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Wednesday, 30 May 2012

Funds Flow Analysis (FFA): 30 May 2012, Wednesday, 3.46pm Singapore Time

Big hands1 dumped all their longs of yesterday in Asia today, not only that, they added shorts in addition to all this massive dump in indices contracts today. Strength-index in indices holdings decreased from +4.98 to +0.91 now. Big dump in one day with large volatility. Puts on hand further increased from the already large -4.42 to the even larger -5.90; one day's index contracts massive longs from yesterday are all dumped with some piling up of shorts on top of the dumping. This caused much selling pressures in Asia. Their huge stockpile of puts on hand accumulated over the weeks are now even more deeper in the green (in-the-money) due to the crazy volatility down today. So the reason for huge puts accumulated over the weeks are now clear. Using indexes to profits on Puts for Big Hands1. The little loss in index contracts are little compared to the plunge to give the higher beta Puts even way more profits.

Meanwhile, the shorts in index contracts of the more powerful big hands2 are deep in the money although they had reduced rate of adding shorts as per mentioned on Monday. Their shorts on stocks are also very much in the money. If Big Hands2 start to cover soon and stop shorting, it would be the true bottoming out in short term. However, this must happen in BOTH stocks and indexes in order for a true bottoming out for the longer time frame of short term or mid term (and not solely for immediate term).

Note: Big Hands1 refer to a specific powerful large group of big hands and Big Hands2 refer to another similar profile group of foreign funds/hot money elsewhere. Big hands are the real market movers. Together with Big Hands3, also elsewhere, their actions are significant because they are hot monies/market moving monies. They are the foreign funds and the big whales, related to one another, and they operate in mainly Asia/Asia-Pacific, US and Europe. All 3 large financial markets are inter-related: Asian market movements, US market movments and European market movements, as finacial markets are closely linked in the modern globalised world. Asian markets' BB actions during the Asian trading day is often a prelude to certain movements in Europe and US in Asia/Asia-Pacific night hours.

Donovan's Funds Flow Analysis
Strength-Index Scale Key:
negative (-ve) = shorting power;
positive (+ve) = longing power;
0:  No shorts and no longs (directionless)
1-2: Weak strength (trying to have a direction)
3-4: Moderate strength (some direction is building up)
5-6: Strong strength (strong attacking directional power is building up)
7-8:Very strong strength (very strong attacking directional power is building up)
9-10::  Rally Mode in store / Plunging Mode in store

Donovan's Funds Flow Analysis Index Oscillator: -10 ----- 0 ------+10

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