Shortening of Trends

I went home with a long position on the Nifty and prayed hard. It seems to have worked because the S&P ended in the positive and the Asian markets have opened up. The Eurozone problems seem to have not affected the markets for today at least which is all I want because I live and die in these markets on a daily basis. This was not the case until around last year but from the time the Euro crisis has taken its vicious hold on the collective consciousness of the market, trends in the market have got shorter and shorter to a point where we have trends now that last only for a day or two.

I will not be surprised if trends become even shorter and start lasting only for hours. We will hear market commentators say things like Nifty trended up in the morning session until Europe opened and then on we saw a reversal taking the Nifty down till 2:30. The final one hour, however, saw a recovery on a slight improvement in the S&P futures and hopes of better data in the US.

This trend of shortening of trends is therefore likely to continue until the markets start believing that the crisis has been pushed sufficiently down the road and some breathing space has been bought. Until then the best option we have as players in this markets is either not to trade at all and remain long passively or to trade frantically and pray hard. Which is what I did yesterday as I mentioned in the beginning of my note.

Continuing with this policy, I will cut my long positions if nifty futures trades below 5269. Until then I remain long.