If you are looking for a topping out of world markets -- two very important indices to watch for

You got it right - the mother of all indices! US Banking Index. It never happens that world markets will top out without the US Banking index - where all the mess started off back in July 2007. 

US Bank Index has underperformed S&P500 for the last few months and it has just started rallying - trying to take out resistance around 51. To me the writing is on the wall - If KBW Bank Index does manage to take out the resistance level then don't look for a top in S&P500 or any other world markets very soon!

The next one is Topix Japanese Banking Index, which is down 90% from its 1992 levels! It recently hit an all time low in November!

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Update on 22nd Dec
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One more picture -- the Japanese Index from 1984-2010

BTW -- As of this morning (22nd Dec) in US markets, US Bank index has made a 6 month high crossing the 51.XX resistance. It looks like it can go up another 7-8% before it meets next resistance at 56-57 range.

Nifty bottoming chart

DIVISLAB now a buy?

Some charts that explain the long entry, stop loss & resistances for DIVISLAB

Patience Please - From BkForexAdvisors.com

Patience Please

(BKForexAdvisors.com)

Want to know what is the greatest enemy of most traders? Patience. Most of us simply get in and out of our trades way too quickly making our entries too early and taking our exits too fast. For those of us who trade on intra-day basis the problem is even worse as we are often tempted to trade just for the sake of trading and one impatient decision can erase half a days work.

As speculators we have only only one true edge in the market - selectivity. Investors have much more capital than we do and are able to weather wide swings in price. Market makers have much better information on flow and while making money from bid ask spreads. Both of those participants can remain in the market on near permanent basis. As traders we don't have such luxury. But we do have one serious advantage - we don't have to play the game when there is no meaningful activity. We can sit on the sidelines for as long as we want. Unfortunately, that's something that very few of us do.

I certainly can't do it very well. My need to be involved often trumps the good sense to be selective and I wind up paying for my impulsive actions over and over and over again. In fact I know that if I was more patient my P&L would improve markedly.

Depending on your time horizon trading requires two different types of patience. If you are a short term intra day trader patience in timing is much more important than getting an optimal price. Essentially you need great patience in entry since your targets are relatively close and will likely be hit if you are correct in your analysis of the price action but so will your stops if you are wrong. On the other hand longer term positional traders typically have much wider stops, so they can often survive the ebb and flow of intra day price action but have a difficult time in holding their position to the target profit. Basically short term traders needs patience with their entries, while longer term traders need patience with their exits.

One of the great ironies of trading is that we often focus all of our energy on money management and never consider the importance of patience to our overall success. After a while almost all of us learn to take stops, to avoid doubling down into losing positions and to control our leverage, Yet few of us work on learning how to be more patient which ultimately may be the true key to long term success.

Buy the Dip -- explained. Warning: The video contains bad language .. but there's definite truth in this

http://www.zerohedge.com/article/buy-dip

Options/futures data for 26th Nov (EOD)

Summary:

1. Again as we saw on Thursday, the DEC Options data is not displaying that bearishness we have seen on the screen in the last few days. Just take 5800PE vs 5800CEs - the 5800PEs are massive 51L vs 24L 5800CEs (even after a 100% increase in 5800CE OI on Friday). 

2. 5900 seems to be balanced level with a negative bias. Given that there is only 9L difference between PE/CE, it could go either way depending on whether buyer or seller is strong

3. As of now, 5800 is the support and the 6000 is the resistance. Below 5800 there are good supports at 5700 & 5600

4. PCR dipped on Friday from 1.32 to 1.26 - but these are still much higher numbers than what we saw in last few days of Nov expiry (around 0.97-1.08)

Nifty Futures:

2.49Cr OI down 3.87% (10L shares cut)

Banknifty Futures:

14L OI flat

Nifty correlated to EURO?