Monday, August 14, 2017

Traders Sentiment Digest

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Highest Open Interest in Calls is for 10000 with Open Interest at 5,476,425 a change of 7% and IV of 11.22 with change in OI to Volume of this strike at 1.9.

  2. Second Highest Open Interest in Calls is for 10100 with Open Interest at 5,021,475 a change of -3% and IV of 11.57 with change in OI to Volume of this strike at 1.1.

  3. Largest Change OI in Calls is for 9800 with Open Interest at 3,344,100 a change of 116% and IV of 11.4 with change in OI to Volume of this strike at 10.5.

  4. Highest Open Interest in Puts is for 9500 with Open Interest at 4,483,500 a change of 21% and IV of 16.63 with change in OI to Volume of this strike at 5.7.

  5. Second Highest Open Interest in Puts is for 9800 with Open Interest at 4,140,750 a change of -10% and IV of 14.45 with change in OI to Volume of this strike at 3.2.

  6. Largest Change OI in Puts is for 9900 with Open Interest at 2,447,625 a change of -34% and IV of 13.87 with change in OI to Volume of this strike at 20.

  7. #Nifty Put to Call Ratio of the actively traded strikes for the Current Series is 0.83 which indicates mixed sentiment.

  8. The popular Option Writing Strategies continue to be Short Strap Strangle and Covered Call Writing, using 9800/9500 strikes

  9. Distinct possibility of forming a balance around 9673 - 9737

  10. There is no sign of reversal, as yet

  11. The Week could bring lots of whipsaws

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Thursday, August 10, 2017

Traders Sentiment Digest

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Highest Open Interest in Calls is for 10100 with Open Interest at 5,192,625 a change of 3% and IV of 10.91 with change in OI to Volume of this strike at 1.1.

  2. Second Highest Open Interest in Calls is for 10000 with Open Interest at 5,116,650 a change of 25% and IV of 11.21 with change in OI to Volume of this strike at 5.7.

  3. Largest Change OI in Calls is for 9900 with Open Interest at 3,251,400 a change of 56% and IV of 11.54 with change in OI to Volume of this strike at 8.1.

  4. Highest Open Interest in Puts is for 9800 with Open Interest at 4,620,525 a change of -4% and IV of 12.2 with change in OI to Volume of this strike at 1.3.

  5. Second Highest Open Interest in Puts is for 9900 with Open Interest at 3,724,200 a change of -4% and IV of 11.48 with change in OI to Volume of this strike at 1.

  6. Largest Change OI in Puts is for 10000 with Open Interest at 3,310,275 a change of -19% and IV of 10.41 with change in OI to Volume of this strike at 11.8.

  7. #Nifty Put to Call Ratio of the actively traded strikes for the Current Series is 0.84 which indicates mixed sentiment.

  8. The day saw covered and naked call writing while the put writers were virtually running for cover

  9. The momentum and sentimental bias has turned severely negative

  10. No sign of reversal as yet

  11. The 50 DMA is likely to be tested tomorrow which is at 9773

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Opening Moves

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Highest Open Interest in Calls is for 10100 with Open Interest at 5,627,175 a change of 12% and IV of 9.26 with change in OI to Volume of this strike at 10.2.

  2. Second Highest Open Interest in Calls is for 10200 with Open Interest at 4,855,350 a change of 5% and IV of 9.53 with change in OI to Volume of this strike at 4.3.

  3. Largest Change OI in Calls is for 9900 with Open Interest at 3,132,225 a change of 51% and IV of 9.28 with change in OI to Volume of this strike at 21.8.

  4. Highest Open Interest in Puts is for 9800 with Open Interest at 5,156,175 a change of 7% and IV of 13.46 with change in OI to Volume of this strike at 5.1.

  5. Second Highest Open Interest in Puts is for 9900 with Open Interest at 3,974,850 a change of 3% and IV of 12.94 with change in OI to Volume of this strike at 1.9.

  6. Largest Change OI in Puts is for 9700 with Open Interest at 3,310,200 a change of -11% and IV of 14.16 with change in OI to Volume of this strike at 8.

  7. #Nifty Put to Call Ratio of the actively traded strikes for the Current Series is 0.85 which indicates mixed sentiment.

