Archive for March, 2011

The (un)ethical insider

Ultimately the Raj Rajaratnam insider trading issue questions whether information, like price, is inefficient

The Raj Rajaratnam case may seem like an important case of insider trading involving a hedge fund in US, but it is more important when it comes to illustrating how market participants comprehend their market place. Rajaratnam denies wrongdoing and has argued that investment advisers routinely speak to company insiders as they do research.

 

When Satyam’s Raju pleaded guilty, he cut his losses immediately. By fighting the case Raj has raised the stakes. He is climbing an uphill task. The amount under question is $45 million. The first question that comes to mind is how did a 22-per cent return generating $7-billion fund founder reach to create a network for funnelling information? When money could be made ethically why should a fund manager rely on the easy way out? Even if we assume Raj is right about routine investigative research for companies, how will the state quantify what insider information made what money? What if it was the underlying trend that helped Raj and not the information?

This brings us back to the Dynegy case of 2004…

This article is written for Business Standard
Time Triads, Time Fractals, Time Arbitrage, Performance Cycles are terms coined by Orpheus Research. Time Triads is our weekly market letter. The report covers various aspects on TIME patterns, TIME forecast, alternative research, emerging markets, behavioral finance, market fractals, econohistory, econostatistics, time cyclicality, investment psychology, socioeconomics, pop cultural trends, macro economics, interest rates, derivatives, money management, Intermarket trends etc.

 


Momentum vs. Cycles

 

Momentum was the first think I learnt in technical analysis. But after practicing the vocation for more than 10 years, I use few momentum indicators. For me all of them whether it’s RSI, MACD or anything else, they all tell me a similar story. Though I am a believer of confluence, my approach is not to look at various momentum indicators and look at the combined weight of evidence, but to harness various degrees of time. I was always more interested in knowing what is the result of the weekly, daily and 60 min RSI at the same time. What do they tell me together and not separately? This is where momentum miserably fails.

There are other reasons. Momentum is noisy. It has so many signals. If weekly RSI is a sell, daily RSI can be a buy. There can be a conflict. Third, there is no way of saying prior when an indicator has reached an extreme reading, how higher or lower can it go? One may say Constance Brown’s over-reactivity on momentum works. I would say it’s brilliant and I use it, but over-reactivity also can’t harness multiple degrees of time. There can be a negative reversal on 60 minutes and positive reversal on daily.

What’s my process? First I filter stocks through numeric rankings. Second I look for performance cycles (Jiseki) signals. Third I look at the price structure through Elliott and only after that (fourth) draw momentum. Just to make my case I have illustrated TCS here. Daily, 60 min RSI are oversold and weekly RSI is at 40.

A conventional approach would be to stick around for a price confirmation break of the potential Head and Shoulder neckline. Now if I look at momentum the signals are unclear, but if I look at Jiseki performance cycles, the sell signal is clear. Jiseki says TCS is ready to crack.

To read more of such updates on subscribe to Orpheus Research Reports.

This article is written for ATMA

Time Triads, Time Fractals, Time Arbitrage, Performance Cycles are terms coined by Orpheus Research. Time Triads is our weekly market letter. The report covers various aspects on TIME patterns, TIME forecast, alternative research, emerging markets, behavioral finance, market fractals, econohistory, econostatistics, time cyclicality, investment psychology, socioeconomics, pop cultural trends, macro economics, interest rates, derivatives, money management, Intermarket trends etc.

Alpha India Indices - Sector ranking

NIFTY Jiseki. Daily. The larger primary cycle (grey) remains down, while the positive crossover of the two smaller cycles suggest a potential completing correction up. The sector ranking continues to suggest BSE Auto, BSE Consumer Durables and CNXIT as the top rankers, while NIFTY VIX, BSE Power and BSEOIL are the worst. 12 out of 17 indices are ranked above 50%.

 

Alpha is a daily strategy signal product that gives trading and investment signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. Alpha is a part of the time triads analytics developed by Orpheus Research.

Coverage India: CNX100 traded stocks and Indian Indices.

Michesan Anna-Maria, Head of India Research. Anna discovered her interest of markets immediately after completing her graduate studies in Economics. She followed it up with post graduate studies in corporate finance. A host of research work in behavioral finance, option strategies and quantifying market sentiment followed. Anna covers Indian equity and combines Elliott, Time Fractals and Time Analytics to deliver accuracy across time frames. To review some of her work, check out the annual India accuracy report 2009.


The Bajaj Auto Case

Bajaj Auto is one of the top rankers of the Indian Early Economic sector and BSEAUTO is one of the top ranked Indian sectors. This means we have a double confirmation for the case of Bajaj Auto as a potential short opportunity.

To read more about Bajaj Auto, subscribe to Orpheus Research.

Alpha is a daily strategy signal product that gives trading and investment signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. Alpha is a part of the time triads analytics developed by Orpheus Research.

Coverage India: CNX100 traded stocks and Indian Indices.

Michesan Anna-Maria, Head of India Research. Anna discovered her interest of markets immediately after completing her graduate studies in Economics. She followed it up with post graduate studies in corporate finance. A host of research work in behavioral finance, option strategies and quantifying market sentiment followed. Anna covers Indian equity and combines Elliott, Time Fractals and Time Analytics to deliver accuracy across time frames. To review some of her work, check out the annual India accuracy report 2009.

