Taming of the BULL-Crash of 21 Jan 2008

[pkjha30]

One month period is hardly any time in Stock market. 50-DMA with respect
to 200-DMA is highly DIVERGENT which unfolds the story itself.

Absolutely.I agree with you. The only point which needs to be found out is how much further downside remains. Since squeeze is building up , the breakout should determine that. If it is on negative side then obviously more pain is left in the system. But FII might tell different story and would indicate at least some pullback.

pk

 

[pkjha30]

Here is FII data for 15/16 dec

15-DEC-2008 -- 1527.00 -- 1633.40 -- (106.40) -- (26.40)

16-DEC-2008 -- 1798.60 -- 1559.20 -- 239.40 --59.30

Total for December -- 18246.00 -- 16064.30 -- 2181.70 -- 540.70

The theme is continuing. Subdued activity by FII but in December overall transaction is positive by Rs 2181 thousand crs. Not a significant amount in view of overall sell position in 2008 at Rs.52555.50 Thousand crores. Yet FII remains invested by Rs 230912.90 thousand crores, overall.

On the other hand DIIs are not showing any rash braveness

01-DEC-2008 ---350.40 --- 425.40 --- (75.00)

02-DEC-2008 --- 145.70 --- 472.50 --- (326.80)

03-DEC-2008 --- 443.00 --- 337.00 --- 106.10

04-DEC-2008 --- 451.60 --- 367.20 --- 84.30

05-DEC-2008 --- 214.70 --- 410.00 --- (195.30)

08-DEC-2008 --- 500.30 --- 774.10 --- (273.70)

10-DEC-2008 --- 698.20 --- 531.30 --- 166.90

11-DEC-2008 --- 517.60 --- 600.30 --- (82.80)

12-DEC-2008 --- 514.20 ---389.80 --- 124.40

15-DEC-2008 --- 690.10 --- 529.60 ---160.50

Total for December -- 4525.80 -- 4837.20 -- (311.40)

One can not help but notice the gap in the trading activity if FII and DII. Naturally FII do have more clout and they only determine the direction.


Whether nifty/sensex will sink or swim, only time will tell. But it appears that fear factor is ruling the roost. Mostly people expect that this is a short term pullback in downtrending market and bottom is not yet reached. Many expect sensex to reach 6000 to 5000 level.Though 7500 is still to be breached.

Not many their wisdom are trying to short now as they are equally fearful. So wait and watch is their policy. Rightly so , for traders risk-reward ratio is too skewed against them right now.

That is the reason why many are lamenting lack of posting from pros on the forum.

Although, economy is showing some signs of impact, but as already pointed out by many in the forum, those factors seems to be taken in to account and inertial force or momentum has taken indices to the other extreme. That means it is going to swing in another direction, if that conjecture is right.

After six years of green candles, sensex will have one big red candle on yearly chart. Before that there were two red candles ( two years) prior to starting six year bull run.

On monthly chart we had four green candles out of twelve.Last one being green.Monthly chart seems to be showing bullish engulfing pattern indicating
change in sentiments. By lack of many negative/positive voices in the forum, one can conclude as much.

On weekly chart , there are 19 red weeks.Now, it seems to be replicating jun ,july 2006 pattern though engulfing pattern is yet at least 6 months away.

However, if downtrend is to continue nifty needs to go down below 2000 over another two year period, which seems difficult in current scenario as economy is what it was not in 2000-2003 bear market(on weekly chart). Time will tell.

Experts in candlestick may look at charts and give comments as I am not the authority on this.

However I feel that for long term that's it.

pk

 

[pkjha30]

Oil prices tumbled below $40 for the first time since the summer of 2004 Wednesday despite an announcement from OPEC of a record production cut of 2.2 million barrels a day.

Markets had already priced in a vastly reduced flow of oil and traders focused instead on troubling economic data that points to a long and severe recession.

Light, sweet crude for January delivery tumbled 8 percent, or $3.54, to settle at $40.06 on the New York Mercantile Exchange. Benchmark crude prices fell as low as $39.88, a price last seen in July 2004.

"There's just so much oil in inventory out there right now," said Michael Lynch, president of Strategic Energy & Economic Research. "Nobody wants to buy this stuff."

Crude prices have fallen so low, producers have leased supertankers to store the oil at sea, hoping that oil will rebound.

U.S. gasoline inventories continued to rise, the government reported, providing further evidence of a major pullback by American motorists.

