August 2012

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.