  8. Popular strategies for the day continue to be covered calls and short strap strangles

  9. The PCR is moving down slowly but surely

  10. This indicates that more and more Option Sellers are turning bearish

  11. Nifty is attempting to balance below previous VAL.

  12. It is unlikely to slip below 9810 Cash. But if it does than this correction would run quite deeper.

  13. Nifty is oversold below 9837 Cash, it'd be a good trade location for intraday longs, with 9810 Cash as Stop

  14. Likely range till 14:30 is 9810 to 9923

  15. The open is Open Auction Outside Value, and Outside Range

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Wednesday, August 9, 2017

Traders Sentiment Digest

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Highest Open Interest in Calls is for 10100 with Open Interest at 5,024,250 a change of 2% and IV of 9.06 with change in OI to Volume of this strike at 0.8.

  2. Second Highest Open Interest in Calls is for 10200 with Open Interest at 4,641,300 a change of 6% and IV of 9.43 with change in OI to Volume of this strike at 2.1.

  3. Largest Change OI in Calls is for 10000 with Open Interest at 4,081,500 a change of 23% and IV of 8.74 with change in OI to Volume of this strike at 5.7.

  4. Highest Open Interest in Puts is for 9800 with Open Interest at 4,838,175 a change of 6% and IV of 14.66 with change in OI to Volume of this strike at 2.4.

  5. Second Highest Open Interest in Puts is for 10000 with Open Interest at 4,072,125 a change of -13% and IV of 14.2 with change in OI to Volume of this strike at 5.8.

  6. Largest Change OI in Puts is for 10000 with Open Interest at 4,072,125 a change of -13% and IV of 14.2 with change in OI to Volume of this strike at 5.8.

  7. #Nifty Put to Call Ratio of the actively traded strikes for the Current Series is 0.88 which indicates mixed sentiment.

  8. The popular option writing strategies these days are short strap strangle and writing covered calls

  9. Nifty has begun to balance which means that selling pressure has begun to subside

  10. Tomorrow Nifty Cash might find support anywhere between 9847 - 9897

  11. The range could well be somewhere between 9847 - 9937, provided Nifty breaches 9889

  12. The Sentimental as well as Momentum Biases are negative

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Opening Moves

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Highest Open Interest in Calls is for 10100 with Open Interest at 5,304,450 a change of 8% and IV of 9.01 with change in OI to Volume of this strike at 9.6.

  2. Second Highest Open Interest in Calls is for 10200 with Open Interest at 4,797,450 a change of 9% and IV of 9.27 with change in OI to Volume of this strike at 10.3.

  3. Largest Change OI in Calls is for 10000 with Open Interest at 3,825,000 a change of 15% and IV of 8.87 with change in OI to Volume of this strike at 13.4.

  4. Highest Open Interest in Puts is for 9800 with Open Interest at 4,748,550 a change of 4% and IV of 14.08 with change in OI to Volume of this strike at 4.5.

  5. Second Highest Open Interest in Puts is for 10000 with Open Interest at 4,667,700 a change of 0% and IV of 13.35 with change in OI to Volume of this strike at 0.2.

  6. Largest Change OI in Puts is for 9900 with Open Interest at 4,182,375 a change of 7% and IV of 13.62 with change in OI to Volume of this strike at 5.4.

  7. #Nifty Put to Call Ratio of the actively traded strikes for the Current Series is 0.89 which indicates mixed sentiment.

  8. 9800 PE marginally beats the open interest at 10-000 strike

  9. Decent call writing at 10-000

  10. It indicates that Option seller are wary of the fact that current correction/reaction could carry all the way till 50 DMA which would be around 9747

  11. The popular strategy for the day is short strap strangle using 10-000 CE and 9800 PE

  12. The opening is Open Auction Inside Range

  13. The Momentum Bias for the current session is neutral

  14. The Sentimental Bias is moderately negative

  15. Nifty is likely to trade between 9897 to 9973 range for the most part of the day

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Traders Sentiment Digest

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Highest Open Interest in Calls is for 10100 with Open Interest at 4,905,075 a change of 25% and IV of 8.76 with change in OI to Volume of this strike at 4.9.

