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.