Weekly update:
Global Update- Markets worldwide came under intense selling pressure and recouped some of their losses towards the end of the week. The only market which has clearly shown signs of trend reversal has been the Hang Seng index. Hang Seng should see some relief rally next week before beginning its downward journey again. This market is surely ahead in its correction and other markets are expected to follow this trend in the near term. As far as US markets are concerned, movement remains quite choppy and participation remains extremely low and CBOE VIX has surged quite a bit from its lows. I expect US markets to remain under pressure in the near term and some clarity should emerge in the next couple of weeks.
Coming to our markets. Nifty has shown first signs of a break down this week and will continue to remain weak until it trades below 5400 from here on. In my last week's update I indicated about the importance in watching DII selling closely for a trend reversal. We are almost at the point of a major trend reversal, I say almost because we need some more clarity to figure out whether this is a trend reversal or a correction. Broad movement of Nifty I see in the next few months would be a retest of 5032 and then bouncing back to test 5300, giving a feeling that we are in a bull market without doubt and 5000 would be the base for the next decade, only to come crashing down on extremely high volumes thereafter to breach 5000 and break through all the moving averages and trendlines creating panic selling and taking out all the stoplosses and head much much lower. This remains the high probability according to me out of my experience of over a decade in the market ( sometimes market does its own thing ). Let us see!
EUR/USD- This currency pair hit a multi-week high on Friday, pulling some herd in its direction. I see a major trend reversal happening in the next few weeks, as it is quite close to its top.
Have a good weekend!