- Anger, frustration, and confusion are some other emotions in the market apart from fear and greed
- This is how Indian market has corrected over last 5 days
- On the global level, there is the real possibility of a significant US dollar breakout and the unwinding of the US-dollar-funded carry trade. Never rule out breakout of USD index above 89 and what it could do trade dynamics of the world. Dollar index as of now is at 87.93
- US Fed meeting is on Dec 16-17. It would be interesting to see how USD reacts to Fed policy
- Russia is in deep crisis right now. Ruble is depreciating at alarming pace. Russian 10-year government-bond yields now trading at 16.4 percent.
- From History Book: The collapse of hedge-fund Long Term Capital Management was a direct result of the 1998 Russian financial crisis. There is a reason why market is worried right now.
- Coming to Indian market: Nifty is at 100 dma. When Nifty slipped to 100 dma in October 2014, it turned out to be great buying opportunity. Another buying opportunity?
- Technicals do not work in panic conditions. When there is stampede, people look for exit doors, and not for entry doors. Hence, if any analyst says that this level is a strong support level - just know that he is fooling everybody
- Another factor to keep an eye on USDINR. 1 USD = 63.96 INR. After long compression - INR seems to have broken out on side of depreciation.
- The RBI was the only bank outside of North Asia to buy USDs in November, and it is doing so at increasingly higher levels of USD-INR. We believe this is in part because the RBI’s own measure of the INR REER is showing some signs of overvaluation...HSBC
- Strong Dollar will be good news for Indian IT companies. Majority of the frontline now trading near long term moving average. Any hope of rally? HCL Tech just has created a bullish pattern: False Breakdown.
- False Breakdown is a very bullish setup in Bull market. In this setup, market first cracks below the support creating panic and then makes a U turn.
- Never try to catch a falling knife. Here's JP Associates stock chart...do you see any bottom
- What can drive the market down? - Banks...very vulnerable. Will RBI be able to cut rates in current environment. I doubt it. Here's Bank Nifty Chart
- Will defensive buying continue? Will Sun Pharma get institutional interest at 100 dma?
- During times of panic, always keep an eye on strong stocks. One such stock: Bharat Electronics. Problem: Support is very far from current levels
- Some sectors are absolute No No right now like Metals and Real Estate. Both sectors lack fundamental as well as technical support
- Sometimes technical bounces do materialize even in bad market. I covered Care Rating stock as 100 dma bounce play on Dec 09. Well, it worked. Having said that - many other stocks failed in that effort
- India imported $31 billion worth of electronic items in 2013-14; $10.9 billion of this was accounted for by phones. Electronic items are the third most valued category of imports after petroleum products and gold.
- When selling picks up, then it does not matter what the technical are. KPIT broke out and then saw huge selling on Tuesday. Everything fall by the wayside when emotion drives the market
- Every environment creates winner. Example: Utilities ETF in US is doing great because of low interest low inflation environment
- A basic rule of markets is that you can control price or quantity but not both. Since the Bank of Japan is releasing massive quantities of yen into the market, the price of the yen is falling. Here's USDJPY Chart
- It is more important to listen to the market... and not to opinions
- If the markets were certain then there would be no markets. No one can give you a 100% guarantee of what market will do; all we know is what it can do.
Please share your comments on what you think of market observations, market and trading in general
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers