Interest rate cuts as a means of improving stock market sentiment are not particularly successful. After the NASDAQ crash in 2000, Mr Greenspan begain his policy of rate cuts. While the cuts did improve sentiment for a few days, the bear market continued. In India, we have seen two cuts in October 2008 and big declines following the cuts.
Governments cannot change market sentiment by order. The market is a very democratic instrument. Markets change direction when a majority of the participants change their view. This change of view takes place on the changing market environment, not by government instructions.
Follow the Momentum
Short term Momentum is now in favor of the bulls. Traders should leave aside their preconceived ideas, and, follow the momentum. Thus, buy on dips, breakouts, with proper stops. Take profits on range expansion. On gap opens, follow the first 15 minute rule. These are the basics of technical analysis, and, they make money.
The base is the beginning of a bull market
In my previous post, I described Mr O'Neil's 'Reversal Day' theory and how it identfiies the start of a bull market. I also said, in my final notes: "I have not done any research on such inflection points. The base building process is my signal, that will take its own time. "
Now, my point is: It is possible that 2252 may have become the lowest point of the bear market. Maybe, another decline could stop at 2300 ? Or at 2700 ? Therefore, Mr O'Neil's Reversal Day theory may well work out, even as the market consolidates for months.
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Arthur Brooks, The Battle
► 2011 (200)
- ► November (9)
► October (28)
- Answers to comments oct31-11
- Process of Consolidation Likely
- Nifty Pattern Targets Reached
- Happy Diwali
- Stock Selection (based upon their historical volat...
- M&M Consolidation
- Niftnear ORB Trade
- A dip in an ongoing up trend
- TATA Motors Life Cycle
- Hindalco touches support
- Mystery of the missing trailing stop
- Nifty Live Oct 12-11
- Point and Figure Charts
- Aiming for a better trade
- Long term view of Nifty
- Zen stories for Traders
- Hero Motor Corp at its support level
- NR 7 in Nifty Weekly Chart
- trading with a gap open
- Silver Pushes against Resistance
- An unusual continuation pattern in the Nifty
- Sudden Rally
- Nifty at 4750
- There is a time to be old and a time to be bold
- Afternoon review
- Nifty - Long Term View
- Higher High - Higher Low pattern in CNX IT
- Bear market shows its strength
► September (53)
- The Bear Story
- Nifty in a well defined range
- Morning View Sept 29
- Nifty Options Trade
- Nifty on way to close higher for this F&O settleme...
- Learning Ideas
- Short term trend is up
- Something Better
- A tale of two trades
- Before the Open - Sept 26-11
- Reliance - something better
- Nifty - A long term view
- Adding value to your analysis
- ► 2010 (263)
- ► 2009 (293)
▼ 2008 (219)
▼ November (26)
- Weekend Reading, Nov 30.
- Rally, maybe
- This time it may be different
- Market will tell us when it is bottoming out
- Hard Work is the easiest way to success
- New Posts
- This Bear Market may last longer than we imagine
- Is there a rally ?
- Traders enjoy the process of trading
- Bear Market continues, Nifty, Sensex may go below ...
- Choppy Market with down bias
- What should Investors do now ?
- Nifty returns for a 'Test' of earlier lows
- The trend remains down
- A Matter of Trust
- Udayan in Amritsar
- Early Morning Review - Friday 14 Nov
- It is not about earnings downgrades
- Abrupt End to Uptrend
- Has the Bull Market Started ?
- The 2 PM Review
- So much volatility, Market resembles a Casino
- The Market Corrects its up trend
- Smart Rally, but careful as Nifty comes near resis...
- Quite times coming ?
- Surpirse Rate Cut may not add strength to markets
- ▼ November (26)