Messages

Trading levels 3rd / 7th September 2012




Yesterday, Mr Bernanke announced his intention for providing further STIMULUS without getting into any specifics. Market seems to be happy with this intent as the US markets moved up by nearly 1 % immediately after the announcement.

Now we have to wait for ECB announcement from Mr Draghi by middle of next week.

I feel that nearly 80 % of the positive impact of the possible ECB announcement is already factored in the current global market levels and there is not much upside which can be expected from where we are now. However, if Mr Draghi disappoints – as he did last time – we may have a 2 to 3 % cut immediately followed by another 3 to 4 % cut in the coming days / weeks.

Only NASDAQ COMPOSITE and AUSTRALIAN index have still not given indications of a possible down side… all other big indices including S&P … which was holding firm till last week … have thrown in the towel.

Back home, our PM’s statement about infamous COAL-GATE probably raised more questions than it clarified. The main opposition party BJP is not budging an inch and now it seems all out war between Congress and BJP.

Result is that all legislative actions are now postponed to winter session of the Parliament. Some executive actions can be taken in the intervening period but the government has to show considerable POLITICAL WILL to act.

Selling ATM calls would have given you some money last week as well. You may continue with that strategy with suitable stop-loss as this is still the first week of the new settlement.

FIIs continue to buy … although in small quantities …. that has not allowed markets to sag. But the drift which has started last week will gather momentum if there is no big bang announcements from ECB.

i hope u hv been reading my weekly take which is posted every monday on www.sumamura.com under messages tab ..... i hv been saying - for last two weeks - that risk/ reward is favourable on the short side .... and you hv seen what has happened .....

next 4/5 trading sessions are very crucial  ... as nifty makes a decisive 100/150 points move on either side .... so better to trade in options than naked futures ......

cheerssssssssss .......

Trading levels 27th / 31st August 2012



I continue to hold my view that most world markets are making topping out patterns on weekly charts and risk / reward is in favour of shorting these markets. Joker in the pack is FED / ECB announcement about huge liquidity infusion in short period of time.

Markets have run up on the hope of monetary easing by ECB as well as FED. If that does not happen in next couple of weeks …. All these markets will correct 5 to 7 % or even more in max 2 weeks time. DOW has given the indication last week itself. S&P and NASDAQ have managed to hold on due to extremely strong performance by APPLE.

If FED / ECB act as expected there could be 3 max 4 % upside. So … YOU CAN TAKE YOUR OWN CALL.

CAG report has taken its toll as Loksabha did not function at all whole of last week and indications are that whole monsoon session will be a wash-out as congress will not allow PM to resign and BJP will not relent.

Selling ATM calls would have given you some money last week. You may continue with that strategy.

FIIs continue to buy … although in small quantities …. that has not allowed markets to sag. But the drift will come sooner than expected if there are no big bang announcements from FED or ECB.

Trading levels 20th / 24th August 2012



As I look at weekly charts of major global markets …. Most of them are making topping out patterns. What does that mean ??
It means there is risk / reward ratio in favour of going short on the markets …. INCLUDING OUR MARKET.

Markets have run up on the hope of monetary easing by ECB as well as FED. If that does not happen in next couple of weeks …. All these markets will correct 5 to 7 % in max 2 weeks time.

If FED / ECB act as expected there could be 3 max 4 % upside. So … YOU CAN TAKE YOUR OWN CALL.

As regards to our market … CAG report is a ticking time bomb and that will keep market under constant pressure.PMO is trying to rubbish it by taking a harsh line against the functioning of CAG itself which is a constitutional body and that is like playing with fire.

I will strongly suggest hedging your portfolios by buying JUST OUT OF THE MONEY puts or by selling AT THE MONEY CALLS. Choice is yours.

I expect markets to drift lower towards 5250/5300 in coming two weeks unless there r huge dollops of FII inflow.

Trading levels 30th July / 3rd August 2012

Last week’s hero was Mr Mario Draghi of ECB. He made a very emphatic statement on Thursday afternoon that ECB WILL DO EVERYTHING IN ITS CAPACITY FOR SURVIVAL OF EURO and this sparked a massive all round rally in all developed markets. US markets simply took off and may continue to hold this gain till Wednesday / Thursday outcome of FOMC and ECB meets respectively.

Unfortunately, we have our own problems to deal with which meant that our markets reacted on Friday and gave away 50 % of the gains. We will again open gap-up on Monday but maintaining those gains may not be easy as the monsoon session is approaching fast and the government has done hardly anything that they promised to do after the presidential elections.

FOMC meet may not come up with QE III and that may disappoint the world markets so book your longs before we close on Wednesday.

Fortunately, NCP / CONGRSS rift turned out to be a storm in a tea cup. It seems Mr Pawar is following in the footsteps of his mentor Mr chavan who also always had safety first approach.

So, next week is going to be a very tumultuous weekwith everything hinging on FOMC / ECB.