The Secret Part II

I got up in the morning today to a spate of bad news. More deaths due to Swine flu, no rain etc. The worst news though was that Schumi will not be able to take part in the F-1 race. His neck has not yet recovered from a motorbike accident injury and he does not think that his neck will be able to take the incredible g forces that the neck is subjected to in a F-1 race. This was really disappointing. I was hoping that we will get to see him back at F-1. That would have been inspirational. Man!!! do we need inspiration in times like these.

Ok, back to markets. I am short since 4580 on the Nifty and had a stop at 4515. The Nifty went up but did not hit my stop by just 2 points. After that it dropped to give me some breathing room. I must have done something right in my affirmations yesterday!!!

Given the fact that the world markets dropped overnight, the Nifty might be on its way to my short term target of 4000. All jokes apart, or should I say all affirmations apart, if the Nifty crosses 4515 today, then I think that the uptrend is still intact. I will cut my short positions and go long with an expectation of a rally to 4700 at least.

The World markets are poised. The S&P is on the verge of moving below 992 which would turn its short term trend to down. Similarly I think Crude is into a short term downtrend. All this makes it more likely that we will see a continuation of the short term downtrend in Nifty. I can go on to give you details like a negative divergence in the Nifty in the daily charts etc to justify my view, but that really is not necessary. If one goes right then none of the reasons matter. If one goes wrong, then too all the reasons for the call do not matter.

After writing this note a thought strikes me. If what Nassim Taleb says in Fooled by Randomness is correct that market moves are essentially random and that trading success is essentially luck, then all my analysis is just about deluding myself and whatever trading skills I possess are in my imagination. Despite this, I am totally confident of my success. Not only do I have my imaginary trading skills I also have my affirmations to back me up!!!