Market Outlook
Tie breaker - Advantage Bear
The Dow greeted investors Friday morning with news of downgrades and more subprime .The first round of bad news came from across the pond. English mortgage-lender Northern Rock was forced to take out an emergency loan from England\'s central bank. The credit woes continued as Goldman warned of heavy losses in its Global Alpha Fund, the third of its market-neutral hedge funds to suffer amid the recent market turmoil. Merrill Lynch hit Intel & American Express with a downgrade. US retail sales data hinted at a possible slowdown in consumer spending. When all said and done, the Dow edged up 17.64 points after a -100 point start to notch its second consecutive close above the 13,400 level.The S&P 500 finished flat, adding 0.3 point. The Nasdaq finished flat but closed atop the 2,600 level .
Crude lost 99 cents to settle at $79.10 per barrel Gold gave up gains on profit taking to close at 709$ Ditto for base metals.
If you thought Britney\'s out-of-lip-sync, lumbering pantomime at the MTV Video Music Awards was bad, you ain\'t seen nothin\' yet. .,,, read this Merrill Lynch & Co., the biggest underwriter of collateralized debt obligations (CDO\'s) , signaled that the subprime-mortgage crisis may hurt third-quarter earnings. The New York-based firm said in a regulatory filing today that it made ``fair value adjustments\'\' for potential losses to date on unspecified holdings and financing commitments. Merrill provided no estimate for how the changes in fair value will affect earnings. It said ``significant risk remains that could adversely impact these exposures and results of operations. . How the securities industry will value holdings such as CDOs remains one of the biggest concerns. -prices are either unavailable or unreliable. It takes only a second-grade student to see through the lip sync!
China raised its benchmark rate by yet another 25 basis points on Friday making that the 5th rate hike this year.The Swiss National Bank (SNB) surprised the markets with a rate hike of 25 BPS .The FFIP ( Fed Futures index ) is now indicating a strong Fed will cut next week. . However, if Bernanke has the courage and the common sense to make a surprising decision on Tuesday and leaves rates unchanged, carry trades could unravel rapidly as risk aversion remains the yen\'s only friend.
If history and ( Greenspan specifically) has any answers to this global circus it is that central bankers and analysts have been no more accurate than their private-sector brethren in reading the economic tea leaves . For the day , expect the tennis match in global inc to remain subddued ahead of the FED and added newsflow from Europe can spur Mr. Bear towards a victory
The Nikkei is closed today but Asian markets have sunk into red at the time of writing this mail. Tie breaker continues - but Advantage Bear
The week ahead 17th to 21st Sept 2007 Support 15070/4290 Resistance 15715 /4570 . PCR 1.53 . Weekly range maintained 4290/4530 Nifty spot. Weak below / strong above 4500 Nifty spot. Resistance zone 15715/4570.
Fridays engulfing bear and downward-sloping trendlines still loom overhead to thwart future rally attempts even as the indices creep towards a new high - the RSI is trending down . A close below the short term support at 4450 will see extended weakness
The near term trigger for global markets is US Federal Reserve\'s policy meeting on 18 September 2007 followed by the BOJ meet on 19th Sept.. Add to that the recent political nonsense on Samudra Setu and the nuke deal. Stake sale news on IFCI/ Sobha\'s subsidiary/ Rajesh exports will see punter momentum on the counters.
Fridays closing weakness may extend to this mornings open . Most vulnerable on rallies -both brothers and punter favs- Reliance/ FT / Rel Cap / IFCI. The wild card is still the left and the newsflow of advance tax numbers will keep the session choppy.
High Risk/ High Reward
Nifty Sep Fut - Trading Range 4535-4480 . Above 4514 Targets 4535/ Below 4480 Supports 4450. Sell the break of 4480 stop 4514 Target 4453 or Sell rallies stop 4540 target 4490 or lower
Trigger Calls
Mc Dowell Sept fut Buy decline stop 1690 Target 1750 + or Sell the break of 1690 stop 1700 Target 1650 or lower
Tech Mahindra Sept Fut Sell rallies or Sell the break of 1290 stop 1320 target 1250 or lower
APIL Sept Fut Sell the break of 790 stop 800 Target 776 or lower
Short Term Calls
Bombay Dyeing Sept Fut Sell stop 640 Target 596 or lower
Financial Tech Sept Fut Sell stop 2475 Target 2350
IFCI Sept Fut Sell or sell the break of 76 stop 77 Target 72 or lower
