At the end of March series in a post done here , we had noted a bullish handover into April by Fii’s though they skimmed a lot of profits after that big bull run in March
That handover into April was
a) 53983 index F longs
b) -1729 index F shorts ( obviously reduced all from FEB and a bit more)
c) 57877 Long Calls
d) 790 shorts calls
e) -9501 long puts
f) 70989 short puts.
The long index Futures , the long calls and the short index puts pointed to a bullish mindset for April.
The series incidentally closed at the highs.
Here ‘s a look at what has been carried into the Big Month of May
There is occasional noise in tracking this data on a day to day basis but if you pay attention to the last row highlighted as Series Net change ( which I do religiously every month) you would note that
a) all the long index F mentioned at the top of the post at end march have been covered (-56429 contracts)
b) 12201 index shorts have been covered which leaves them dangerously “more long/ or less short” as a hedge at the start of May. Expect them to address this rapidly in the first week.
c) Most of the long calls from end March have been covered
d) short a small quantity of 7796 calls
e) Long puts in abundance 38484 contracts in the May handover
g) Short puts covered by a huge 78156 contracts.
The difference in the two handovers at the end of the series could not be more starker.
When we learned about Auction Market Theory we keenly followed the movement of smart money or the so called informed hands ( or OTF) to get a picture of what the market was doing .
Looking at the scenario above my mind races to this chart shown below:
Decide for your self which stage we will be heading for next.