Market Outlook - Short Term

Difficult to predict market direction

Posted by : Udayan Mukherjee

The world keeps changing every night and we come back with a completely fresh perspective - so much has changed since the markets closed last evening or yesterday afternoon. The Participatory-note (P-note) regulations have changed; the Reserve Bank of India (RBI) has surprisingly cut cash reserve ratio (CRR), global markets continue to tumble though Asia is weathering it a little bit better this morning. So global turmoil, lots of policy changes - it will all go into the melting pot today, who knows what will win; policy action or global turmoil.

On global markets:
These are difficult times, unprecedented times in the global markets and therefore the kind of action that we are seeing is also quite unprecedented. Things are very fluid at this point in time. You do not know what the market will react to this morning, it could easily snap back because of the concerted regulatory action, which is happening or it could continue to drift down along with global markets. So it is a tough call.

We are seeing history unfold in front of our eyes. This is something that we do not see in a decade or a couple of decades, the kind of action that we are seeing in global markets and the way regulators across the world are forced to respond to it to at least keep the patient alive. There is absolutely history unfolding and therefore the less you take in terms of big directional calls in the market, the better because we have no clue of where the situation might land us in finally. It is tough times and absolutely historic times for financial markets around us.

For many markets, it is almost like the hemorrhaging right now?

It is and I suspect that will continue because this is not about small interest rate change and it is not about throwing a little bit money at the system or anything like that. We are probably hurtling towards the global recession not just the US recession at this point in time and the kind of economic distress, which might unfold over the next few quarters, is making everybody very nervous and justifiably so.

So right now you don’t want to get into that, okay inflation at 11.99 so we are fine, Cash reserve Ratio (CRR) down more 50-bps, so we are fine or to get extremely bearish between points and say now the market will go to 8,000 Sensex and the Dow will plunge to 5,000. None of us know what is going to happen. Could any of us have predicted the events that have unfolded in the last 4-5 weeks? The biggest analyst in the world couldn’t have seen of what is going to happen.

We are in unprecedented times and none of us know how things will shape up over the next few weeks and months. It is best to say I don’t understand what is going on; it’s beyond my comprehension completely. I don’t want to stick money into assets and all right now, if I could I would dig it under the ground and sit on it since I can’t do that I just need to be in cash at this point and not be brave trying to fool myself by thinking that I am the best analyst in the world who knows exactly how this thing will pan out. When in doubt just keep your money under the mattress that is always worked in history and that is going to work right now.

Asian Indices:

Asia is okay this morning it is not such a bad picture the Nikkei is down about 2%, Straits Times is actually up 1.5%, China is down 1.5%, so mixed bag but no great sell-off as you have seen across the US market things are little bit calmer out here though they started negatively, the most Asian markets seem to have come-off the morning’s lows.

It’s almost like a vortex situation everyday?

It is and the way things are now capitulating in the West is quite alarming because yesterday Europe was down 8-9% apiece. I do not remember in my memory when European markets fell 8-9% a day, Russia was down 19%. These are indices for large markets which are falling 18-19% a day; it’s not a single midcap stock. So it’s very scary, but the pace at which these markets are falling right now lead you to believe that for the near-term you are probably headed to another intermediate bottom because things do not fall 20% a day for very long. So its getting completely overdone right now, you are seeing the absolute peak of panic, it could last for a day or two sure or maybe in the next 48 hours you will probably see a spike back in the global markets. I know not the best morning to suggest that but it inevitably happens when market falls 7-8% a day.

-Udayan Mukherjee, Managing Editor,CNBC TV18

The End of Wall Street

Posted by : sambala

Dow drops 200 points, as enthusiasm about the Fed`s plan to loosen up credit fades.

The End of Wall Street

Posted by : sambala

NEW YORK, Oct 7 (Reuters) - U.S. stocks briefly turned negative on Tuesday, weighed down by financial shares, as disappointment about the absence of coordinated rate cuts by central banks tempered optimism about a Federal Reserve plan to strengthen the commercial paper market.

The Dow Jones industrial average .DJI was down 41.50 points, or 0.42 percent, at 9,914.00. The Standard & Poor`s 500 Index .SPX was down 4.81 points, or 0.46 percent, at 1,052.08. The Nasdaq Composite Index .IXIC was down 13.13 points, or 0.70 percent, at 1,849.83.

Investors had bet that after Monday`s slide in global equity markets, central banks might mount a coordinated response to calm jittery investors.

Bank of America fell more than 16 percent a day after it announced a plan to raise as much as $10 billion to shore up its capital. The bank also slashed its dividend and posted a slide in quarterly profit in a surprise announcement.

WILL NIFTY HIT 3600 & SENSEX TOUCH 12000

Posted by : BullSheetRules

Dear vam_aru,

That totally depend on those BIG PLAYers! Let us hope that FIIs do not go for MAD / Panic SELLing to generate that liquidity! Else we will that Capitulation behaviour coming from those FIIs! :) If those FIIs are ready to go for Capitulation behaviour, Let us use their Billion of DOllars to make Money for FREE! :) Index can be taken up lator on once their MAD SELLing is over! :)

Figure of 9800 on DOW corresponds to 3450 on Nifty!