  2. Second Highest Open Interest in Calls is for 10500 with Open Interest at 4,457,925 a change of 15% and IV of 10.22 with change in OI to Volume of this strike at 11.1.

  3. Largest Change OI in Calls is for 10100 with Open Interest at 4,905,075 a change of 25% and IV of 8.76 with change in OI to Volume of this strike at 4.9.


  4. Highest Open Interest in Puts is for 10000 with Open Interest at 4,677,750 a change of -12% and IV of 12.44 with change in OI to Volume of this strike at 3.2.

  5. Second Highest Open Interest in Puts is for 9800 with Open Interest at 4,583,250 a change of 9% and IV of 13.36 with change in OI to Volume of this strike at 2.9.

  6. Largest Change OI in Puts is for 10100 with Open Interest at 1,884,375 a change of -26% and IV of 12.36 with change in OI to Volume of this strike at 9.2.

  7. #Nifty Put to Call Ratio of the actively traded strikes for the Current Series is 0.9 which indicates mixed sentiment.

  8. Highest Open Interest in puts continue to be at 10K

  9. Put Writers continue to be unperturbed by today's minor correction

  10. There is no indication that the present correction has ended

  11. But there appears to be a strong support at 9889 for tomorrow

  12. However, a close below 9950, could indicate a likelihood of test of 50 DMA around 9747

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Tuesday, August 8, 2017

Traders Sentiment Digest

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Highest Open Interest in Calls is for 10200 with Open Interest at 3,958,575 a change of 21% and IV of 8.32 with change in OI to Volume of this strike at 9.4.

  2. Second Highest Open Interest in Calls is for 10100 with Open Interest at 3,924,825 a change of 10% and IV of 8.13 with change in OI to Volume of this strike at 5.8.

  3. Largest Change OI in Calls is for 10200 with Open Interest at 3,958,575 a change of 21% and IV of 8.32 with change in OI to Volume of this strike at 9.4.


  4. Highest Open Interest in Puts is for 10000 with Open Interest at 5,321,925 a change of 2% and IV of 11.9 with change in OI to Volume of this strike at 1.5.

  5. Second Highest Open Interest in Puts is for 9800 with Open Interest at 4,204,425 a change of 3% and IV of 13 with change in OI to Volume of this strike at 4.1.

  6. Largest Change OI in Puts is for 9700 with Open Interest at 3,824,625 a change of 10% and IV of 13.7 with change in OI to Volume of this strike at 11.3.


  7. The strikes that carry the highest Open Interest are the ones that are also being traded intraday. This indicates that the Option writers are confident that Nifty lacks any directional momentum at the moment
  8. Iron Condor writers are active in the current series. It indicates that Option experts are confident that the volatility would decrease in coming sessions.
  9. Basically what we are looking at is a rangebound market unless the high of the day 10-088 or 9944 is taken out. This means that sentimental bias is neutral

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Monday, August 7, 2017

Opening Moves

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Highest Open Interest in Calls is for 10100 with Open Interest at 3,955,500 a change of 11% and IV of 7.86 with change in OI to Volume of this strike at 17.2.

  2. Second Highest Open Interest in Calls is for 10500 with Open Interest at 3,911,550 a change of 2% and IV of 8.95 with change in OI to Volume of this strike at 12.1.

  3. Largest Change OI in Calls is for 10200 with Open Interest at 3,776,700 a change of 16% and IV of 8.11 with change in OI to Volume of this strike at 20.9.


  4. Highest Open Interest in Puts is for 10000 with Open Interest at 5,391,000 a change of 4% and IV of 12.28 with change in OI to Volume of this strike at 8.7.

  5. Second Highest Open Interest in Puts is for 9900 with Open Interest at 4,099,275 a change of 2% and IV of 12.8 with change in OI to Volume of this strike at 5.2.

  6. Largest Change OI in Puts is for 9700 with Open Interest at 3,693,225 a change of 6% and IV of 14.08 with change in OI to Volume of this strike at 18.9.

