Earthquakes keep on hitting the great island country of Japan almost on daily basis. But the Japanese have learnt to live with them. They are always prepared for it. They expect these and are, therefore, well safeguarded against them.
Earthquakes are frequent in stock markets as well.
Some are unforseen and unprecedented and we can do little about these.
But many are regular earthquakes with mild intensity on the Rich(ter)-scale.
Here are some of them.
Identify and understand them, expect them at expected times.
Be prepared to not only safeguard yourself but also benefit from them!
1) Profit taking
= inevitable earthquake at the extremes of the rallies
2) Expiry
= lot of shake-up happens at expiry cross-overs
3) 3'o clock mild earthquake
= day traders start squaring off around and after this time. all auto-square offs of Day Trading positions are generally set at 3pm.
4) Short buildup in Open Interest
= if you can anticipate this quake, you can make a lot of money or atleast save a lot!
5) Longs buildup in Open Interest
= same about this one
6) Short covering
= when shorts are unwound at the end of a full or partial bear rally, it rebounds like a boomerang!
7) Long unwinding
= when longs get unwound at the end of a full or partial bull rally, it can bury you like an avalanche!
8) Quarterly Results
= This one is a big and unpredictable quake. hits the markets once every 3 months.
9) RBI policy announcement
= This one also comes once a quarter or during emergencies, but gives you time to pause trading!
10) US data release
= This one is an almost daily affair. Right from the jobless data to the housing data to the data on cats and dogs....every damn data in US creates ripple effect in Asia. Can't do much about these as we are sleeping when these mini-quakes come.
11) US Federal Bank policy announcement
= This quake is notorious for its negative tendencies!
12) Important events
= If you see a steam roller coming towards you, pl get aside.
13) Europian markets opening
= This quake comes around noon in India. Everyone is sniffed by the snake around that time. so, beware!
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