Maximum Pain

The market is going to do today what it has been designed to do. It is going to cause maximum pain to the as many of its participants as possible. After hurting the Bulls on the way down, the market is going to turn its attention to the Bears. Given the way the S&P traded yesterday and the follow through in Asia in the morning, it is a given that Nifty will open up. The only question really is by how much will it gap up?

I am short so I am bracing for a big gap up. I will cut my short positions and go long on the Nifty if the Nifty futures trades above 4641 or the first hour's high whichever is higher. This obviously means that I will wait for at least an hour before deciding the level at which I will cut my short position and go long.

The gap ups and downs have been taking a toll on my trading this year. However, commodities have been a different story and I have found that I have been able to trade commodities much better than the Nifty. Maybe it is because commodities are open till 12 in the night in India which means that we catch all of the European and a lot of the US action before the exchange shuts. There is therefore relatively less gap ups or downs.

But I trade commodities only on a personal basis and Nifty is what I trade for MAPE and this year has been not a great one till date. But I still have 3 months to go and 3 months is a long time in trading!