During times of panic, nothing works. Everything gets slaughtered as market participants run all over the place. The guessing game then yields no result. That’s why Avoid call works best then. But there comes a time when things start settling down and normalcy returns.
Lesson: During Jan-Feb 2016: The market was near the breaking point but then belief in the trend helped. One should always trust the trend even during darkest hours
If market does not hold up here, we are in for a big trouble. Indian market and S&P500 both at very important support level. Watch for more
— Deepak Singh (@smarket) February 12, 2016
Yes Nifty made a bottom on Feb 12 2016 – right at the support.
It all started with S&P500 taking support around Jan 20 2016.
Bearishness on one side: S&P500 is up more than 5% from the base of 1810https://t.co/yzggZY30Tz
Charts give you visibility— Deepak Singh (@smarket) February 17, 2016
I did point to the importance of holding 1810 level on S&P500 on Jan 24 2016 in the post titled – “The comfort of S&P500“. The reason then was the S&P500 bounce from 1810 (Jan 20 2016). The same thing S&P 500 did again on Feb 11.
Source: Chartalert.com
Here’s how the big picture on S&P 500 started giving comfort
Source: Chartalert.com
This stability in Global markets helped Indian stock market too especially the Nifty. This was the reason I wrote this article on Feb 14 2016
In case you missed it – Nifty is right now standing at the ULTIMATE support level https://t.co/ye533VhNMN
— Deepak Singh (@smarket) February 15, 2016
This is what Nifty did from 200 week ma in 2016 till demonetization (disruptive event) happened
Source: Chartalert.com
Just look at how S&P 500 ralled after bottoming in Jan-Feb 2016.
Source: Chartalert.com
Lesson: How the market behaves count much more than what you think?
Demonetization resulted in a sell-off in the Indian market. The reaction was there for everyone to see but there’s no such thing that happened when it came to US market. Lots of us including me turned bearish in my opinion on BREXIT and Trump Victory but what saved us: open eyes and bullish market reaction.
Let the market inform one's opinion and avoid imposing one's opinion upon the market. Being open minded is a "MUST" quality for a trader.
— Peter Brandt (@PeterLBrandt) March 31, 2016
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers