RBI Policy

The Reserve Bank of India is widely expected to cut rates by 25 bps tomorrow. The markets have rallied a bit on this expectation. It remains to be seen if this happens in reality.

Nifty to resume uptrend after Stochastics goes into buy

Nifty is currently correcting and filling the gap that was formed a couple of weeks back. It will resume sharp uptrend after Stochastics gives a Buy signal. MACD is placed in the positive territory even now. A Buy signal will be a good boost at this point.

Chart courtesy: Yahoo Finance

Trading and Investing factors

 Factors for the day

• Dow, Nasdaq and S and P futures moderately up
• Rajoy spells out budget cut details amounting to 65 Billion Euros to fight crisis
• Peter Sauer, BofA executive and ex-Hoops star dies
• Europe markets down on Earnings worries, Asia markets swinging between losses and profits
• Profit warnings from US companies

Today's factors for Trading and Investing

Factors for the Week and Today:

• September Index futures take a hit - DJIA (Dow Jones), S&P, and Nasdaq all down at 4 AM 
• Spain gets ready for a third austerity measure round as the Spanish Prime Minister Mariano Rajoy hints at such a development
• Euro and shares under pressure
• June Quarter Earnings in focus
• Internet blackout on Monday?
• China demand falling (indications from Inflation)
• Emerging markets under hug pressure, big drops

Factors affecting trading today

Global:

• Relief after Greece Election results. Elected party supports bailout and is willing to work with Euro countries. Rallies in some markets. Euro jumps to 1 month high and so does Nikkei.
• Spain and Italy continue to worry
• Fed not seen to take any major action. Bears may seize this chance.
• Gold dips after Greek election news
• Oil (Brent) below day's high
• China home prices drop lower and also deeper
• Indian markets collapsed after advancing after the RBI leaves interest rates unchanged.

Stock Market Bullets December 29, 2011

Stock market highlights for the day:

• Concern over Europe again! Sovereign debt crisis fear.
• Last trading day of the year tomorrow
• 10 year Italian bond yields at dangerous levels (7%)
• Pending sales of existing US homes at 1.5 yr high
• Factory activity grows in US midwest
• Banks and commodity sectors gain
• Initial claims for jobless benefits more than expected
• December payrolls report coming next week
• Amazon falls and affects Nasdaq index.

Stock Market Bullets

Bullets for December 28 2011.

• Asian markets fall in thin trading.
• Mixed economic news in US and Japan
• Oil 101 p/barrel
• Japan industrial output drops, regrowth expected in manufacturing the next two months
• US consumer confidence at a eight month high, home prices fall
• India anti-graft bill passed in the lower house

Trading expected to be lacklustre

Trading on the various exchanges is expected to be low due to the holiday season. Asian stocks traded dull during the day. What may turn the tide is the data that is expected to flow from the US, which may show encouraging signs of a recovery.

Sales numbers are expected to rise. to around $ 470 Billion and the jobless benefit claims are at a recent record low. The house price index and the consumer confidence numbers too are expected to show good numbers.


On the Technical side, the S&P 500 Index has broken through the 200 day moving average after the recent rally.

Dow ends almost flat

The Dow Jones index almost ended flat but there was hope since it was the best week in 3 years on Wall Street.

There was some positive from an important economic indicator - unemployment rate dropped to a 2.5 year low. The street is still wary of the Europe situation though. The S&P 500 is now very near to the 200 day moving average, a technical indicator, that hints at good times to come if breached from the bottom.

Sensex 20000, Nifty 6000 what next?

M Jagadish
Many investors have been left scrambling to get into the markets this time. The market consolidated around 5200 to 5500 for a long time before shooting up without any pause. What could be the real reason?

As we've emphasized many times, we are in a multi-year 3rd wave bull run. Even a couple of thousand point corrections cannot stop the markets. Part of the reason is that overseas investors need to park their money into growth. Secondly, 6000 Nifty is no Mount Everest. When Nifty reaches 40000, 6000 will seem like nothing. Its happened in many markets world-wide, it could happen here. The developed world has seen it happen most recently (the last 50-60 years) even in the US, Japan and others. In any case, the amount of money coming in is in billions, it is still peanuts compared to what money is waiting to be invested.