  7. The popular Option writing strategy for the day is Short Strap Strangle
  8. The strike used 10-200/10-000
  9. The Open today is Open Auction Outside Value but Inside Range
  10. The Friday was a volatile day, hence there are no clear VAH and VAL points

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Sunday, August 6, 2017

Nifty Derivatives This Week

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. FIIs have been going short relentlessly in the current series;
  2. The Options sellers don't have a clear view about the direction of Nifty
  3. The Bias could be positive above 10-023 (BankNifty: 24723) and negative below it
  4. The Expected range could be somewhere between 9923 - 10-223 (BankNifty: 24-250 to 25-300)
  5. Nifty and BankNifty appear to be in corrective mode
Please read the sidebar carefully. Thank You for your visit

Monday, May 15, 2017

Swing Updates

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
Hello Everyone,

By the grace of God, I am doing fine. It's just that I am pursuing what I love most.. hence not blogging currently.

There is no definite timeframe in which I would restart blogging...

Blog readers, who want to remain in touch regarding the Swings in Nifty/ BankNifty could subscribe to me, by paying a nominal fee of Rs 50,000 for one year (annual subscription),  and I would be taking your phone calls during the market hours.

And regarding this subscription you could call me on 0 - 9760 894 423.

My Russian friends could contact me regarding anything... anything.

Yours,

Mohammed Javed Akhtar

Wednesday, February 22, 2017

Changes in blog address

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Moving blogs to Wordpress
  2. This blog has moved to mountingthemomentum.wordpress.com
  3. The SMFN has moved to mechanicsofmarkets.wordpress.com
  4. A new blog about Money Management and Trading Psychology is now available at mathsnotmyths.wordpress.com
Please read the sidebar carefully. Thank You for your visit

Monday, February 13, 2017

The Outlook for Nifty

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias is positive above 8723.
  2. Nifty would be range-bound between 8737 to 8857.
  3. If Nifty continues to sustain above 8700, it might stage a sharp bounce towards 8917.

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Thursday, January 26, 2017

But whoever would be great among you must be your servant, and whoever would be first among you must be slave of all

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Both bias and trend are positive above 8523, hence keep buying on dips.
  2. Nifty has staged multiple breakouts on huge volumes.
  3. It might continue to rise or stall before Feb 1, 2017.
Please read the sidebar carefully. Thank You for your visit

Sunday, January 22, 2017

SPEEDKING

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias is negative below 8447.
  2. The only support in sight is 8273.
  3. Yes I do provide "services". Don't bother if you intend to negotiate.

Please read the sidebar carefully. Thank You for your visit

Wednesday, January 18, 2017

"...And he that seeketh. findeth..."

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias would be positive above 8323.
  2. If Nifty closes above 8473, then it could test test 8523, 8597.
  3. Otherwise, Nifty could continue to grind between 8497 and 8347
  4. Nifty has been "parked" between 8497-8373,(awaiting the next trigger)
  5. The more it consolidates, the more severe the breakout above 8500;

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Sunday, January 15, 2017

O thou of little faith, wherefore didst thou doubt?

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias would be positive above 8323.
  2. If Nifty closes above 8473, then it could test test 8523, 8597,
  3. Otherwise, Nifty could continue to grind between 8497 and 8347.
  4. So any short set up above 8473 could prove to be a good idea, as long as it doesn't close above 8473.
  5. Conversely, Any buying set up below 8323 has a good chance of being in profits.

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Wednesday, January 11, 2017

Something in the way....

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias is positive above 8217.
  2. Nifty is Rangebound between 8357 to 8173.
  3. Nifty could test 8445 - 8497.

My heartfelt apology for forgetting to update the SPX blog. Please read the sidebar carefully. Thank You for your visit. Love you all

Sunday, January 8, 2017

Back to Ixtlan

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias is positive above 8173 and negative below it.
  2. Nifty is Rangebound between 8123 to 8357.
  3. NIFTY50 needs one daily close above 8277 (200 DMA, previous swing high) to indicate a short term reversal. Otherwise it's a mere consolidation around 50 DMA.

Please read the sidebar carefully. Thank You for your visit

Wednesday, January 4, 2017

Ready for Romance

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias is positive above 8100 and negative below it..
  2. Nifty is Rangebound between 8337 to 8047. Above 8337, Nifty could test 8497
  3. It needs one daily close above 8277 (200 DMA, previous swing high) to indicate a short term reversal. Otherwise it's a mere consolidation around 50 DMA.

