I continue to remain long on the Nifty. The STT becomes a SELL below 5546. There is one change though. The LTT becomes a sell below 5502 instead of the 5446 which I had earlier.

The market has been doing nothing for the last 3 days. But commodities have been on a major run. Gold and Silver have rallied sharply with Gold setting new highs beyond 1600 USD. Industrial metals and crude have rallied too but nothing close to the rally in precious metals. This divergence between precious metals and industrial metals is a source of some concern. While I can make some money trading them and I am happy to see them rally, the fact that Gold and Silver have rallied so much without a commensurate rally in industrial metals is a sign of fear in the marketplace. The good news is that we saw some heavy selling in Gold, Silver and a rally in industrial metals yesterday. Clearly a fall in Gold and Silver can run concurrent with a rally in Equities. However, if we see a resumption in the rally of both these precious metals then I would expect a fall in Nifty and would expect to see my stoplosses being triggered.

Despite these linkages and assumptions about Gold, Silver and equities I will just do what my system dictates. Therefore, I remain long.

Current Position  STT: Long LTT: Long

Possible Trades

STT: cut long and go short < 5546

LTT: Cut long and go short < 5502