 


Alpha India LE - The JSW Steel case

JSW Steel is one of the top rankers of the Indian Late Economic sector on both the daily and weekly rankings. The minor structure looks like a completed corrective 2/B wave up and now the beginning of a potential third impulsive wave down. Sub 0.382 key Fibonacci retracement levels near psychological 900 we should get further negative confirmation. Our first minor target lies at previous minor lows at 750 levels.

Alpha is a daily strategy signal product that gives trading and investment signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. Alpha is a part of the time triads analytics developed by Orpheus Research.

Coverage India: CNX100 traded stocks and Indian Indices.

Michesan Anna-Maria, Head of India Research. Anna discovered her interest of markets immediately after completing her graduate studies in Economics. She followed it up with post graduate studies in corporate finance. A host of research work in behavioral finance, option strategies and quantifying market sentiment followed. Anna covers Indian equity and combines Elliott, Time Fractals and Time Analytics to deliver accuracy across time frames. To review some of her work, check out the annual India accuracy report 2009.


Nikkei anticipated and happened

Price dropped severely as both scenarios have pointed, yet the decline prolonged well below the 10,000 psychological levels, thus fitting into the more bearish alternative scenario. The current bounce looks like a circle iv subdivision of C/3, which means that it should stop in the 9,200-9,500 area. Another wave down would follow, circle v - probably less sharp than the previous one but still able to mark new lows, marginally below 8,300.

Alpha is a daily strategy signal product that gives long only, short only, pair trading signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are carried over minor (10-30 days) and intermediate (above 30 days) time frame. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. This is a part of the time triads analytics developed by Orpheus Research.

Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the Orpheus Research products.

Coverage Global: Dow 30 components, Global Indices, ETF SPDRS, Commodities

Dan-Andrei Rusu graduated in 2005 the Faculty of Economics Cluj-Napoca, “Dimitrie Cantemir” University. In the same year he joined BT Securities as a financial analyst. He is currently the Head of Research at BT Securities and a speaker with Romanian Brokers’ Association. He is an MTA (Market Technicians Association, New York) affiliate and cleared CMT level 1 exam. He is a contributing columnist for Orpheus Capitals for the ALPHA GLOBAL INDICES.


Coffee confirms a shooting star

 

To read more of such updates on Global Indices subscribe to Orpheus Research Reports.

This is a TICKS.GLOBAL update

 


Alpha India ME - The Cummins case

Cummins is one of the top rankers of the Indian Mid Economic sector. The minor structure looks like an ongoing impulsive 3/C wave with a pending fifth leg down. Sub current supports at 660 levels we are looking lower till previous supports at psychological 600 levels or even lower till 560 levels.

Alpha is a daily strategy signal product that gives trading and investment signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. Alpha is a part of the time triads analytics developed by Orpheus Research.

Coverage India: CNX100 traded stocks and Indian Indices.

Michesan Anna-Maria, Head of India Research. Anna discovered her interest of markets immediately after completing her graduate studies in Economics. She followed it up with post graduate studies in corporate finance. A host of research work in behavioral finance, option strategies and quantifying market sentiment followed. Anna covers Indian equity and combines Elliott, Time Fractals and Time Analytics to deliver accuracy across time frames. To review some of her work, check out the annual India accuracy report 2009.


Nifty March Seasonality

March seasonality has a good track record for Nifty. We have had seven signals since 2003 March. Barring Mar 2004, every March has brought in a reversal of multi week or multi month degree. Multi week or multi month is what traders live for. Now we are in March again. If the March seasonality is to be understood, it brings a reversal. A sideways movement is also a reversal.

 

The previous trend from Jan was negative and brought Nifty lower by around 1000 points (15%). Now March seasonality has arrested the previous down trend. This is a reversal too. This was anticipated in our bounce back case in ‘The Sensex Projection’. We think that the bounce back case is still unfolding up till 5,600-5,700 levels.

The quality of the bounce seems corrective at this stage and suggests a lower resolution after the countertrend move is over in the final week of March. After which the next down leg sub 5,000 to 4,700 should begin.

To read more of such updates on subscribe to Orpheus Research Reports.

This article is written for ATMA

Time Triads, Time Fractals, Time Arbitrage, Performance Cycles are terms coined by Orpheus Research. Time Triads is our weekly market letter. The report covers various aspects on TIME patterns, TIME forecast, alternative research, emerging markets, behavioral finance, market fractals, econohistory, econostatistics, time cyclicality, investment psychology, socioeconomics, pop cultural trends, macro economics, interest rates, derivatives, money management, Intermarket trends etc.

 


Alpha India Indices - NSEBANK alternate

NSEBANK Daily Inverted. Alternate. The alternate view suggests a potential Head and Shoulders reversal pattern. Neckline levels lie at 11,000. This remains a low probability scenario for now.

Alpha is a daily strategy signal product that gives trading and investment signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. Alpha is a part of the time triads analytics developed by Orpheus Research.

Coverage India: CNX100 traded stocks and Indian Indices.

Michesan Anna-Maria, Head of India Research. Anna discovered her interest of markets immediately after completing her graduate studies in Economics. She followed it up with post graduate studies in corporate finance. A host of research work in behavioral finance, option strategies and quantifying market sentiment followed. Anna covers Indian equity and combines Elliott, Time Fractals and Time Analytics to deliver accuracy across time frames. To review some of her work, check out the annual India accuracy report 2009.