Demand for gasoline over the four weeks ended Dec. 12 was 2.7 percent lower than a year earlier.

OPEC had already announced cuts totaling 2 million barrels earlier this year, also with little effect. The unprecedented production cuts and the market reaction show just how fast energy demand has fallen during the worst economic downturn in at least a generation.


By CHRIS KAHN
AP Energy Writer

Murali Deora not yet listening.

pk

 

[sudoku1]

Murali Deora not yet listening.

to,
murli deora,

Fill every thought with determination, every step with courage and every word with love...............

with slippery love,
sudoku1.

 

[kkseal]

@pk

All this is news Things that everybody knows Good for chit-chat but no edge there The edge can come only from what one can derive/deduct/project from the news (or better, economic data).

Regards

 

[pkjha30]

@pk

All this is news Things that everybody knows Good for chit-chat but no edge there The edge can come only from what one can derive/deduct/project from the news (or better, economic data).

Regards

For me there is no further projections to be made as till elections market will be in consolidation mode. gyrating between two levels earlier pointed out. Lower boundary has been held and upper boundary will soon kick in.

These data such as lower inflation rate, lower oil price, lower interest rates , better liquidity would have impact on economy in neutralizing the adverse impact of weak sentiments and help in consolidation. Liquidity with banks would exert pressure on banks to lend though for now they are circumspect.On longer term , projection will always be up for India. For shorter term I have not much interest.10-15 % downside from the lows is nothing on longer period.

With Regards Kalyan
pk

 

[kkseal]

@pk

All this is news Things that everybody knows Good for chit-chat but no edge there The edge can come only from what one can derive/deduct/project from the news (or better, economic data).

Regards

Maybe i sounded a little curt here pk, but pls be assured it was not intentional rather a result of posting during mkt hours. Appreciate your writeups as well as the institutional money flow data that you provide.

Hope to discuss more on the subject (I too am nothing more than a learner) during the wkend (if the environment for a meaningful discussion is still there - this has unfortunately become a rarity at TJ)

Point to ponder in the meanwhile

Why hasn't oil moved up despite dollar weakness & prodn cut by producer nations?
Demand slowdown has certainly happened but look at the fall in oil prices from it's peak - highly disproportionate with the 5-7% contraction in global demand So what else may the smart money be factoring in?

Regards

 

[pkjha30]

Maybe i sounded a little curt here pk, but pls be assured it was not intentional rather a result of posting during mkt hours. Appreciate your writeups as well as the institutional money flow data that you provide.

Hope to discuss more on the subject (I too am nothing more than a learner) during the wkend (if the environment for a meaningful discussion is still there - this has unfortunately become a rarity at TJ)

Point to ponder in the meanwhile

Why hasn't oil moved up despite dollar weakness & prodn cut by producer nations?
Demand slowdown has certainly happened but look at the fall in oil prices from it's peak - highly disproportionate with the 5-7% contraction in global demand So what else may the smart money be factoring in?

Regards

LOL I didn't notice that my posting during market hours ( though I hardly noticed that) would have such an impact on market and you. .

Looks like after I posted market has sharply moved up and ended above 10,000. But believe me, I never intended to project minute or day to day movement ever.

However, I will refrain from posting during market hours as it might have depressing impact on bears.

Now coming to your point.

5-7% contraction of global oil demand is way above the OPEC daily cut. Especially when it is coupled with rising inventory in USA which is largest consumer of OIL.

In fact I think rising prices were factor of smart money predicting higher demand and lower production. That purpose is served now so they moved out.Remember that high oil prices had its impact on state spending and GDP growth as more money started flowing out for oil import. Now with lower demand and lower prices, more money would become available in the system over next two qrts.So smart money would now move in to Emerging economy which is still showing 6-8% GDP growth projection. With more money this is going to improve further over next one year. That is the reason we are seeing FIIs moving in ( first time in dec 2008 they are net buyers) when doomsayers are still baying for blood of Bulls .

pk

 

[kkseal]

Wait a second ... think i'm confusing this thread with another one where we have been of late discussing (well, till the usual garbage started pouring in) macros, smart money etc.

Sorry for disrupting this thread of yours pk. Pls carry on like you have been doing.

Regards

 

[sudoku1]

Pahchan to meri B koi nahi .....
Pata nahi Q log mujhe pahchante hai
pyar to mujhe bhi unse bahot hai
pata nahi q unke alawa sab jante hai...........