So, let us hope for the best! Let us hope that those BIG PLAYers continue to PLAY the GAME Sensibly!

Gud luk & happy investing !:)

Will NIFTY Hit 3000 & SENSEX Touch 9800???

Posted by : Tarmac

HLN
This should be the new thread name instead of Will NIFTY Hit 3600 & Sensex Touch 12000.
Rgds
Tarmac

WILL NIFTY HIT 3600 & SENSEX TOUCH 12000

Posted by : vam_aru

Dear BSR,

Do you see NIFTY will take a support at 3400 ? DOW is rolling down again, so we might be falling again tomorrow,Even today from 3.6 % up we gone down to 2 % and closed flat...

WILL NIFTY HIT 3600 & SENSEX TOUCH 12000

Posted by : BullSheetRules

Another BS point: In the latest interview with RBI governer, it seems that those BS experts on CNBC tv were trying to put more pressure on RBI governor to reduce that INR ratio in the light of those FIIs SELLing! This way, those FIIs will make FREE money!

Now BS rumours through media are being spread that FM RBI or SEBI are not interested to save SENSEX from lower values for the benefits of investors!

Comeon.. if those FIIs will not stop their MAD SELLing, how can you expect SENSEX going into stable zone!

No wonder, those BS experts also got some kind of incentives! :)

Let us hope that DIRTY GAME through those BS experts do not get PLAYed. In the name of RETAIL investors, many ppl have tried to mislead! :) :)

Gud luk & happy investing! :)

WILL NIFTY HIT 3600 & SENSEX TOUCH 12000

Posted by : BullSheetRules

Yes fmcgbites,

With those kind of SELLing from FIIs, RBI is doing a good job on this regard by ensuring that INR go up against USD! :)

If FIIs would like to continue for SELLing like this, then you are right one can expect INR to go above 50. That is the only way to ensure that those FIIs do not just loot money from retail investors here!

In future, if some more FIIS or organsiation will come, then similar kind of appreciation will happen.

Gud luk & happy investing! :)

WILL NIFTY HIT 3600 & SENSEX TOUCH 12000

Posted by : wbuffett001

Dear HLN,
This is my first post to you ever.
I have read many of your posts so far.What you have predicted so many months back has come exactly true today. You definitely deserve utmost praise for this prediction.Please accept my heartfelt congratulations. I can say you know your TA and EWT theory quite well.I suggest you to predict only indices levels in future with very very broad time indications ( + or - three to six months )and not commit on the exact time frame which is most difficult to predict as everyone knows.However even this cannot deflect anything away from the credit you richly deserve. I always feel we have to give credit where it is due and between you & Kalidas , MMB has been served well in the last one year.
Coming to the future , please keep up the good work and give us your broad view on when you expect the U turn in the markets.
Personally I have been investing continously since Oct / Nov 2007 and continue to buy even now. By nature and reasoning , I am a very LT investor who normally holds shares for 3 + years at the minimum.
To be frank I have managed to get a tremendous CAGR in the last ten years ( way way out of normal expectations) by asset swapping across asset classes and sectoral rotations inside the stock markets , long term front running in FII investible sectors.Even as a LT investor , I feel that picking shares at lower index levels can be definitely helpful as this will increase the volume of purchase as well giving a better of margin of safety in price.
I still believe sensex 22000 levels are possible in second half of 2009 and even started a thread to that effect sometime back.Your take will be useful.
regards,
wbuffett001

WILL NIFTY HIT 3600 & SENSEX TOUCH 12000

Posted by : fmcgbites

BullSheetRules,some one here said that fiis is selling to hoard $. few months back $ was at risk of losing global currency on continuous loss and now fiis are hoarding, rs has breached very level with ease, half century mark will be next.

WILL NIFTY HIT 3600 & SENSEX TOUCH 12000

Posted by : vkk43

Unless there are enough retail/MF buyers here in India to absorb full deliveries of FII at current market rates, weakness of the market will continue. Right, sentiment continus to be poor.

WILL NIFTY HIT 3600 & SENSEX TOUCH 12000

Posted by : BullSheetRules

Using some common sense, Even I have been expecting that!

Thank you novice1000 for carifications!

Only thing I see in this GAME is that most FIIs manage to reduce their losses! Instead of doing PANIC SALES by thos FIIS (signs of Capitulations for those FIIs, not for Indian investors), I do not see any other way to make a COMPELTE exit from Indian market! :) :)

For those BS FIIs, Defty inex is already close to 53%. So I would find it strange if those FIIs do not go for Dirt Cheap Selling without makiing any losses!

Let us hope that those BIG PLAYers continue to PLAY the GAME sensibly.

Gud luk & happy investing! :)

SENSEX to rally by 2400 pts in 7 days

Posted by : wbuffett001

Dear Kalidas
I would like to congratulate you on the excellent guidance & vision you have provided to the boarders of MMB in the last one year.I have always believed full credit should be given where it is due and MMB has greatly benefitted by your sterling efforts.
May the good work continue.
regards
wbuffett001