Ever been on a roller coaster?
Some people try to resist the drops! they tighten up their stomach muscles
and take unecessary tension!
When you let go of trying to be in control then that knot in your stomach will disappear.
Thats when you can truly enjoy the roller coaster.
Same with the markets, let go of any preconcieved notions. Use any trend following system which tells you which way the roller coaster is going and follow the trend.
Keep in mind that the falls are usually sharper than the rallies.
The falls are gut wrenching affairs, which can be exhilirating if you are short!!! If you are long they will be quite painful!
Just keep in mind which trend you are following and when/where it changes.
Enjoy the ride !!

Have already posted one solid nifty trend following system
which works in 2 timeframes
7/105 on 10 minute / hourly
would probably also work great on daily charts!! but keep in mind alignment/optimization issues.


Tomorrow I guess we will look to short again
remember we're looking for 3570 nifty spot.
once 200 sma(which now reads 3625 or so on my nifty chart) and 355x/357x(old lows) are broken on closing basis the we have a high probability of C wave down.
The C wave should do the lower targets which everyone has been talking about for quite a while now.

for now 355x-3900 range remains but it could break very very quickly and very dramtically