Getting Ready for the Big One

The Nifty has been trading in a range between 4280 and 4340 for the past three days. [The range was calculated taking the real bodies of the candles for these days].
A 60 point range for the Nifty cannot be sustained for long. This narrow movement will give way to a large explosive move. But before the move takes place, it is difficult to determine the direction of the move.
Here are some pointers.
After reaching 4600+, the Nifty moved into a small range between 4600 to 4500. Eventually, it broke down from this range. A second range developed between 4400 and 4500. This one also broke on the downside. Now, we have a third range. If the Nfity were to move below 4280, we should expect lower levels, maybe 4150.
The other possibility is that of an up move. Traders should go long on a move above 4340. The first resistance is at 4400, then at 4500.
Actionable Ideas:
The range between 4280 and 4340 is some kind of a “dead zone”. Avoid trading inside this zone. Buy above 4340, sell below 4280. It is possible that the market may go through a false breakout / breakdown. It is okay to be stopped out and reverse direction. If you get stopped out for a second time, then step aside since the market may not be willing to reward.

My first post for the day” New math for the Rich” is just below this one. Scroll down and read it. the post is in good humor.

New maths for the Rich

New Maths:
$55 billion is less than the cost of color photocopies.
Bloomberg.com reports that Citibank, the bank that has suffered losses of $55 billion in the subprime crisis is cutting down on color photocopies to keep control on expenses. The Bank also dismissed 14,000 employees in the first half of this year, for the sake of keeping losses down.
Now, I do think that the old maths was better. If citibank had dismissed a few dozen of the greedy, they could be enjoying color photo copies, while the world could be saved from a recession. If….
That’s not all. The financial wizards are really going through hardships. Citibank has also said that business meals must not exceed 50 pounds (Rs 4000/-) per person. Surely, it is the duty of the world to keep these financial big wigs in the style they are expecting. This is almost like socialism! What next ? In these difficult times, the banks will now demand that taxi rides should be pre-approved. Well, this wish has been granted by Deutsch bank which now asks its financial wizards to take approval before taking a taxi.
Thankfully, not all financial brains believe that people are equal. Countrywide, the loan finance company that went bankrupt, paid its CEO, Mozillo, a sum of $110 million as severance pay to ask him to leave the bankrupt company. That’s New Maths.