People Who Trade In Stock Market Pls Do Read It Carefully , It Might Beneficial
The Actual Game To Be Played In The Stock Markets To Rule Out
Investors / Speculators /Hni's/ Traders
Nobody expects anything positive. But how negative it could be, is the surprise
factor left for the markets to price in there tonight.
We stay negative about the impact of that news on stock prices.
>To say a broker does 1500 crores of turnover a day may sound superimpressive
to an outsider.
But the brokerage industry wants to know how much net profit that broker
makes on whatever the quantum of turnover be: A net of 15 paisa or 10 paisa?
That is the key to the bottomline of the broker. Not the turnover thing.
Just like that, outsiders may be impressed by that fantastic number of $800
billion worth of bond reinsurance that Warren Buffet said he'd take over from the
top bond insurers. The truth is, Buffet will make $4.50 billion !
That is not bad at all. 4.5 billion is a neat little thing to take home for assuming
someone else's risk.
Wall Street knows that the 800 billion dollar thing can be put aside and not be
overawed by it.
Which is why they clapped only with one hand.
Expect our markets to trade upwards at the opening today and then take profits
from those rises.
>This below is the Life Cycle of Markets. This has happened for a thousand
years. It did the same in our markets since the past four years. It'll do the same
for the rest of this year, the next, and forever.
Read this in detail to get a fix on how the "collective mood" influences stock
prices.
1.UP phase One:
...Mass emotion of pessimism prevails
...The reasons for that mood change every time :
...Question of human existence itself... like after what Hitler was doing in the
camps
...Survival itself is under question
...Depression: Personal psycho issues and Economic as well
...Wars
...Limited wars
...Recession
...Panic... different flavour every time it comes back
..."Bad news"
...Bear market rallies have had no impact on the overall downward trends in
stock markets
...Plenty of short selling still in progress
...The majority are finally convinced that a bear market will go on till they die
...Long-only Funds and Investors have finally gotten that "there is one more rally
to sell on"
...From these levels and a hopeless mood starts bottom buying by very-long-term
buyers.
...This is the mood and conditions for the seeds of a future bull market
..."Super-Undervalued" is the guideline for new buying
2. DOWN phase Two
...All that which rose in that Phase One gets totally sold out as profits are eroded
...The majority think those buyers were idiots and prove it to them too
...Call option premiums sink as the environment of fear comes back
...Now, investors are thoroughly convinced that the bear market is here to stay
...Volumes collapse; Volatility also stops. Selling pressure drys up.
...Fundamental conditions are as bad or worse than the previous bottom
...Underlying trends are bad
...BUT this time, stock prices don't hit those earlier lows
...Something is going on !
3. UP phase Three
...Strength
...Breadth
...Best fundamentals
...Increasing real prosperity
...Underlying trend considered bullish
...This move in stock markets is a wonder to behold !
...This move produces the most volume and price movements
...Breakouts in all stock trends
...Exceptional breadth
...Major trend confirmations
...Runaway prices
...Hourly, Daily, Bi-weekly, Weekly, Fortnightly, Monthly, Quarterly and Yearly
highs
4. DOWN phase Four
...Profit booking as most think the best part of economic growth is over
...Surprsing disappointments from corporates
...Lagging stocks now build new tops but fall as well
5. UP phase Five
...The public NOW reads the newspapers about some stock market boom going
on !
...Maximum speed starts now
...Maximum accleration
...Optimism runs extremely high about corporates, country, cricket team etcetera.
...Corporate performance, Market performance and real Fundamentals improve
genuinely
...Psychology creates over-valuation
...Manic media headlines about country, corporate individuals, and cricket team
...Public borrows and over-leverages itself since mood is that cricket team and
country now killers
...Arrogance shows up amongst politicians that they are Kings-of-the-World
...They threaten to pullout of Australian tour because one player was correctly
punished for abusing in Punjabi
These are the perfect seeds for the next bear phase.
5 A. DOWN phase FIVE A
...Prosperity and peace appear guaranteed forever
...Arrogant complacency that "...Everything I buy will make me a billionaire..Take
a bet !..."
...The feel-good felling is overpowering
...Economic improvement is geniune
...Selling comes back for unknown or insignificant reasons
...Prices fall suddenly and lots of it, at that
...Everybody convinced that this is a fantastic buying opportunity
...But recovery still not in sight
...Desperate buying goes on
...That does not help stock prices at all
...Disgust sets in
...Asset prices weaken...Especially those that were over-priced in easy-creditavailability
times
...Mood now starts to go rotten
...Public looks to Government to help them out of this morass of - - - -
...Government hams it in trying to help
...Central bankers cut interest rates but that helps only the big players
...Technical breakdown. Psychological breakdown. Marriages breakdown. Libido
breakdown.
...All these viewed as "buying opportunity"
5 B. UP phase FIVE B
...Bear rally starts <<-------------------------------------------------YOU are
somewhere here as of now
...Narrow, Emotional advance
...It's a phony
...Sucker plays
...Bull traps
...Speculator's paradise
...Orgies restart
...Dumb institutional complacency into buying more
...Stock-buying now narrowed to only the index drivers
...Fundamentals weaken subtly
...Aggressive euphoria turns to "denial"
...None of the typical averages or technicals say that you should be buying
...Not technically strong
..."There is something wrong with this market" says the average analyst
...This corrective advance rises even more...But only to falter at the very end
5 C. DOWN phase FIVE C
...Worst of bear market
...Strength, Breadth comes back...But this time on the sell side
...Prices decline relentlessly
...Fundamentals collapse as consuming public now withdraws from spending
...How is that?.Because all that euphoria gets snapped by the "excesses" in the
economy.
...Every boom is funded by cheap credit. And credit that's easily available to the
lay public.
...Lay public then leverages that credit and buys the most "fashionable asset", be
it dotcom company shares or land or tulip bulbs or whatever else is in vogue at
that moment of the decade or millenium.
...Euphoria turns to disgust.
...Manias turn those borrowings into undergarments-made-of-stone
...Everything now hangs down way below knees and then ankles and then one
drags those everythings on the ground.
...Life turns miserable.
...Everything in stock markets blamed on the ass- - - - - for a cricket team
...Stock market sees start of serious bear market with intermittent bear-rallies.
...Mood at its worst
...Suicial
...Divorce
...Hetro-sexuals turn Bi-sexual
...Gloom
...Hatred
...Seeds for war
...Stock market players turn to meditation, painting, teaching and acting in porn
movies
AND then restarts that 1 UP phase ONE
Go back above and keep seeing this Cycle of Life
The Mood
>Bad
Today:
>A trade-up and then profit booking
>An F&O driven rally expected after that
>Pre-Budget rally yet to pick up but noise says it started yesterday after RPower issues were largely closed out.
In Feb:
>A rally
From March onwards after the Budget:
>Bear market for many months
The Actual Game To Be Played In The Stock Markets To Rule Out
Investors / Speculators /Hni's/ Traders
Issues and Risks
>January retail sales will be announced before Wall Street opens this evening.Nobody expects anything positive. But how negative it could be, is the surprise
factor left for the markets to price in there tonight.
We stay negative about the impact of that news on stock prices.
>To say a broker does 1500 crores of turnover a day may sound superimpressive
to an outsider.
But the brokerage industry wants to know how much net profit that broker
makes on whatever the quantum of turnover be: A net of 15 paisa or 10 paisa?
That is the key to the bottomline of the broker. Not the turnover thing.
Just like that, outsiders may be impressed by that fantastic number of $800
billion worth of bond reinsurance that Warren Buffet said he'd take over from the
top bond insurers. The truth is, Buffet will make $4.50 billion !
That is not bad at all. 4.5 billion is a neat little thing to take home for assuming
someone else's risk.
Wall Street knows that the 800 billion dollar thing can be put aside and not be
overawed by it.
Which is why they clapped only with one hand.
Expect our markets to trade upwards at the opening today and then take profits
from those rises.
>This below is the Life Cycle of Markets. This has happened for a thousand
years. It did the same in our markets since the past four years. It'll do the same
for the rest of this year, the next, and forever.
Read this in detail to get a fix on how the "collective mood" influences stock
prices.
1.UP phase One:
...Mass emotion of pessimism prevails
...The reasons for that mood change every time :
...Question of human existence itself... like after what Hitler was doing in the
camps
...Survival itself is under question
...Depression: Personal psycho issues and Economic as well
...Wars
...Limited wars
...Recession
...Panic... different flavour every time it comes back
..."Bad news"
...Bear market rallies have had no impact on the overall downward trends in
stock markets
...Plenty of short selling still in progress
...The majority are finally convinced that a bear market will go on till they die
...Long-only Funds and Investors have finally gotten that "there is one more rally
to sell on"
...From these levels and a hopeless mood starts bottom buying by very-long-term
buyers.
...This is the mood and conditions for the seeds of a future bull market
..."Super-Undervalued" is the guideline for new buying
2. DOWN phase Two
...All that which rose in that Phase One gets totally sold out as profits are eroded
...The majority think those buyers were idiots and prove it to them too
...Call option premiums sink as the environment of fear comes back
...Now, investors are thoroughly convinced that the bear market is here to stay
...Volumes collapse; Volatility also stops. Selling pressure drys up.
...Fundamental conditions are as bad or worse than the previous bottom
...Underlying trends are bad
...BUT this time, stock prices don't hit those earlier lows
...Something is going on !
3. UP phase Three
...Strength
...Breadth
...Best fundamentals
...Increasing real prosperity
...Underlying trend considered bullish
...This move in stock markets is a wonder to behold !
...This move produces the most volume and price movements
...Breakouts in all stock trends
...Exceptional breadth
...Major trend confirmations
...Runaway prices
...Hourly, Daily, Bi-weekly, Weekly, Fortnightly, Monthly, Quarterly and Yearly
highs
4. DOWN phase Four
...Profit booking as most think the best part of economic growth is over
...Surprsing disappointments from corporates
...Lagging stocks now build new tops but fall as well
5. UP phase Five
...The public NOW reads the newspapers about some stock market boom going
on !
...Maximum speed starts now
...Maximum accleration
...Optimism runs extremely high about corporates, country, cricket team etcetera.
...Corporate performance, Market performance and real Fundamentals improve
genuinely
...Psychology creates over-valuation
...Manic media headlines about country, corporate individuals, and cricket team
...Public borrows and over-leverages itself since mood is that cricket team and
country now killers
...Arrogance shows up amongst politicians that they are Kings-of-the-World
...They threaten to pullout of Australian tour because one player was correctly
punished for abusing in Punjabi
These are the perfect seeds for the next bear phase.
5 A. DOWN phase FIVE A
...Prosperity and peace appear guaranteed forever
...Arrogant complacency that "...Everything I buy will make me a billionaire..Take
a bet !..."
...The feel-good felling is overpowering
...Economic improvement is geniune
...Selling comes back for unknown or insignificant reasons
...Prices fall suddenly and lots of it, at that
...Everybody convinced that this is a fantastic buying opportunity
...But recovery still not in sight
...Desperate buying goes on
...That does not help stock prices at all
...Disgust sets in
...Asset prices weaken...Especially those that were over-priced in easy-creditavailability
times
...Mood now starts to go rotten
...Public looks to Government to help them out of this morass of - - - -
...Government hams it in trying to help
...Central bankers cut interest rates but that helps only the big players
...Technical breakdown. Psychological breakdown. Marriages breakdown. Libido
breakdown.
...All these viewed as "buying opportunity"
5 B. UP phase FIVE B
...Bear rally starts <<-------------------------------------------------YOU are
somewhere here as of now
...Narrow, Emotional advance
...It's a phony
...Sucker plays
...Bull traps
...Speculator's paradise
...Orgies restart
...Dumb institutional complacency into buying more
...Stock-buying now narrowed to only the index drivers
...Fundamentals weaken subtly
...Aggressive euphoria turns to "denial"
...None of the typical averages or technicals say that you should be buying
...Not technically strong
..."There is something wrong with this market" says the average analyst
...This corrective advance rises even more...But only to falter at the very end
5 C. DOWN phase FIVE C
...Worst of bear market
...Strength, Breadth comes back...But this time on the sell side
...Prices decline relentlessly
...Fundamentals collapse as consuming public now withdraws from spending
...How is that?.Because all that euphoria gets snapped by the "excesses" in the
economy.
...Every boom is funded by cheap credit. And credit that's easily available to the
lay public.
...Lay public then leverages that credit and buys the most "fashionable asset", be
it dotcom company shares or land or tulip bulbs or whatever else is in vogue at
that moment of the decade or millenium.
...Euphoria turns to disgust.
...Manias turn those borrowings into undergarments-made-of-stone
...Everything now hangs down way below knees and then ankles and then one
drags those everythings on the ground.
...Life turns miserable.
...Everything in stock markets blamed on the ass- - - - - for a cricket team
...Stock market sees start of serious bear market with intermittent bear-rallies.
...Mood at its worst
...Suicial
...Divorce
...Hetro-sexuals turn Bi-sexual
...Gloom
...Hatred
...Seeds for war
...Stock market players turn to meditation, painting, teaching and acting in porn
movies
AND then restarts that 1 UP phase ONE
Go back above and keep seeing this Cycle of Life
The Mood
>Bad
Today:
>A trade-up and then profit booking
>An F&O driven rally expected after that
>Pre-Budget rally yet to pick up but noise says it started yesterday after RPower issues were largely closed out.
In Feb:
>A rally
From March onwards after the Budget:
>Bear market for many months
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