The Tug-of-War: Conviction vs. Momentum

The challenge of adhering to a specific market outlook intensifies dramatically when significant momentum develops against it. This momentum can be so persuasive that it convinces a broad market of an impending trend change. However, in this scenario, the weakening of that momentum typically precedes a swift and decisive return to the dominant trend, often trapping those who chased the temporary move. The initial strong force then reverses direction with comparable power. In these circumstances, the most effective approach for traders is to respect the current momentum as long as it endures and to execute trade adjustments without delay once key support or resistance levels are violated. Strategies like buying on weakness or selling on strength tend to be unreliable during such momentum-driven periods, adding to the inherent risk. This is precisely why I’ve been advocating for operating with lower trading volumes than usual since the beginning of April.”

Looking at the Indian markets since the April 7th swing low, my analysis of the Nifty index has been predicated on the resilience of key support levels, maintaining a bullish outlook. The fact that these supports have held has validated this perspective, driving the market’s upward trajectory until now. Currently, with the Nifty spot index hovering near a critical juncture, the 23,800 level remains a significant support to watch on a closing basis. Should this level be decisively breached, it would necessitate a reassessment of the bullish thesis and open the door for a potential reversal. My broader expectation for the Nifty to revisit the 21,500 zone by June 18th remains, but this hinges on the breakdown of the aforementioned support. Therefore, while the potential downside target is in view, the immediate focus is on the integrity of 23,800. Until that breaks, the bullish bias persists, albeit with increasing caution. Moving forward, a step-by-step evaluation of price action around this crucial level will dictate the next course of action. Let’s observe closely.”

Frankly, my focus has been more on the Nifty Bank than the Nifty itself. For me, the bounce in banking stocks presented an ideal opportunity to initiate a medium-term short position, particularly in private sector banks. However, the subsequent rally significantly exceeded my most optimistic expectations. A fresh all-time high was an outcome I hadn’t anticipated, but such market surprises do occur, and we must acknowledge them. Consequently, despite this unexpected new high, I maintained my primary bearish outlook. Therefore, the key development this week, following Monday’s gap up, was the speed at which the index filled that gap. Had the gap persisted for several more sessions, it might have suggested emerging medium-term bullish possibilities. However, the gap was closed in yesterday’s session, which immediately negated any potential for a medium-term bullish scenario in my view.”

Navigating the Near-Term: Analyzing Resistance and Support for NIFTY and Bank NIFTY

https://ganninsides.com/2025/04/24/the-session-ahead-watching-key-levels-for-nifty-and-bank-nifty/

“Considering the short-term horizon, my update from last Thursday afternoon indicated that the NIFTY index is nearing a significant high, likely around the 24400 mark on the spot. While this potential peak is in view, the integrity of crucial support levels necessitates a cautious approach, refraining from premature conclusions. The zone between 23800 and 24000 on a closing basis stands out as a pivotal support area. Friday’s trading session proved particularly insightful, as we observed a turning point from the 24365 high. However, for a definitive bearish reversal to be signaled, the NIFTY must decisively close below the 23800 threshold. A break below this level would likely pave the way for a downward trajectory towards 23350, with a further target around 22900 in the subsequent trading days. Conversely, as long as the 23800 support holds firm, the current market posture remains stable. From a time cycle perspective, Friday’s intraday low also carries considerable significance. Looking ahead, the immediate date to watch is May 2nd, followed by a potentially volatile period spanning from May 8th to May 14th, which warrants particularly close attention.”

“The aforementioned dates will be critical for Nifty Bank as well. On the price front, ₹54000 on a closing basis is going to be a critical support level. Once this level breaks, we should see a decline towards ₹52000 on the cash market, and the most significant decline for the Nifty Bank index would occur below ₹52000. Let’s see.”

“Shifting our focus to the S&P 500, we find it currently poised at a particularly interesting inflection point. As I elaborated in a post shared on April 10th, this is a situation worth close observation.”

https://ganninsides.com/2025/04/10/illusions-fade-but-the-ground-remains/

“My analysis focused intently on the S&P 500’s intraday peak of 5481 reached on April 9th. This level initially acted as a significant ceiling, triggering a sharp retracement down to 5100 by April 21st, a date that also aligned with a key cyclical turning point. Following this test of the 5100 low, the index staged a robust recovery, decisively breaking above the prior April 9th high of 5481. Concurrently, the CBOE VIX has receded below the critical 25 threshold. Consequently, the period of heightened volatility following the early April sell-off appears to be subsiding, a stabilization that was crucial. This sequence of events now suggests a potential shift in momentum, prompting us to anticipate the next downward move, one that is likely to retest the recent lows, ultimately breach them, and extend considerably further.”

