iCharts Discussions

SwingTrader · Posted: Sun Jan 12, 2014 9:14 am Post subject:

The short signal in late Jan 2013 preceding the 600 pts decline was triggered when VIX was at similar levels (actually around this time - Oct '12 to Jan '13 - it was lower than the current levels). So this signal can't be ignored just because of lower vix levels.

Also, options writers will not stop writing just because of lower IVs. They just ramp up position size. Writers are not going to switch to buying due to lower IVs, they write for different reasons - hedging, consistent income etc. - this they will continue to do as lower IVs are always temporary. The idea of OTM PCR is sound in my opinion across range vix levels. But one thing that has been revealed in recent observations is that we get clearer signals in a downtrend than in uptrend.

What we have seen is just a signal on the rank chart which may or may not work out. It still has to be confirmed by options sentiment. Even after confirmation it may or may not work. Let price do its thing.

Let us see...

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

point taken, ST

SwingTrader · Posted: Mon Jan 13, 2014 8:30 pm Post subject:

Updated NSE OTM PCR & Options Sentiment charts (13.01.2014)

Today's move was definitely powerful. But what I can't figure out is why both the rank and options sentiment do not reflect the bullishness? Both the charts do not show a change similar in magnitude of the price move. In any case, the rank hitting 90% recently has not been confirmed by price yet so no bearish signal yet. The price, of course, says that clearly.

SwingTrader · Posted: Sun Jan 19, 2014 8:37 am Post subject:

Updated NSE OTM PCR Rank, Options Sentiment & Market Breadth Charts (17.01.2014)

SHORT TERM : Strong bearish bias indicated at the moment. Rank is holding up indicating bearish sentiment in options OI. Options sentiment holding up above the median line. If it hits the first bearish line, a short would be confirmed.

MEDIUM / LONG TERM : Market breadth indicates a possible significant pullback as the medium term breadth (blue line) is trending down. Long term breadth remains strong so any pullback is going to be a chance for investors to load up on equities.

SwingTrader · Posted: Wed Jan 22, 2014 10:03 pm Post subject:

NSE Stocks Average Change - 1 months vs 3 Months (updated 22.01.2014)

Seeing divergence vs NS in both 1 month & 3 months average price changes.

SwingTrader · Posted: Sun Jan 26, 2014 1:26 pm Post subject:

Updated OTM PCR Rank, Options Sentiment & Market Breadth charts (24.01.2014)

Market seems poised to go the way sentiment charts have been indicating recently - down. If uptrend does not assert itself in the next few days we could see the start of a correction. 6230 and 6130 on NS would be the levels to watch for near term support. A break of these could kick off a deeper correction.

OTM PCR rank above 90% now which indicates a strong bearish bias. Options sentiment has almost confirmed a sell. Medium term breadth is trending down hard too. The NSE avg 1 month vs 3 months change, posted earlier this week, also has indicated a strong divergence with NS which is another negative at the moment.

Long term breadth is holding still and as long as it holds above zero during the probable correction, it would indicate a good opportunity to add on to investments.

SwingTrader · Posted: Mon Jan 27, 2014 5:48 pm Post subject:

Updated NSE OTM PCR Rank chart (27.01.2014)

Rank at 99.87% !!!

Rank needs to hold above 50% going forward for the down trend to continue. Let us enjoy until the down trend lasts Very Happy

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

ST, I feel when it came down to 10% in early Jan, a short term short opened up.

SwingTrader · Posted: Mon Jan 27, 2014 7:00 pm Post subject:

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

that's true ST

SwingTrader · Posted: Tue Jan 28, 2014 6:46 pm Post subject:

Updated NSE OTM PCR Rank and Options Sentiment Charts (28.01.2014)

Rank continues to hold above 90%, so bearish sentiment rules at the moment. But the raw options sentiment has gone ballistic hinting at extreme bearishness. So caution is advised for shorters as there could be a pullback.

apka · Black Belt Joined: 13 Dec 2011 Posts: 6137

It will be interesting to see what the rank shows on Friday after Jan series options get annulled.

SwingTrader · Posted: Tue Jan 28, 2014 9:46 pm Post subject:

SwingTrader · Posted: Sun Feb 02, 2014 8:41 am Post subject:

Updated Breadth & Sentiment charts (31.01.2014)

Options OTM PCR Rank and options sentiment continue to show strong bearish sentiment in the market. Price too is broken in the short term. Even in the case of a relief rally, I don't expect NS to cross 6200. I will change my bearish opinion only after I see otm pcr rank, options sentiment, breadth indicate bullishess.

OTM PCR Rank & Options Sentiment : Continue to indicate strong bearish sentiment

Market Breadth : Long term holding steady. Intermediate & short-term breadth are bearish. This continues to indicate that this down move is just a mild correction. As long as long term breadth holds steady through this correction, this view will hold good.

Avg % changes - 1 mth vs 3 mths : This chart indicates the probable duration of the current move (intermediate term). The 3 mths line usually gives an indication of coming reversals when it goes near extreme (90% and 10%). Currently it looks like the down move is going to continue for now.

vinay28 · Black Belt Joined: 24 Dec 2010 Posts: 11748

Rank shouldnot come below 50 now to maintain bearish bias.