Extremely interesting times ahead for the market. We are at a very important inflection point which can change the long term trend of the market. Although market can correct a bit from here, there is still no visible signs of exhaustion. Currency and equity markets are giving out conflicting signals. USD is giving out a screaming buy at current levels. More on this in my week end update.
Starting Monday, how will the market open.? Will the open indicate a trend change.?
Fed tapering euphoria is done. The market’s honeymoon period with RR looks like its over. Scanning the news, we have the below headlines, and it is not hard to guess how the markets will react. The first indication of markets looking negative can be gauged from DOW close which was -1.19% on concerns about failure of budget talks, leading to the Govt. shutdown. (May not happen – but markets are taking a pessimistic view)
Basis US uncertainity, if the Far East markets open negative, we can expect a negative open in our markets as well. The USDINR PAIR WILL GIVE A CLUE OF WHERE THE MARKETS WILL LIKELY HEAD TO. There is the Germany election also to contend with the polls predicting a tight race. While Angela Merkel is likely to win, the market will like to do away with the uncertainity.
The only positive news is the FII investment data : As per CNBC, FII’s invested net 945 crores on Fri. against which DII’s sold net 790 crores. (Not clear as per format if it is Equity or combination of Equity and Debt as used to be displayed earlier. Referring to SEBI's website, it indicates FII net Investment in Equity at 3,558 crores, breakup of which is : Index Futures Rs. 3,010 crores, Index Options Rs. 1,094 crores, Stock Futures -922 crores, Stock Options -64 crores. Balance 440 crores equities? Not explained)
So tomorrow’s close will decide if the tide has turned. Let’s see….
P.S : From the market rumors it seems likely that Janet Yellen will be confirmed in place of Ben Bernanke, and an announcement will be made as soon as 23rd. (Monday)? While Yellen's appointment is discounted by the market - an early appointment can provide a cheer to the Bulls riding the DOW the ripples of which can also be felt in our market.
Headlines :
---------------
Another 0.50% repo hikes in the offing - Times of India, 22nd Sep.
Budget talks - Looming US Govt. shutdown on Oct. 1 – Washington post, 22nd Sep.
DOW down -1.19% - Market Watch, 20th Sep.
Germany election - Steinbrueck Seeks Election Upset. – Bloomberg, 22nd Sep.
Sources :
http://timesofindia.indiatimes.com/...-the-offing-Analysts/articleshow/22888565.cms
http://www.washingtonpost.com/polit...e566b4-221a-11e3-a358-1144dee636dd_story.html
http://www.bloomberg.com/news/2013-...term-as-steinbrueck-seeks-election-upset.html
http://www.marketwatch.com/investing/index/DJIA
http://www.moneycontrol.com/stocks/marketstats/fii_dii_activity/
http://www.sebi.gov.in/sebiweb/investment/FIILatestSE.jsp?period=day
Fed tapering euphoria is done. The market’s honeymoon period with RR looks like its over. Scanning the news, we have the below headlines, and it is not hard to guess how the markets will react. The first indication of markets looking negative can be gauged from DOW close which was -1.19% on concerns about failure of budget talks, leading to the Govt. shutdown. (May not happen – but markets are taking a pessimistic view)
Basis US uncertainity, if the Far East markets open negative, we can expect a negative open in our markets as well. The USDINR PAIR WILL GIVE A CLUE OF WHERE THE MARKETS WILL LIKELY HEAD TO. There is the Germany election also to contend with the polls predicting a tight race. While Angela Merkel is likely to win, the market will like to do away with the uncertainity.
The only positive news is the FII investment data : As per CNBC, FII’s invested net 945 crores on Fri. against which DII’s sold net 790 crores. (Not clear as per format if it is Equity or combination of Equity and Debt as used to be displayed earlier. Referring to SEBI's website, it indicates FII net Investment in Equity at 3,558 crores, breakup of which is : Index Futures Rs. 3,010 crores, Index Options Rs. 1,094 crores, Stock Futures -922 crores, Stock Options -64 crores. Balance 440 crores equities? Not explained)
So tomorrow’s close will decide if the tide has turned. Let’s see….
P.S : From the market rumors it seems likely that Janet Yellen will be confirmed in place of Ben Bernanke, and an announcement will be made as soon as 23rd. (Monday)? While Yellen's appointment is discounted by the market - an early appointment can provide a cheer to the Bulls riding the DOW the ripples of which can also be felt in our market.
Headlines :
---------------
Another 0.50% repo hikes in the offing - Times of India, 22nd Sep.