“The eventual culmination of this upward movement shouldn’t present a major obstacle. My analysis from April 10th pinpointed the 5600 to 5650 range as a likely objective, contingent upon the breach of the 5481 mark. “The unfolding price action will be telling us whether the anticipated downward movement will indeed materialize as expected, following the culmination of the current rally and the potential tagging of the 5600-5650 target zone. Specifically, it will reveal if the recent stabilization is a temporary pause before a resumption of the decline, potentially leading to a retest and subsequent breach of the recent lows, thus validating the bearish outlook.”

“Shifting our focus to the timing, key cyclical turning points are anticipated around April 30th and May 1st. Moreover, the broader window spanning May 8th to May 14th suggests a high probability of noteworthy developments impacting market participants. The unfolding dynamics within this timeframe warrant close scrutiny.”

Ultimately, the unfolding price action will validate or challenge the anticipated scenarios outlined for both the S&P 500 and the NIFTY. Our analytical framework, emphasizing key support and resistance levels alongside cyclical turning points, provides a roadmap for navigating the complexities of the coming weeks, demanding vigilance and adaptability.”

“There are decades where nothing happens; and there are weeks where decades happen.”

Time unfolds in a compelling duality: the vast expanse of years that can pass with a deceptive tranquility, entire decades slipping by in a quiet hum of seemingly unbroken routine, where the currents of change flow so subtly as to be almost imperceptible, leaving behind a faint echo and a sense of continuity bordering on stagnation, like a slow, predictable river. Yet, sharply contrasting this are those extraordinary, compressed moments, intense and pivotal weeks – often unforeseen – where the very fabric of existence seems to warp and reconfigure itself. In these concentrated bursts, the accumulation of events, the confluence of forces, and the sheer weight of consequence create an accelerated history, with changes so rapid and their implications so far-reaching that they imprint themselves upon our understanding of the world and etch themselves into the collective memory with the profound significance and transformative power typically associated with the slow, gradual evolution of generations.”

“What a truly jarring week it was for U.S. markets! The unprecedented and frankly breathtaking decline of over 10% sent shockwaves through the financial world. This kind of sharp downturn is a genuinely rare event, marking only the third such instance since the tumultuous 2008 financial crisis. And for those who entered the markets in the optimistic period following the COVID crash of 2020, this sudden and significant drop represents their harsh introduction to a true bear market. The comfortable gains they may have become accustomed to have evaporated, and investors, particularly these newer ones, are likely facing a period of considerable anxiety and, yes, very, very painful losses in the coming months.”

https://ganninsides.com/2025/02/15/decoding-market-dynamics-a-transformative-week-for-nifty-nifty-bank-and-the-sp-500/

“Looking back to mid-February now, it’s quite something to recall sharing a post outlining a potential cycle peak for the S&P 500 within the 6144 to 6219 level on the cash index. And with an almost eerie precision, the market obliged, topping out at 6147 on February 19th. Mark my words – that seemingly innocuous high of 6147 will, I believe, be etched into the memories of market participants for a very, very long time. It marked a significant turning point, a subtle yet crucial peak before the tides dramatically shifted.”

“Having anticipated a significant decline following that peak, I projected the index would drop towards the 5410 and 5119 levels. Remarkably, we did indeed reach these targets. While I initially expected this move to unfold over a slightly longer timeframe, the market witnessed a significant wave of liquidation, particularly after the tariffs announcement. Even without that specific news, I believe the market’s underlying technicals were pointing towards a downturn. However, this sharp and swift decline has injected extreme volatility into the overall technical setup. It’s crucial to remember that some of the most powerful rallies often occur within bear market conditions. Therefore, we should anticipate a sharp bounce in the coming days, which will likely be followed by a resumption of the downtrend.”

