Since morning today I have been reading in various online journals and I see that most experts are feeling that the markets right now are looking a bit stretched as they cannot break the barrier of 9000 and cross over it so it looks like it will fall.
Some say the fall might be around 10%. Frankly I read news just to see if there is some REAL NEWS in it. Not just what experts feel. Markets do not have any emotions – humans have but markets dot bother for human emotions.
So the reason that 9000 is not crossed for long does not fit into real practical news. There can be a fall but not because 9000 unable to break but could be for some other reason. But frankly 10% fall looks a bit far at least not this year until some real bad news hits in. In fact this strays true for ever.
History is a proof that many times the experts were proved wrong by the markets. So just read to know if there is some reality in the news, if not just ignore. Like I did today.
One news I felt correct was that results of US elections may propel markets higher. At least till then I feel 8,600-8,900 range will stay.
If you have done my Option Trading Course and reading this, it is a very good news for you. Keep making money and let the directional traders guess and lose while we keep making money. 🙂
What may move the markets in coming weeks?
Quarterly results are coming from blue-chips like TCS and Infosys. These are big companies and any good or bad news may move the markets but not more than 100 points for Nifty.
Also announcement of macroeconomic data – IIP and inflation is coming. I will keep an eye on this and will inform you.
The above factors will definitely move the markets. Up or down depends on what the news is.
Markets will remain closed on 11-October-2016 (Tuesday) for Dussehra or Vijay Dashami, and 12-October-2016 (Wednesday) for Muharram.
In my last article on Option Chain And Myth In Stock Markets there was a comment from Michael:
Hi Dilip,
If you dig deep in to the option chain, you will see that the market generally reverses direction at the strike price of max open interest. For eg, its good to buy when price is nearing the max puts (provided puts at that strike are continuously increasing with price is near) and its good to short when price is nearing max calls (provided calls at that strike are continuously increasing when price is near).
If the price is about to break out from the max open interest strike, the numbers of puts (for a break down) and the calls (for break out) will generally decrease. You can back test this for yourself, in the recent months and see the option chain predicted precisely.
Combining this with your directional strategy improves the odds of success 🙂
The reason this works it, professionals usually write options & hence by aligning with their direction, we have the upper hand. No wonder option buyers lose money.
Thanks,
Michael
My reply:
IMP NOTE For People Who Have NOT Done My Option Trading Course: Please take this as educational purpose only as it is just a comment. Please do your own research before doing what Michael is saying. I will do research on this and write a post some day. But what he says is if true then why most technical analyst fail? They should be doing the above and make a lot of money. So on the face of it I do not agree until research confirms this.
I will do some research on this. I have given a solid reason for not doing as anyone says. So please if you are a technical analyst (TA) do your own research on the above comment and let me know your results. It will be great help.
IMP NOTE For People Who Have Done My Option Trading Course: Since our trades are properly hedged and we are least bothered about direction of the markets you can try this. Since the hedge will take out tensions of trading nothing wrong to try this out. But please paper trade at least three times before trying this out and also send me the results. I am more interested in what my clients are doing rather than what I am doing as I am more interested in your profits and Thank You emails or WhatsApp messages which money cannot buy. I only get it by giving proper guidance and knowledge. In fact your Thank You emails and/or WhatsApp messages makes me more happy than when you pay for the course. 🙂
I still have some 150+ Thank You emails and WhatsApp messages which I am unable to upload in the site due to lack of time since customer service still taking too much time. Anyway if I find time I will upload – but I am saying this since last one year I think. 🙂
So please keep sending those messages it motivates me a lot and makes me very happy.
Wishing You All The Very Best.
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Comments on this entry are closed.
Though I am a free subscriber of yours yet I watch very carefully all updates.They r very rewarding and inspiring too.Hope to make our relation more strong in mere future by subscribing to your course.Initially I had suffered a loss of Rs 50;000/- but through your email talks I am recovering them slowly.
-Manoj
Good to read.
Thanks.
Yes do subscribe it will help more.
Everything written in Nifty options so that it is easy to understand.
Guys, don’t just think of getting more than 3% profits as suggested by Dilip. Keep investing these into long term wealth creating MF which can yield around 14% to 18% yoy. There are several MF available in the market. Start before 35 years of age to reap huge benefit.
Take a portion of profits from Dilip strategy & keep investing in MF through SIP to build solid wealth & keep adding cash to option trade to balance out things.
Thank You Ramamoorthy. I agree to what you say. In my 25-25-25-25 risk management policy I do keep investing in good 5 Star rated funds via SIP (Systematic Investment Plans) which is automatically invested from my bank account to my chosen Mutual Funds. Please chose just 3 or 4 Mutual Funds and invest the same amount in them. Anything less will be risky and anything more will be hard to manage.
Thank You.