Budget talks - Looming US Govt. shutdown on Oct. 1 – Washington post, 22nd Sep.
DOW down -1.19% - Market Watch, 20th Sep.
Germany election - Steinbrueck Seeks Election Upset. – Bloomberg, 22nd Sep.
Sources :
http://timesofindia.indiatimes.com/...-the-offing-Analysts/articleshow/22888565.cms
http://www.washingtonpost.com/polit...e566b4-221a-11e3-a358-1144dee636dd_story.html
http://www.bloomberg.com/news/2013-...term-as-steinbrueck-seeks-election-upset.html
http://www.marketwatch.com/investing/index/DJIA
http://www.moneycontrol.com/stocks/marketstats/fii_dii_activity/
http://www.sebi.gov.in/sebiweb/investment/FIILatestSE.jsp?period=day
From SEBI's site it is clear that FIIs have invested nett Rs. 3561.1 Cr in equity & taken almost similar amount positions in F&O. I guess F&O positions are a hedge on their total investments upto date. It could fluctuate a lot depending on how & when their investments were made. Also there is some element of circular trading & manipulation by taking one position in equities & an opposite position in F&O. See http://www.traderji.com/derivatives/89770-how-gap-ups-downs-created-nifty-futures-2.html#post863624 for this.
What I am happy is that RR has turned out to be his own man & not the handimaiden of the Fin. Min. So Chidambaram has a tough time ahead, what with election mode kicking in & Soniaji & her cohorts going into super freebee mode and RR not accomodating his whitewash fixes. No diesel price hike yet. So looks like managing the 4.8% fiscal deficit target will be done only by drastically cutting plan expenditure. Unless the Govt. gets onto fiscal responsibility wagon with a vengance & really really bites the bullet!!
RR will have to increase the Repo rate substantially over the next 1 year. (http://www.traderji.com/derivatives/72776-incisive-nifty-trend-analysis-153.html#post863032). With investment squeeze & worsening fisc more of "aam admi's" investment will get diverted to gold till bank interest starts giving real returns over inflation. That calls for a 4-5% hike in interest rates.
So our economy is on a slow spiral downhill till the elections are over.
What I am happy is that RR has turned out to be his own man & not the handimaiden of the Fin. Min. So Chidambaram has a tough time ahead, what with election mode kicking in & Soniaji & her cohorts going into super freebee mode and RR not accomodating his whitewash fixes. No diesel price hike yet. So looks like managing the 4.8% fiscal deficit target will be done only by drastically cutting plan expenditure. Unless the Govt. gets onto fiscal responsibility wagon with a vengance & really really bites the bullet!!
RR will have to increase the Repo rate substantially over the next 1 year. (http://www.traderji.com/derivatives/72776-incisive-nifty-trend-analysis-153.html#post863032). With investment squeeze & worsening fisc more of "aam admi's" investment will get diverted to gold till bank interest starts giving real returns over inflation. That calls for a 4-5% hike in interest rates.
So our economy is on a slow spiral downhill till the elections are over.
Looking at previous Nifty chart patterns have made some observations. Basically what previous analysis shows that even if we trade negatively tomorrow or for a few days, THERE IS A POSSIBILITY of Nifty breaking near/above its current high of 6,170
Note : Only on No. 1 the break was close to the top and not above.
4, 5 looks similar to 3 & 3A
All these conjunctures are possibilities or probabilities, and not a certainity.
Note : Only on No. 1 the break was close to the top and not above.
4, 5 looks similar to 3 & 3A
All these conjunctures are possibilities or probabilities, and not a certainity.
Important news update :
1. Singapore Nifty down -70 points (We can expect a -ve open)
2. Chinese manufacturing gauge rises to six months high (Absorbing bigger negative impact of DOW close -1.19% Should cheer commodities as well currently trending down)
3. USDINR pair to be watched for further cues.
4. Angela Merkel wins in Germany with better than expected votes - European markets should cheer - should help Nifty recover.
5. As expiry is a few days away - market should not trend down, but be within a range if negative.
(All above is conjuncture. If trading short term, we follow the market, and do not decide what the market will do.)
Source :
http://www.bloomberg.com/news/2013-...uge-rises-to-highest-level-in-six-months.html
http://www.bloomberg.com/news/2013-...osses-leave-ally-unclear-exit-polls-show.html
1. Singapore Nifty down -70 points (We can expect a -ve open)
2. Chinese manufacturing gauge rises to six months high (Absorbing bigger negative impact of DOW close -1.19% Should cheer commodities as well currently trending down)
3. USDINR pair to be watched for further cues.
4. Angela Merkel wins in Germany with better than expected votes - European markets should cheer - should help Nifty recover.
