I am seeing many eager premature bulls who are itching to go long right now. The following points are to be kept in mind before deciding to go long right now. If you have any more add them in this thread. If there is any dissenting opinion please say it also.
1. First and formost, crude has not shown any signs of cooling off.
2. Indian Government budget is slowly getting out of control. We have not yet seen huge budget deficit and trade deficit, current account deficit etc. right now. But days of seeing them are not far off.
3. FII are selling continuously. On the whole, FII have remained sellers during all these months.
4. Most importantly, keep an eye on Monsoon progress. So far, every one has ignored it. Monsoon has been a failure in major portions of South India this year so far. Though Monsoon season is not over yet, still the situation so far is not encouraging. Some may argue that we are moving away from agriculture and stock markets are not dependent on Monsoon, still keep in mind that lack of sufficient Monsoon rains can prolong the bear market or atleast put off the begining of new bull market.
5. I am reading reviews by some of the leading traders that US is yet to see the worse days. What is being projected as end of agony is only upto the Presidential elections. Full blown horror of their financial wreckage will be revealed only after November Presidential elections.
6. Interest rate in India is inching up. Though originally Government officials were talking about cooling of inflation rate by October November this year, last week they uncannily said that it will take at least one year before the inflation comes down to 6 to 7%. Inflation and higher interest rate are detrimental to bull market.
7. Industrial production is slowing down. Many midcap and small cap companies are finding it tough to raise funds for their proposed/ongoing expansion projects.
8. Last year, top line growth of many industries is mainly due to cost push factors rather than genuine demand factors. Now cost has increased, demand has slowed down and consequently margins have shrunk. We are yet to see first quarterly results for June 2008. Let us see how good it is.
1. First and formost, crude has not shown any signs of cooling off.
2. Indian Government budget is slowly getting out of control. We have not yet seen huge budget deficit and trade deficit, current account deficit etc. right now. But days of seeing them are not far off.
3. FII are selling continuously. On the whole, FII have remained sellers during all these months.
4. Most importantly, keep an eye on Monsoon progress. So far, every one has ignored it. Monsoon has been a failure in major portions of South India this year so far. Though Monsoon season is not over yet, still the situation so far is not encouraging. Some may argue that we are moving away from agriculture and stock markets are not dependent on Monsoon, still keep in mind that lack of sufficient Monsoon rains can prolong the bear market or atleast put off the begining of new bull market.
5. I am reading reviews by some of the leading traders that US is yet to see the worse days. What is being projected as end of agony is only upto the Presidential elections. Full blown horror of their financial wreckage will be revealed only after November Presidential elections.
6. Interest rate in India is inching up. Though originally Government officials were talking about cooling of inflation rate by October November this year, last week they uncannily said that it will take at least one year before the inflation comes down to 6 to 7%. Inflation and higher interest rate are detrimental to bull market.
7. Industrial production is slowing down. Many midcap and small cap companies are finding it tough to raise funds for their proposed/ongoing expansion projects.
8. Last year, top line growth of many industries is mainly due to cost push factors rather than genuine demand factors. Now cost has increased, demand has slowed down and consequently margins have shrunk. We are yet to see first quarterly results for June 2008. Let us see how good it is.