13200 came in first on DJIA; Dow Theory non-confirmation in place via negative divergence through Transports [both sea and rail freight rates are major contributors] Nevertheless, a topping process is in place now; by end-May 2012, we are very likely to see 12k on DJIA [going below is doubtful with so much liquidity by central bankers] Only a weekly close below 11800 can signal further weakness;
Shorts/Puts seem to be on the reward side with minimal risks [take 3 month forward contracts to be safe]; safe traders can now start building short positions and no hedge per say is required except for adequate margin in trading account to hold the short positions. Do not exercise leverage at this point of time; unilateral bears have already lost twice within 5 weeks, trying to catch a top and taking short positions with maximum leverage [once with SL @ SnP 1360 and then with SL @ SnP 1400!]
On the other hand there are bull calls for 14k, 15k etc which seems highly improbable in the next 6 to 8 weeks; will repeat the same thing that I keep repeating on Nifty on a daily basis; trade little - trade healthy; its time to book profits on calls/longs [long calls with far lower strike prices recommended on 31st Jan]
Shorts/Puts seem to be on the reward side with minimal risks [take 3 month forward contracts to be safe]; safe traders can now start building short positions and no hedge per say is required except for adequate margin in trading account to hold the short positions. Do not exercise leverage at this point of time; unilateral bears have already lost twice within 5 weeks, trying to catch a top and taking short positions with maximum leverage [once with SL @ SnP 1360 and then with SL @ SnP 1400!]
On the other hand there are bull calls for 14k, 15k etc which seems highly improbable in the next 6 to 8 weeks; will repeat the same thing that I keep repeating on Nifty on a daily basis; trade little - trade healthy; its time to book profits on calls/longs [long calls with far lower strike prices recommended on 31st Jan]
