WHO'S GANN             

                            

W. D. Gann  the legendary Financial Prophet in the Early Twenties

To most of the technical analysts and financial traders, the name, William Delbert Gann, is well-known. Gann was one of the greatest traders in the early twenty centuries, who has extremely arcane trading analysis techniques and methods that based on ancient mathematics, geometry and astrology. Yet, as it was never unveiled explicitly, the theory of Gann is admired by most, but grasped by few.   His Methods  According to his followers, the accuracy of W. D. Gann's prediction was up to 85%. His predictions actually were not restricted to financial market, Gann also gave predictions on the election of US President and the beginning and ending of World Wars. Gann claimed that his every forecast was solely based on mathematical principles. With sufficient information, he could forecast the forthcoming events with his cycle theory based on ancient mathematics and geometry. In his mind, the nature of things had not changed, all of the events were based on mathematical principles.   What are the mathematical principles?   W. D. Gann said that the 360 degrees of a circle and the numbers from 1 to 9 were the origin of mathematics. In a circle, there may place a square and a triangle. Outside the circle, we may also construct a square and a triangle. These constructions are in fact the dimensions of the market.  Strange enough? In fact, W. D. Gann believed that the market reversal points (tops and bottoms) were related by the mathematical principles. There are no single market top or bottom cannot be explained by angles and support / resistance levels. In other words, if he was given the time and prices of the historical tops and bottoms of any market, he could utilize the mathematical and geometrical principles to predict futures market turning points. Why were these principles able to be applied to the market trends? W. D. Gann said that he had every proof  from astrology and mathematics!   His Market Predictions  Interesting enough, W. D. Gann lived in the early Twenty Centuries while the economic life of the world was in total chaos. Gann experienced the first World War, the historic stock market crash in 1929, the great depression in the Thirties and the out-break of the World War II. In these years of frustration, conducting investment business was risky, not to mention market predictions.   Since the Twenties, W. D. Gann began to publish annual market forecast reports. These reports provided market forecasts for the whole year to come.  It was nothing new by providing these types of service. The new things were that W. D. Gann actually depicted the market movement of the whole year by providing detailed time and prices of the market reversal points! His annual forecasts were in fact the road maps to wealth. He did not only forecast the market, he also provided forecasts of major social events. Although, he predictions might not be totally correct, his approach turned a new leaf in market forecasting.  Surprisingly, he accurately predicted the stock market crash of the century in 1929 to the date. In his annual forecast published on November 3, 1928, he explicitly predicted that September of 1929 would be the dangerous month. Stock prices would slump on "Black Friday". In fact, the Dow Jones Industrial Average toped out on September 3, 1929 at 386.10. Two months later, the Dow fell to below 200! The bear market brought to the western world the great depression and the Dow eventually bottomed out at only 40.56 in July 1932.   W. D. Gann's Writings  W. D. Gann passed away at 77 on June 14, 1955. He had numerous writings including:   "W. D. Gann Stock Market Course"   "W. D. Gann Commodity Market Course"   "The Truth of the Stock Tape"   "Wall Street Stock Selector"   "Stock Trend Detector"   "45 Years in Wall Street"   "How to Make Profits Trading in Commodities"   "How to Make Profits Trading in Puts and Calls"   "Tunnel Thru' the Air"   "The Magic Words"   Most of his writings are related to investment and trading. "Tunnel Thru' the Air" is however a love story. Gann claimed that the first time you read, it would be a book of love story. The second time you read, it would be a book of parables. The third time you read, it would be a book of market truths!

Data source:- http://www.artoftrading.co.in/

Banks tap RBI for Rs 62,000 cr

Central bank’s repo window sees highest use since the credit crisis

Banks raised nearly Rs 62,000 crore on a net basis today through the two liquidity-adjustment facility (LAF) operations conducted by the Reserve Bank of India to tide over the liquidity crunch.
This is the highest level of net borrowing from RBI since October 31, 2008, when banks raised over Rs 65,000 crore in a day. The huge liquidity support had been sought at the time, as banks were wary of lending to each other at the height of the global financial turmoil and the payment of advance tax in September 2008 had added to the crunch.


WIDENING WINDOW
Date Amount parked via
reverse repo Call
amount

Call
rate
May-21 47,530 139 2.50-3.85
May-24 4,540 12,541 2.50-4.20
May-25 8,890 8,433 2.50-4.20
May-26 5,685 8,879 2.50-4.20
May-28 6,215 352 2.75-4.30
May-31 -3,710 11,362 2.80-5.30
Jun-1 -5,575 9,409 2.90-5.40
Jun-2 -12,775 6,171 2.50-5.40
Jun-3 -8,095 6,456 2.95-5.35
Jun-4 -16,875 393 2.90-5.30
Jun-5 NIL 516 2.90-5.30
Jun-7 -61,920 5,847 2.85-5.40

- Since May 31, banks have availed of funds via the repo route and are net borrowers during the liquidity adjustment facility (LAF) operations
- No LAF operation was conducted on June 5
- Amount in Rs cr, rate in % Source: RBI, Clearing Corporation

But, unlike the days of the financial meltdown, when market players accessed cash at over 20 per cent from the call money market, rates remained in the 2.85-5.40 per cent band and volumes seemed to have stabilised. A dealer said banks were now opting for RBI’s repo window, as rates were marginally lower, at least for some of the banks. Besides, there is uncertainty that banks will be able to get the funds at one go, unlike the repo window.

In the collateralised borrowing and lending obligations (CBLO) space that is also accessed by mutual funds, insurers, bond houses and non-banking finance companies, rates hovered in the 5.25-5.40 per cent band. Volumes were lower at Rs 39,574 crore today as against nearly Rs 45,000 crore since May 21, when the auction for third generation (3g) mobile spectrum ended.

Today, dealers said, banks accessed funds through the central bank’s repo window as they wanted to ensure adequate availability of cash ahead of the reporting fortnight. Typically, banks front-load their borrowings and keep cash in advance.

For the last two weeks, liquidity has tightened due to telecom companies paying nearly Rs 68,000 crore as spectrum fee for 3G services. Liquidity is expected to remain tight as companies have to pay the first installment of advance tax by June 15. “We expect the situation to remain tight this month and even in early July,” said an SBI executive.

Apart from the 3G payments, there is pressure due to foreign institutional investors continuously selling in the Indian markets for the last few days.

As FIIs have been withdrawing rupee from the Indian market to purchase dollars, there is added pressure in the local money market, dealers said. So far, in May and June, overseas investors have sold a net amount of $2 billion (over Rs 9,000 crore) worth of shares. What is expected to add to the liquidity pressure is the auction for broadband wireless access (BWA) spectrum for which companies have already submitted bids in excess of Rs 25,000 crore. The market expects that the government could fetch as much as Rs 40,000 crore. This would mean that the companies will raise funds to meet the payment needs.

While the RBI has announced steps to tide over the crunch, banks said most of them do not need to drop the level of SLR holdings below the 25 per cent level to access additional funds. RBI has allowed a 50 basis point reduction and is also conducting a second LAF. “It is an enabler but at the moment we do not need it,” said a bank chairman. Also, the cash management bills that the government used to raise funds for a short period and the reduction of the treasury bill auction size for June from Rs 37,000 crore to Rs 15,000 crore is expected to have an impact over the next few weeks and will not provide immediate relief to banks.