Wednesday

Shorted India’s NIFTY

Post a Comment December 9, 2009 – 8:55 am |   | Permalink |  Print This Post |

We shorted India’s NIFTY in our personal portfolio after taking some profits in China (closed at 12880) and Hang Seng (closed at 21800) shorts (This is off the record of our public portfolio). Percentage-wise, NIFTY has outperformed China (and the rest of the world) over a 6 month period - so we are just shifting gears from China/Hang Seng to India in our shorts. Whilst we believe in the BRIC story, for the time being we see some pullbacks. Relativity is the theme of our trading strategy, which requires constant gear-shifting (ie short the strongest market and long the weakest market). For the time being, the weakest is still Japan’s Nikkei (despite the crazy 10% move in 1 week) and the strongest is still India’s NIFTY. We sold some Nikkei at 10200 and will unload more on the next rally.

Our post on 1937 and 2007 fibonacci correlation have been well received - thank you all for your kind comments. (There were a few (deserved) sarcastic comments from bears who took the post as our projected target for the Dow of 11300 - right before a 104 point fall in the Dow! I think the bears are shooting the wrong person here - we are super bearish and expect markets to retest March lows at the minimum - we just don’t know when and how high it goes before doing that). We are holding back on going 100% short until 11300 is hit (if it doesn’t great - we will add more shorts on our way down). For now, India’s NIFTY shorts are taking a lot of margin and we do not want to be in a position where sleep is compromised!

Shorting NIFTY

Our DJIA options expire on 18 Dec (OPEX) - so if markets move up AFTER OPEX, then our shorts will face the full brunt of the bulls. We will consider rehedging post OPEX. For now, lets sit back and watch the show.