Trade setup for 10th Aug

 It's clear. If you believe in technicals, then this is the time for you to short the market. 

1. RSI of nifty is almost 78(on daily charts)

2. Nifty is at 4.5% away from the 20DMA. 

3. VIX rising with markets. 

Usually, >70 RSI signifies overbought, and a nifty 5% away from 20DMA signifies overbought. 

But this time, it can be different and markets may not respect technicals. The FII money coming in may be strong enough for the technicals to fail.

The best strategy for this market is ratio spreads. Today I will be executing the below strategy in huge volumes

+1 X 18000, -4 X 18200ce, -4 X 18300ce, -4 X 18400ce

It is the same story in banknifty as well. 

If the RSI of the 2 indexes goes beyond 80 then I will start selling futures.

If you are scared to short, atleast don't go long. Wait for the dip to enter. 

The problem is that the dips will be very sharp in these kinds of markets. There might be a day when the markets may fall 300-400 points in a single session. At that point, you won't get the conviction to short. Now it looks risky to short as market may have a different story this time and can go higher.

There is some political drama going on in Bihar. Nitish Kumar has left NDA and joined Lalu. 

After a bull rally, markets either go sideways or will correct. If it goes sideways then it means that the bull rally will continue. 

Now again the inflation and semiconductor shortage issue has come to the limelight. Yesterday the US markets closed in the red fearing this.

Now 10-year yield is rising with US inflation data which will be coming soon. 

Coinbase came out with numbers and the numbers are bad. Now even bitcoin is close to $22k. Will the cryptos be able to survive this?

Softbank numbers which came some days back were also very very bad. They lost billions and billions of $. This is the first time they lost so heavily. Now the question is whether the new startups get the same kine of traction and funding as they used to get all these years??


  1. As I told above, I will be executing the above trade today.
  2. My algo is running in a loss for this month. Its currently sitting in a loss of close to 3.5%. This is the drawdown phase. I prefer to execute the algo for this entire month before concluding anything. I am OK to take a loss upto 10% for the capital I have deployed.
  1. Keep a close eye on US markets. There should be some trigger for the markets to fall. Will the inflation data be that trigger?
  2. Yesterday US markets fell and nasdaq fell more than 1%.
  3. Europe closed in the red.
  4. Today the Asian markets are in the red. SGX is suggesting a red opening. Will 17500 be protected?
  1. Crude is at $96. Crude is falling as there is fear of slowdown.
  2. $ is at Rs79.6
  3. If markets starts to fall, then USDINR may goto 80+
  1. Now these people are buying like they found gold in India. 
  2. In the last few months, they have sold heavily. Will that entirely be bought? 
  3. Yesterday they bought for 1500cr and DII sold for just 140cr