Volatility is Dead in November. The intraday trading range got drastically reduced throughout the days of Nov 2019 series. Could be frustrating most of the directional traders. 10 Day ATR of Nifty Futures is at the lowest level for the year 2019. Will the volatility ever will revive? This post will try to study Nifty Futures volatility and understand volatility compression and expansion and how it helps traders to stick to reality.
Visualizing volatility gives us an impressive idea about the nature of the ongoing phase (Sideways, Volatile, Trending) and accordingly one can justify how to position in the market. Here is the Amibroker AFL code color-coded with different volatile phases to identify various market phases
Nifty November futures post emotional buyers dominance took a 100 pointer on the downside. Trading sentiment turned down on the daily charts with immediate quick flip resistance comes around 10663-10674 band. Trading Focus remains down as long as the price is able to hold down below the immediate resistance band. Short term focus on the downside is towards the 10640 and 10580 reference levels.
October month started with high volatile movement in Nifty Futures where it swings between 10857 – 11090 during Monday trading session. But don’t be surprised with such sort of wild volatility swings. On the higher timeframe (Daily Charts) Nifty is still in a sideways mode as last 7 days in a row Nifty Spot tested 11000 levels regardless of where nifty went, which makes the positional trading difficult to hold on to your conclusions. Welcome to the psychological reference game.
IndiaVIX is a volatility measure of the future expected volatility. It is calculated based on the bid and ask price of the out of the money options for near month and mid month options. India VIX during the year 2017 spent most of the time below 14 which eventually turns out to be a slow moving trending markets. In fact during the entire year 2017 , Nifty never seen a 2% negative loss on EOD basis. That shows the confidence of the majority of the market participants.
Where is the Volatility? this is the question you would be asking yourself if you are a frequent short term trader in this market. Recent market movements are filled with choppiness/whipsaw and compressed in a very tight narrow range. Trading opportunities are often very less in this kind of environment unless the India VIX moves above 18.
Recently, Indian govt announced a particular scheme in their budget notes which took a lot of attention, especially gold merchants and speculators. With gold prices tumbling since last couple of years, the new scheme-if it works, would not only increase the supply of precious metal at domestic level, in-turn cuts our international gold imports which further depresses the price at global scale.
Government spending policies that influence macroeconomic conditions. Through fiscal policy, regulators attempt to improve unemployment rates, control inflation, stabilize business cycles and influence interest rates in an effort to control the economy. Fiscal policy is largely based on the ideas of British economist John Maynard Keynes (1883–1946), who believed governments could change economic performance by adjusting tax rates and government spending.
If you are a regular reader of my articles, then you know “I hate technical indicators”. They are a derivative of price action, nothing more than a mathematical complex paralysis. My clients frequently question me-“Hey do you use any indicator”? Most probably my reply will be no-because majority of you guys know, I am a pure Price action trader!
Global economic and geopolitical events lined up in a different way this time ever since 1982 commodity glut. The best way to approach this year is being a skeptical contrarian Investor and I hope this article will shed some light into most important and less known method
This week is expiry for derivative markets with dried up volatility and Nifty spot managed to close above 7900 on weekly basis for the very first time .India’s Q2 GDP data and Fiscal Deficit data(Macro Economic data) scheduled during this week on August 29. So far FII’s had more close to Rs 98,802 crore this year in bond market compared to Rs 76,705 crore in equity market.
Nifty fell on late wednesday and banking stocks led the decline.The Bank Nifty fell 1.9% as yields on bonds rose, heightening concerns over the lenders’ debt holdings. Banking stocks such as ICICI Bank, State Bank of India (SBI), Punjab National Bank, Bank of India, Axis Bank and Canara Bank are down 2% each. IDBI is the top looser and lost more that 6%. It should be noted that Reserve bank of India on Tuesday cuts banks’ statutory liquidity ratio by 50 bps to 22.00 pct of deposits from August 9 and leaves repo rate unchanged at 8 percent