Long and Rationalising it

All my trend following friends and our commonly held views about the Indian markets did not help my short Nifty position when the Nifty rallied above 5278 and trigged my buy. I am therefore out of my Nifty short trade which I had taken at 5280 at almost no loss. I am now long on the Nifty and desperately hoping that my friend Operatorman is proved right once again. Remember that he had told me that Nifty will expire this April at 5600!

Having said this, let me enumerate what will make me feel better about my Nifty long position                                                               1] If Nifty starts trading above yesterdays high of 5293 (in the futures).

2] If Nifty has to trend up then I do believe that Rupee will have to appreciate. Looking at the INR chart (through the lens of my system) shows that the Dollar is still in an uptrend. If that changes and the Rupee starts appreciating then that will definitely make me feel better. The first sign of Rupee appreciating will be if INR falls below 51.05

3] The Euro starts appreciating against the Dollar. Any risk on trade cannot work for long if the Euro flounders. The Euro is in a very weak uptrend against the Dollar in the very short term. All bets are off if Euro falls below 1.3050 against the Dollar.

4] Gold is the ultimate risk-off trade. If Gold again dips below 1632USD then I will feel much better about my Nifty long position.

Despite knowing the futility of hope and rational thinking in trading and managing a Nifty position-specially over the short term-I continue to indulge in it. This little self delusion is fine as long as I know that finally what matters is my system and my ability to stay true to its demands. I will therefore remain long until Nifty breaks below 5203 (yesterdays low) at which point, I will cut my long and go short on the Nifty.