Saturday, October 4, 2008

Round and round in a circle.....

0740 hrs: Asia opens red and slips deeper at about 3%. Nikkei down 3.49% and Strait Times down 3.01%.

We start week - someone turns green - we end week. The signal is clear - we are in whirlpool sinking deeper and deeper by the minute. I hope there is no one who doubts that the US is fast slipping deep in a recession. Every bit of data that comes by the day reinforces the same. How will we get out of it? well I really do not see that anyone knows inspite of the claims that all is being done to do the damage control. Why are we or the rest of the markets slipping in red by the day then? well because if for any reason the markets rise - the money will promptly flow out of that market. It is just like a charge that flows from high pressure to low pressure. No so called FII would keep positions in such environment. Infact I feel now even if we were to climb up - we would do with a lot of caution. It is just like the dot com burst - it took a lot of time for the investors to return back to the markets. So much so that I am almost sure of what I am saying - the retail that burnt their hands during that period did not come back to the markets at all. Now whenever the recovery will take place it will be at its own pace.

The world markets now. Asia was red as expected - but the sad part was that we fell more and hard. While Nikkei ended 1.94% down, Hang Seng 2.9% down and Strait Times down 2.81%. On the other hand we were 4.05% down on BSE and 3.35% down on Nifty.The reason was perhaps because we were effected greatly by the europe's negative opening. Like I just said the Europe opened negative/flat with some negative bias. However the news that flowed from US gave hope and Europe climed higher to close at - FTSE at 2.26% up, Dax 2.41% green and Cac 2.96% up. That was a wow. The wow unfortunately ened here as US that had opened green - started to turn down after their mid session and finally ended 1.5% red on DOw, 1.48% red on Nasdaq and S&P down 1.35% down. The reason on bloomberg and yahoo were that the bailout - though a law now - the credit will flow again and banks will resume giving loans. There is a chance home prices may stop falling and the worst was over. This was the reason for the market opening green - but the apprehensions again took the front seat and the housing recovery - one of the most important indicator and initiator of coming out of recession was on everybody mind. Will it work? won't it work? So here we complete the circle of life. Questions, questions and more unanswered questions.

Two days back we had a Harami candle that was a mild signal of reversal. Day before we has another white candle and yesterday we were back to the square one - a tall black candle. Where are we now? well with the Bollinger bands maintaining width, and the candles trailing along the lower edge. The 5 EMA is way below the 20 EMA - recovery will take its time now. The volumes as compared to on last white candle were greater. On MACD the divergence has again increased, red line trailing below blue line. Any time the Mass Index now turns down - it can only signal beginning of of a down trend so no hopes here. RSI is way bearish. not even in the oversold territory to give some respite - but pure bearish. TRIX the so called leading indicator too is bearish. It is only Slow Stochastic that has given a buy signal. Take it with a pinch of salt. Any recovery now will be sold into. The news has to be out of world good to give us a sustained recovery - nothing like that seems to be around the corner.

News -- Tata is out of Singur for good - sorry Bengal better luck - next time after ten years after the treatment you gave Tata. You are now officially below Orissa and Bangladesh in development. The Nuclear deal has not been inked but communists should forget it. Their stand has been vindicated and the deal will go through - Communists will suffer by becoming stooges of China and speaking their language. The 700 billion dollars are now coming as saviour to all the banks down in dumps. Will this be enough? let us wait a bit longer. Crude is slipping - US is slipping - a time will come when the US will continue slipping taking crude even lower than this and we will eventually gain from the falling crude. Crude has been one of the factors that has initiated these bad times on the world economy. It will now not rise in coming times - 70-80$ is my guess in near future. Mind you - the US has enough oil with them to see a few decades through. Weaker rupee cannot continue and rupee will start showing strength soon.

Will post the Pivot data tomorrow.


allvoices

6 comments:

geniusjaggu said...

arre mian,
hadh hogayi,its not fair...to give ur post 5 star rating..LOL..

geniusjaggu said...

atleast make it 10 star...so tat it stands out in terms of excellence..LOL

dr.c.m.singh said...

sirji....is this marketbhavishya guy crazy..or what...nifty 3550 this week and 2800-2900 in few months....is it possible...technicals or fundamentals support such an assumption...anyone who is still sitting on cash ..when should he be fully invested....just your opinion..i know none can be perfect in markets...thanks

c.m

S S Cheema said...

Jaggu: Thanks - you are a sweet heart. Makes my josh go high - though I know that your understanding and reading of the market pulse is much better than mine. Infact you are the pro.
c.m.: there seems to be no bottom and the way the markets in Asia have opened - GOD save us. I do not know who market bhavishaya is or are. They are most probably a syndicate of persons or organisation who feeds us some data or figures. Last year I had tried to do some research - If they give a call for a stock let us say today - then you find that in all the probability the stock would have had higher than usual volumes a day or so prior. SO in all the probability they enter a position and give a call to make a bit more / to get out of the position. They do manipulate their website to prove their point. All in all I have really never made net money following their advice. I gained little and lost more. In the present conditions I can actually predict 3000 on nifty and chances are that we will get away with it.

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