Was already in some 31500PE sells based on this, those too depreciated sharply when BNF went up. A neat 55 points there too
Had a loss trade earlier
This volume was not what I intended, I tried to take 500, 1500 went thru due to my incompetence with the web terminal. I am more comfortable with the keyboard, not the mouse :(
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To mentally take a break , as it was getting exhausting psychologically, went back to charts. Analysing BNF to explain what I saw on Friday which prompted me to carry shorts
COI started increasing over past two day, short buildup as price down+COI up. This is OIV Analyzer end of day
Now see the realtime charts. understand the context. The rise in COI over the day got trapped in the last 30 min selloff. The whole COI builtup has an average price of around 32k. Downsides may be in this manner :
below 32000--->31800
below 31800--->31400
below 31400--->30500
Ok, here goes the story.Morning received this message
Like an idiot, I fell into the trap. Clicking the link took me to an official looking webpage of twitter. Asked for mobile authentication ( i had 2FA on)
This is handle which did this, looked like exact Twitter Support handle. ( now changed after I reported this to twitter ). Had a blue tick , verified mark
There was a slight short buildup on friday, but what's alarming in the COI build-up today till now .
Get ready for a wild ride....
There are some markets you trade aggressively and some markets you watch. This is a market to watch for next 2 hours for me. Will be interested to see if this COI is carried into closing
And those who are asking me up or down, I honestly don't know. I was playing this for a 31k target, once that has been met will have to reassess post closing. Intraday might take small trades only
The BNF OI puzzle, what I think happened. This is post mortem analysis 😀
COi was going up like crazy since early March, positions were being created in far month ( go thru my previous tweets)
OI = net shorts = net longs. So informed traders were taking a huge position expecting a parabolic move ( we did not know whether up or down). As of now, my guess is that the whole position was a long position. Someone had the info of the rate cut
You can see that the positions were cut hugely on 1st April. What happened on 1st April ?
In technical analysis, majority of the patterns were first observed visually and then the rules made. Observing this interesting phenomenon on BNF over the past one month.
Any strong up day on BNF is immediately followed by a gap down open from the previous closing
So any upmove /upday is almost never having any follow-up buying the next day. Unless this pattern gets broken by 1-3 days of upmove after a strong closing, BNF looks extremely bearish. The logic of BNF seems to be " will kick your ass if you take bullish positions overnight" 😀
Jokes apart, if you want to understand the logical basis of patterns, this book is still the best :
Technical analysis of stock trends by Edwards and Magee
Received quite a few questions on VIX, that why isn't VIX spiking up in this volatility and in this downmove ( VIX generally spikes up when index goes down, that's why it's also called the ' Fear Index'
The question is valid. This is what I think is happening :
VIX is calculated on the order book of options, this months and next months so close to expiry. VIX is kinda weighted average of the individual options volatilities
Volatility or IV is basically demand and supply. More demand for options, higher IV and more supply of options, lower IVs