Linearity or trend in a price does not depict the strength and weakness cycles in a price very well. Momentum is a popular secondary indicator after price because it de trends the price and elucidates when the trend in a price strengthens and weakens. Why is this important? A stock or asset bought in a […]
Divergences are also an extension of the Dow Theory rule of non confirmation between indices. DOW Theory looks for non confirmation between two indices. While divergence looks for non confirmation between price and its RSI. Unlike failure swings, divergences are a bit loosely defined. There are simple and complex divergences. There are also divergence failures […]
MOVING SUB 100, PREPARING FOR 300 A recent conversation with an old friend on 11 July, went like this. MP: How are things at your end? You ready to retire after making your billion? RL: Well I have not yet reached the billion dollar value, still struggling to hit that number and then quit. Meanwhile […]
Attractive valuations should lead to price performance. This statement may be partially true in secular bull markets. But when markets fall for more than a year, we need more than attractive valuations to recession proof our investments. As good valuations necessarily don’t outperform and even if they do, there is no fast retribution. Things take […]
Accepting that we are cycle blind is a step forward to understanding economic uncertainties that surround us. Just like it takes 10 years to become a glassmith, for a global analyst, it takes 10 years to witness the Juglar recession and cycle truth.
10 per cent moves may be a normal volatility on an emerging market like ROMANIA. But when a stock makes a year high while broad market is still making new lows, we have more than a bad volatility case here, we have outperformance. There are only seven stocks which are positive for the year and […]
Warren Buffet calls it calculated, Ivan Boesky (1987 Wall Street Arbitrageur) said its good, Catholicism considers it one among the top seven sins and environmentalists may call it a disease. Greed means different things to different people. And speculation though considered the foundation stone of the capitalist society, in its extreme form, greed, can bring […]
Last whole week we have been working on the new issue of XTR 21. Our leading blue chip index is 6 months old and a clear market leader. We have some performance history now and we wanted to rerun the model before we start the second half of the year. As we mentioned prior, statistical […]
Understanding Biases can not only help an investor refine his investment strategy but also help time markets. The current short bias in the market gives us cues whether NIFTY BANK will collapse, or will push up in Q3. Predisposition and anticipation. The last time we mentioned Matthew McConaughey was when we borrowed FOOL’s GOLD from […]
I first read Nassim Taleb’s story on the virtue of buying cheap options in 2000. It was a tough time for an option believer in those days in India. Out of my basement stint for an e-broker, which was struggling under startup pressures with “nobody seems to be interested in futures” statement emailed to me, […]