Thursday, September 24, 2009


"The day I trust my money to a mathematician and a computer programmer (Stock Trading Systems), will be the day I leave for Romania to be a Shepherd."

This is from an article by Barry Moore in The Liberated Stock Trader (

The article goes on to define different types of  personalities in the stock market and what they do and what the liberated stock trader should be doing.  A must read.

To get back to our markets, many of you would remember the mayhem in Jan 2008.  Sentiment was gung ho and there were not many caution notices put out.  Nine out of ten people in the market were busy trying to figure out what to do with the enormous amount of liquidity that had poured into their pockets as well as how much the Anil Ambani IPO would fetch them on listing.  The market CRASHED!!!

Coming back to the Sept of 2009, one finds too many Caution stickers all around.  If you happen to be in the trading circuit, it is more than likely that you must have heard the doom tale from nine out of every ten people that you bump into.  Possibly, as they say, once bitten twice shy.  Public memory is short but not so short as to forget the wounds of a year and a half back.  Many a trader bit the dust, some never to rise again.

I must say as I have been maintaining that the day we found support at 3900 sometime mid July 2009 and pulled back to scale new highs we entered a new phase of the Bull Market.  Yes, we are in a bull run.  Many expected the markets to fill gaps that were left post the UPA victory.  However, not all gaps are filled immediately.  Surely we will get back to those gaps (should a catastrophic event take place) but not in the near future.

There was a time when sentiment moved markets.  Today liquidity moves markets.  Money needs to make more money and if it does not then there is a huge price to pay, one has no business to be in the financial markets.  Targets are too steep and extraordinary and demand innovative strategies.  The number of retail participants has increased manifold.  Markets have become more complex and simple tools do not seem to work.

Coming to the Delinking Theory, yes, we are figuratively delinked from the US markets, however, not so macro economically.  The US markets are still in a bear rally and until the Dow scales 10800 (this is the figure as of now and is likely to change as time passes) with great momentum, it will still be a bear rally out there in the Americas.  The action had shifted elsewhere long ago!!!

No, I am not a Technical Analyst.  I am a Psychic!!!:)

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