5. As expiry is a few days away - market should not trend down, but be within a range if negative.
(All above is conjuncture. If trading short term, we follow the market, and do not decide what the market will do.)
Source :
http://www.bloomberg.com/news/2013-...uge-rises-to-highest-level-in-six-months.html
http://www.bloomberg.com/news/2013-...osses-leave-ally-unclear-exit-polls-show.html
Market Update:
Nifty: After the stellar run seen over the past one month, we are at an important inflection point. At the moment, the bounce back seen, atleast to me looks impulsive in nature and certainly does not look like an ordinary short covering rally. If my reading on the market is correct, then a test of the recent high as well as the life time high is on the cards(cheerful times in dalal street) and this should be seen within the next couple of months. Will analyse and update as the move plays out since the upcoming move is going to be quite tricky. The move so far has been extremely polarized and going forward I expect broader market to start participating in the rally. Bears need to start exercising extreme caution in shorting the market. It looks like market has started discounting some good news on the economic front. Extremely interestingly poised.
USD/INR- Seems to be stuck in a tight range and in a corrective mode. Best to be left alone until the correction plays out. 58.5 cannot be ruled out in this correction, with strong support seen at 60.75.
Global markets: Most of the markets seem to be trending on the upside. With the US markets having corrected the recent upmove, I expect it to resume its run again with DJIA targeting 16k+. European markets are in a strong uptrend, with select Asian markets participating in the rally.
Picture seems to be quite good and conducive as of now for Dalal street to finally join the party. Lets see what the market has in store.....
PraDa
Nifty: After the stellar run seen over the past one month, we are at an important inflection point. At the moment, the bounce back seen, atleast to me looks impulsive in nature and certainly does not look like an ordinary short covering rally. If my reading on the market is correct, then a test of the recent high as well as the life time high is on the cards(cheerful times in dalal street) and this should be seen within the next couple of months. Will analyse and update as the move plays out since the upcoming move is going to be quite tricky. The move so far has been extremely polarized and going forward I expect broader market to start participating in the rally. Bears need to start exercising extreme caution in shorting the market. It looks like market has started discounting some good news on the economic front. Extremely interestingly poised.
USD/INR- Seems to be stuck in a tight range and in a corrective mode. Best to be left alone until the correction plays out. 58.5 cannot be ruled out in this correction, with strong support seen at 60.75.
Global markets: Most of the markets seem to be trending on the upside. With the US markets having corrected the recent upmove, I expect it to resume its run again with DJIA targeting 16k+. European markets are in a strong uptrend, with select Asian markets participating in the rally.
Picture seems to be quite good and conducive as of now for Dalal street to finally join the party. Lets see what the market has in store.....
PraDa
Just a clarification :
Most of the Investment Mutual Fund/Ulips and all market related investment made around 6000 level... and people are just waiting to get out from the investment made during high level. and such level never ever stays . if its happens it will be beneficial for the entire retail investors and i dont think that people will get benefit from FII trading.
Most of the Investment Mutual Fund/Ulips and all market related investment made around 6000 level... and people are just waiting to get out from the investment made during high level. and such level never ever stays . if its happens it will be beneficial for the entire retail investors and i dont think that people will get benefit from FII trading.
Hi, In my post I've mentioned that we are at a very critical inflection point, which can alter the medium/long term trend of the market which has been down for more than 2.5 years now. Its going to be the final lap of the bull/bear fight that we've seen during this period. The case that I've presented is only my analysis based on high probability theory and investment decisions need to be made with your own judgement. Something is surely cooking fundamentally which you and I don't know and is only known to Mr. Market and which is getting discounted at the moment. Although, plenty of experts are extremely bearish at cmp, market can surely spring up a surprise or two in the next couple of months, Range of the market has seen compression on the downside both price wise and time wise since 2008. The broader market has outperformed extremely well on the downside and any further fall from here will surely make every one doubt/wonder whether some of these good quality companies really exist. With this background in my mind, I would as of now give 50% probability to the fact that market has bottomed out at recent lows. The ongoing correction seen after the recent upsurge is expected to reverse by the second week of October. We need a close above 5930 for the uptrend to gain momentum once again. Expect range bound/whipsawing movement until then. Supports- (5790-5798)- 5752-(5710-5730- crucial area, wherein plenty of MAs converge)- 5680-(5630-5650)-5580.
All the best to your trading...
All the best to your trading...
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