Tops down analysis indicating Monthly timeframe is balancing, Weekly timeframe is trending down and Daily timeframe is trending up. Kind of mixed timeframes which indicates that markets are in the phase of total uncertainty where most of the players opinion are not aligned in the same direction. Every timeframe has their own opinion about markets at current juncture.
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In this social media Era becoming an Independent thinker is lot difficult as we are often bombarded with continuous flow of opinions,information,rumors from the facebook groups, Whatsapp/telegram chat groups, twitter, financial news portals, TV channels, Youtube channels, E mail newsletters. Everything talks about what the consensus is doing. Some are contrarians, some are trend followers. Often traders ended up with the biased opinions from their fellow community traders/Investors.
Trading requires process complex information into simple ideas. Thursdays trading started with price opening within the range initial high confidence was higher however it got fades sooner and starts getting into balancing mode. Interestingly markets took support exactly at the tuesdays low (prev day low) and started one timeframing during mid of the day.
After two decades of Mania Era asset bubbles and sentiment extremes, what now seems normal to many investors is actually highly abnormal. That’s right — many investors no longer fear asset bubbles. That is why too many will be caught off-guard when the Mania Era inevitably ends. Many investors are not frightened by the phrases “stock market bubble,” “housing bubble” or any other type of financial bubble.
Inventory is getting short to too short again. Holding shorts could be risky here as the wednesday trading session showed a volatility decline despite a huge drop. Possible signs of short term trend reversal. Nifty is trading very close to the 200 moving average level. In such a situation when short covering happens one have to run for cover especially when inventory conditions are getting short to too short.
By Monday, Feb. 26, the stock market rally that carried major indexes out of the depths of the recent sell-off came to within 1000 points or so of the DJIA’s Jan. 26 all-time high of 26,616. The next day, on Feb. 27, a major financial publication published this headline (Forbes): U.S. Stock Market Surge – ‘The Bull Market Is Back’
Nifty futures on Tuesday session extended its losses in the second half of trading. Though the market opened gap up, soon the early morning buyers confidence faded within the first hour of trading. First half of the trading was more of a choppy trading session followed by a late sell off with spike formation.
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Onetimeframing against Initial Balance is one of my favorite intraday trading strategy with a fairly decent win rate(60-70%). Concept is adopted from market profile to trade against majority of the weak intraday players. Initial Balance is nothing but the first 1 hour high and low range. Whenever price started one timeframing against the Initial Balance direction it shows the presence and confidence of day timeframe players.
Nifty Futures is currently balancing on Monthly, Weekly and Daily timeframe however this balancing could not be continued for a very longer period. Indian markets are showing relatively calm volatility compared to the global markets. Volatility had shooted up massively in global markets in the last three trading session.
Nifty Futures opened gap down on Wednesdays trading session post gap down more of day timeframe sellers started actively dominated the market and resulting in a open auction outside the range.Though price is in balancing mode, value started building lower. At the same time, day timeframe stops too hunted in the second half of the trading session resulting in closing the Wednesday daily gap thereby removing the weaker hand intraday sellers.