Please read the sidebar carefully. Thank You for your visit

Sunday, January 1, 2017

Happy New Year 2017

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias is positive above 8137 and negative below it.
  2. Nifty is Rangebound between 8337 to 8047.
  3. It needs one daily close above 8277 to indicate a short term reversal. Otherwise it's a mere consolidation.

The previously paid blog saturnus17.blogspot.in is being opened for everyone. Would try to update it regularly, God Willing. Thanks for your visit.

Wednesday, December 28, 2016

Heart of Glass

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias is negative below 8137. If goes above 8137, then might try 8237.
  2. Nifty is Rangebound between 8100 to 7947.
  3. Nifty is sell on bounces below 8100 for a target of 7885 .
Please read the sidebar carefully. Thank You for your visit

Sunday, December 25, 2016

Hermes Calling

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias is negative below 8130.
  2. Nifty is Rangebound between 8100 to 7947.
  3. Nifty is sell on bounces below 8100 for a target of 7885 .
Please read the sidebar carefully. Thank You for your visit

Wednesday, December 21, 2016

Tide is high

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias is negative below 8177.
  2. Nifty is Rangebound between 8043 to 8297.
  3. Nifty would remain under selling pressure below 8112.

Please read the sidebar carefully. Thank You for your visit

Saturday, December 17, 2016

Noah (A.S)

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias is negative below 8337.
  2. Nifty is Rangebound between 8337 to 8057.
  3. If Nifty continues to sustain above 8097, it might stage a corrective bounce towards 8237, 8337 - traversing the range.

Please read the sidebar carefully. Thank You for your visit

Wednesday, December 14, 2016

The Familiar of Time And Allies

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias: Mildly Negative below 8337
  2. Rangebound: 8337 - 8056;
  3. 7916 is a local bottom, sell on rise setup till below 8337;

Please read the sidebar carefully

Monday, December 12, 2016

Transition

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. The Bias is mildly negative to neutral below 8329;
  2. Resistances are 8294, 8329 and supports are 8197, 8147;
  3. Between 8329 and 8057, consider Nifty to be range-bound;

Please read the sidebar carefully

Wednesday, December 7, 2016

AbraCADabrA

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. The Bias is positive above 8031.
  2. Bouncing back Nifty would kiss 8123 - 8167 - 8219
  3. In case Nifty slips below 8031, it could test 8009 - 7963 - 7883

Please read the sidebar carefully

Sunday, December 4, 2016

1986

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. Bias is positive above 8057;
  2. Trading above 8057, Nifty could achieve 8197, 8273, 8337
  3. In case it moves below 8057, then Nifty could test 7990 and 7955

Updates on Tue, Thu and Sun. For clarity in context, please refer to previous posts. Thanks.

Thursday, December 1, 2016

Call of the Wild

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. The Bias is positive - corrections notwithstanding;
  2. Above 8237 Nifty could target 8273 - 8337;
  3. For continuation of uptrend, 8147 is the key support, above it bullish, below it bearish;

Updates on Wed and Sun. For clarity in context, please refer to previous posts. Thanks.

Sunday, November 27, 2016

Smoke on the Water

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. The bias is neutral to positive
  2. Nifty would be rangebound below 8137,(between 7916 - 8137);
  3. Above 8137 Nifty could test 8237 - 8323

Biweekly updates on every Wednesday and Sunday, For clarity in context, kindly refer to previous posts.

Saturday, November 26, 2016

Physics of Wall Street: A Brief History of Predicting the Unpredictable

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
(As per my own research crashes could be predicted 6 to 12 months in advance. Holds true for all the crashes in Indian Equity Markets. I have recorded the same phenomenon in Gold.)

Following is review of the book by a certified Vine Amazon Customer:

It is not easy to come up with star ratings for this book. I will split the difference between two and four stars. Here is why...

On one hand, I consider it to be a chronology of scientific efforts to predict markets beginning as early as the 18th Century, all the way up to 2012. As such, it is very interesting in terms of some the best known historical names dabbling in it. The storytelling in the book is not very good, but despite that it kept my interest through many chapters.

