Friday, August 26, 2011

The Lost Decade

Balu writes:
Sir Just for imagination!! what if nifty trades in a range of 2250 and 6350 for a decade. Is it impossible? if election gap gets filled, then next etc etc..

My Notes: This is not imagination. It is quite possible that we may see such a scenario or  somthing similar. This means that 2250 support could push upto 3500 or 3800 and the resistance could move to 7500. Between these two levels, the markets could move around for a decade.

Vinod D says:

Dear Sudarshan, Could you please explain how one should trade the global indices through NSE...The expiry date and contract months given in the NSE website is a bit confusing..

My Notes:
There are two sets of contracts, monthly and quarterly. This should get you started.  I am not certain on the effectiveness of trading in the S&P when U.S. markets are closed.

Shazia has a detailed explaination of how psychology can create a breakdown of the 4000 levels. You should read his comments to understand this. Market levels are only for our undestanding. The market does no care for any level. It does what it wants. Also, sometimes, the levels become self-fulfilling.

Amarjeet says:
sir, please give example on chart how 4650 support level.

My Notes: Here is the chart.


 

2 comments:

Sasi Uppuluri said...

- It's very well explained by Shazia.Thank you for that post Shazia.

Sir, I have a doubt in terms of Psychology -
"90% of the people lose this game"
"90% of the people think alike and follow the crowd"
My question is - When 90% of them think alike and do the same thing, they should win. But why will they lose? What is the psychology behind this? Why will the markets not follow the majority and why will it follow the minority?

Clifford said...

Hi Sudarshan,
Could you please relate George Soros' theory of reflexivity with the recent downgrade of the US by S & P. Also, how would this theory play out in case QE3 is (or is not) carried out by the Fed? Here is an interesting link:
http://seekingalpha.com/article/126165-george-soros-reflexivity-and-market-reversals


Regards,
Clifford