“Of course, these significant market shifts won’t materialize overnight; they will naturally take some time to fully play out. However, as professional traders, our approach to all trades from this juncture must be with slightly reduced volumes. These are indeed rare and highly volatile market conditions, and we need to exercise prudence to avoid aggressive positioning that could lead to regret later. As long as the CBOE VIX remains elevated above 25, we should not expect a return to market stability or ‘sanity.’ In these circumstances, even a single tactical error could potentially lead to a complete exit from the game. It’s crucial to recognize that this market environment is significantly different from the relatively calmer conditions we’ve become accustomed to over the past five years.”

“My near-term analysis suggests that the S&P 500 is likely to find a footing within the 4850 to 4950 support zone. Coupled with the important time cycle dates falling around April 9th, 14th, and 21st, these factors increase the probability of a significant short-term bounce. Savvy traders will be watching these levels and dates closely, potentially looking for opportunities to capitalize on this upward move. However, it’s absolutely crucial to approach this bounce with caution and a clear exit strategy. Given my broader expectation for levels below 4200 in the coming months, this rally should be viewed primarily as a counter-trend move. Therefore, any long positions taken during this bounce should be managed with tight stops, and traders should be prepared to reduce exposure or even consider establishing short positions as the rally begins to show signs of exhaustion. The key is to use this bounce strategically to position for the anticipated continuation of the downtrend, rather than getting caught up in what is likely to be a temporary reprieve.”

India’s Resilience Amidst Global Market Turbulence: A Closer Look

“Turning our attention to the Indian markets, the situation is notably less severe compared to the turbulence we’ve observed in the U.S. As of Friday’s close, the India VIX remained below 14. Remarkably, even despite Friday’s sell-off, the VIX barely registered a significant upward movement. Observing this level of complacency leading up to Thursday’s close, my view was that as long as Tuesday’s intraday low held, there was a reasonable possibility that the NIFTY could have retested the 23600 level before resuming its downward trajectory. However, the sharp sell-off in the S&P 500 on Thursday evening had a cascading effect. On Friday morning, the NIFTY broke decisively below its Tuesday intraday low of 23136, and that immediately negated any near-term upside potential I had been considering.”

“During the second half of March, I frequently provided updates on the NIFTY, and I’m sharing a couple of those updates below.”

https://ganninsides.com/2025/03/18/nifty-resistance-support-and-time-based-analysis/

“On March 18th, I shared a post with all my subscribers in which I highlighted three very important time cycle dates: March 24th, April 4th, and April 7th.”

“The fact that the NIFTY topped out on March 25th, just a day after my identified time cycle date of March 24th, underscores the accuracy and potential predictive power of these cyclical tools. It reinforces the idea that late March was a pivotal period for the Indian market. Now, we need to carefully analyze the market’s behavior around the April 4th time cycle, which we already know brought significant volatility, and the upcoming April 7th date. Will these dates also align with important market shifts, further validating the significance of these time cycles in our analysis?”

https://ganninsides.com/2025/03/21/nifty-short-term-gains-long-term-concerns/https://ganninsides.com/2025/03/21/nifty-short-term-gains-long-term-concerns/

“So, the NIFTY’s high on March 25th reached 23869. This is remarkably close to the 23800 level I highlighted in my post on March 21st as a potential upside target before a move lower. This near-perfect alignment significantly reinforces the validity of that particular analysis and the methodologies employed to identify that potential resistance zone. It suggests that the NIFTY did indeed test the upper end of the expected range before the bearish sentiment took hold, leading to the subsequent decline we’ve observed.”

“Looking at the immediate short term, the opening on Monday morning will be crucial. Setting aside futures considerations for now, critical support on the spot NIFTY lies within the 22300 to 22500 range. Should the index fail to hold this 22300 level, we should anticipate a new low for 2025, breaking below the March low of 21964. I held a strong conviction that 21964 was unlikely to be a significant bottom, a rationale I explained on March 13th. While many of my subscribers disagreed with this view at the time, the current price action lends credence to that perspective. If 22300 is breached, the NIFTY is likely to head towards the 21300 level on the spot index. Regarding the time aspect, following the April 7th cycle date, the next important time cycle dates to watch will be around April 15th and April 21st.”