On the other hand, I consider this book to be an attempt to explain (to the layman) how science can be used to predict markets. To that end, the examples of Simons and Sornette (and their spectacular success on Wall Street) are presented without going into details. One cannot justify everything by the brilliance of these men alone. If they indeed were successful based on their knowledge of physics, how they managed to do that should have been analyzed in the book. Instead, the author takes a very long-winded tour of random statistical distributions starting with Gaussians, then he moves on to Cauchy distributions and other fat-tailed distributions, and how they may be relevant to markets. If that was all there is for the scientific methodology of market prediction, you would not need physicists like Simons and Sornette. Anybody with some basic math and statistics will do fine. The physicists do far more than that, and none of that was discussed in the book. They come up with models of dynamic market balance, they convert these models to differential equations to be solved, and they (approximately) solve them (on fast super-computers.) It would have been fascinating if the author had any details available on that subject.

On the other hand, this book discusses a fascinating question on and off many times: can markets really be predicted? All indications are that markets can be predicted by sophisticated mathematical models (done by physicists) most of the time (when markets behave normally.) But there are times when markets do something really wild. The market crashes of 1929, 1989, 1997, and 2007 are examples. The real question is this: can a market crash be predicted a year in advance? The author discusses this topic too and tries to explain it as reaching the critical point when some rapid and discontinuous change takes place. The physics is very rich in well understood critical phenomena, many of which can be applied to markets. That's where the non-linear dynamics comes in. I believe (I don't know this for a fact) that some of the physicists on Wall Street can predict a major market crash several days (or even possibly weeks) ahead. But they can't do that a year in advance. The non-linear dynamics is notoriously sensitive to initial conditions, and the quality of the prediction deteriorates as we project farther and farther out into the future.

On the other hand, this book never discusses in detail one of the major dilemmas of market prediction. We (physicists) take great delight in discovering the laws of nature so that we can predict how it behaves. In this endeavor, we tacitly assume that nature continues to behave in the same manner before and after our discovery. The fact that we suddenly know how it behaves does not change nature's behavior. This tacit assumption almost certainly fails with markets if the discovery is made public. There are a hoard of economists out there who would trample on each other for a better predictive model of markets, which may earn them the Nobel Prize. If indeed such a model is ever developed that can predict the markets well (not only in normal times but also shortly before market crashes) it will spell its own doom. In response to this new model, the behavior of the markets will change sufficiently to counter the prediction and render it useless. The only way such a model remains successful is by not making it public, and guarding it as a trade secret. That's how the likes of Simons and Sornette succeed, while most others eventually fail. Simons and Sornette never reveal how exactly they predict markets using physics. The author could have written a chapter (or several chapters) about this, but he did not.

Finally, the worst part of this book is about the inaccuracies it contains about who did what. Most of these are physics related (quite strangely since the author is supposed to know that), and not about the main topic of the book. For that reason, maybe they are forgivable. For example, the author implies that the gauge theory provides us a way of translating vectors from one point of curved space-time to another. While we physicists know how that should be done, translating points in curved space-time has very little to do with gauge theories. The author later corrects himself by acknowledging that the gauge theories were something else altogether and correctly credits Yang and Mills for discovering them in 1953. Never mentioned in the book is the fact that the first gauge theory even predates Yang and Mills, all the way back to 1879. It is none other than Maxwell's classical electrodynamics, even though Maxwell himself never used that term.

So in summary, if you know very little about quantitative market prediction, I highly recommend the book, you will learn things from this book: four stars. If you have some knowledge about it, then you will not get much out of the book except a few names and places in history, not all of which are correct: two stars. I will average the two ratings.

Wednesday, November 23, 2016

Gangsta's Paradise

With The Name of God, The Most Merciful. The Most Beneficent,
And The Excellent Helper, And The Excellent Protector
  1. The Bias is neutral to negative
  2. Below 8137, Nifty would be rangebound (between 7916 - 8137);
  3. Nifty could form a local bottom around 7850 and stage a bounce towards 8237

Biweekly updates on every Wednesday and Sunday, For clarity in context, kindly refer to previous posts. Praying for your success.