We just got back from 6 days in India and I think it will add some value to give you some perspective on the kinds of things we learned. Sean McLaughlin is our Chief Options Strategist and had never been to Asia before. This was an eye opening experience for him and one that reiterated a lot of important things I noticed in my prior visits to Mumbai.
We attended a CMT Conference, we filmed a documentary on Indian Options Trading, we ate some of the best food this planet has to offer, we hung out with some of the nicest and coolest people know and got to learn a ton from everything around us. I love going to Mumbai and it’s so nice to see the rest of the gang enjoyed their time there as well.
What I always like to say is that Technical Analysis doesn't give us all the answers, but it certainly goes a long way in helping us ask the right questions. That's what this is all about.
For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it's a custom index or inverted, who knows!
We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.
You can guess what it is if you must, but the real value comes from sharing what you would do right now.Buy,Sell, or Do Nothing?
The Nifty 50 and Nifty 500 are back at the top of their multi-year range right as we're starting to see signs of exhaustion in various global markets.
Failed breakouts and bearish momentum divergences help us to identify potential reversals in the market and we're seeing a few of them occur in India and elsewhere.
Over the weekend I was running our "Weekend Momentum Report" for Institutional Clients and the message was very similar to last week, so I thought it was worth sharing.
While we were going to write a comprehensive post on the most important monthly charts from November, we realized there are only two that matter to India's stock market right now.
Are you guys noticing how the new 52-week high list keeps getting longer, and not shorter?
I can't emphasize enough how the lies about weak market breadth have been just that: Lies, or myths, or whatever words you need to use that won't offend people. I stopped caring about that sort of thing a long time ago and just tell it like it is (someone has to). I'm just not seeing the weak breadth scenario playing out like they keep telling me. It's actually been quite the opposite. We've been seeing expansion in participation for months. So this is really nothing new.
The Value Line Index has been a helpful barometer of US Stock Market strength in the past, and today is no different.
As November draws to a close, it's time to review positions with December options that remain open (haven't already hit profit targets or been stopped out).
Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice -- it's time to take action.