“Therefore, while we watch for potential footing in the S&P 500 and critical support levels in the NIFTY alongside key time cycle dates, my overall analysis continues to point towards lower levels in the months ahead. Treat any short-term rallies as counter-trend moves, manage your risk meticulously, and use these opportunities to strategically position for the expected continuation of the downtrend. Thank you for considering my analysis.”

“Are we on the verge of a significant market shift?  My analysis of the NIFTY, NIFTY Bank, and S&P 500 suggests we might be.  Today, we’ll explore the confluence of factors that lead me to this conclusion, including key price levels, time cycles, and potential trading strategies.”

A lower low on Friday for the NIFTY, below the January low of 22,786, is a strong indication of further weakness going forward.  This maintains the current setup for the NIFTY index as a “sell on every rise,” which has been the strategy for the past few months.  For the short term, a daily close below 22,786 on the spot market would be even more compelling. Resistance on the upside would be at 23,300 to 23,400, and support on the downside would be at 22,550 and 22,150, with further support below that at the 21,700 mark.”

Interestingly, since the initial low of 23,264 registered on November 20, 2024, the NIFTY market has held around the 23,200 zone for nearly three months. This type of holding pattern, characterized by frequent lower lows, often culminates in a capitulation event.  I’ve anticipated a test of the 21,700 zone for the past three months, so we shall see what unfolds.”

From a time cycle perspective, February 17th holds significance for the NIFTY index, while February 20th looms as a particularly crucial pressure date for the banking sector, specifically the NIFTY Bank index and most individual bank stocks.  Market participants should pay close attention to the price action around these dates, especially February 20th, as it could signal a significant shift in market sentiment and direction for both the banks and the broader market.  The confluence of these time cycles warrants careful observation and analysis.”

Looking beyond the NIFTY and NIFTY Bank, next week also carries significant weight from a time cycle perspective for the S&P 500.  This confluence of potential turning points across major global indices suggests a potentially volatile period ahead. Let’s delve briefly into the factors contributing to the S&P 500’s time cycle significance next week.”

“While many dismiss the study of market cycles as mere speculation, I believe it offers a powerful lens through which to understand market dynamics. The S&P 500, in its intricate movements, provides a compelling case study.  Like a complex orchestra, with each instrument representing a different market force, the S&P 500 is approaching a powerful climax. My cyclical analysis, based on time and price cycles, suggests we’re about to witness a significant turning point, a potential market peak that could signal a significant shift in the overall composition and define the market’s trajectory for months to come.”

The S&P 500, while notoriously difficult to analyze, offers a masterclass in market behavior for those studying time and price cycles.  Its complex interplay of forces makes it a challenging but rewarding subject of study.  I’ve been tracking this index meticulously, recognizing the valuable insights it provides.  The current market structure and unfolding price action are particularly compelling from a cyclical perspective.  Anyone serious about understanding market rhythms and forecasting potential turning points should dedicate close attention to the S&P 500, especially in the coming sessions.  The lessons learned could prove invaluable.”

I’ve been anticipating a significant turning point for the S&P 500, and the January 24th date, marking a significant price and time square, reinforced that expectation.  The ensuing reversal from the 6128 high was certainly compelling.  While the index has rebounded and approached that peak again, the character of this recovery raises concerns.  Technically, the current move lacks the robust bullish characteristics typically associated with a sustained uptrend.  This divergence between price action and underlying strength warrants a cautious outlook.”

My analysis continues to point towards an impending significant peak in the S&P 500.  While a move above the 6128 level is possible, potentially leading to a topping zone between 6144 and 6219, I believe this represents a final, albeit potentially extended, exhaustion of the current bull market cycle.  If my calculations are accurate, this upcoming top will mark the culmination of this bull phase.  The market’s behavior in the coming sessions will be crucial in confirming this outlook.”

From a time cycle perspective, next week, specifically February 18th and 21st, are important turn dates to watch.”

In summary, the upcoming week promises to be a particularly eventful and potentially transformative period for both Indian and global financial markets.  With significant time cycles converging and key price levels in focus, traders and investors should be prepared for heightened volatility and the possibility of significant market shifts.  The confluence of factors affecting the NIFTY, NIFTY Bank, S&P 500, and other key indices makes this a week to watch very closely.”