This is getting really interesting with the whole world now divided almost equally between the Bull and the Bear camps. Past two years we have seen people all over having similar views. 2007 was the year of the bulls, whereas 2008 was the peak of bearishness. This year has been a mixed bag for both the camps, and people have often changed their places.
The fight quarter truly belonged to the bears, and they kept sitting tight over the market. It was a classic range bound market between January and March, and Index almost finished flat at the close of the quarter. The second quarter belonged to the bulls with market seeing returns of 15% and 28% in April and May respectively. The bears were left too stunned and circuited to do anything about it.
As we moved into the 3rd quarter, the bulls have done well with momentum with them. However, lately they seems to be running out of the 'good news' fuel at their end. The markets are more than 75% up from their low, and still 33% away from their peak. However, the peak of 2007 was a result of exeberance where the word 'RISK' completely disappeared from the world. Whatever progress we have made over the past years, whereas it may be debated that we are out of depression zone, but certainly we are far far away from the exuberance period as well.
So, I'm turning a little cautious on the markets, and think that over the medium term, 4800 could well turn out to be the pivotal point for the markets. If they are able to cross it by the end of September, I would believe that we would end the year on a high. Else, we may be pulled into the deeper holes of recession once again. This rally is no doubt driven by liquidity, and one needs this ponzy scheme to keep feeding itself till the time the global economy recovers. However, if this thing falls flat, and the train is stopped too soon, we may be back to square one. The markets would need to keep going up to sustain the bull run - much like the space rockets. The printing press all over the world have injected fuel into the markets to move out of the recession zone, however, if the markets are stuck into a zone for even a month, and public confidence gets lower, we could all be into a big mess once again.
The fight quarter truly belonged to the bears, and they kept sitting tight over the market. It was a classic range bound market between January and March, and Index almost finished flat at the close of the quarter. The second quarter belonged to the bulls with market seeing returns of 15% and 28% in April and May respectively. The bears were left too stunned and circuited to do anything about it.
As we moved into the 3rd quarter, the bulls have done well with momentum with them. However, lately they seems to be running out of the 'good news' fuel at their end. The markets are more than 75% up from their low, and still 33% away from their peak. However, the peak of 2007 was a result of exeberance where the word 'RISK' completely disappeared from the world. Whatever progress we have made over the past years, whereas it may be debated that we are out of depression zone, but certainly we are far far away from the exuberance period as well.
So, I'm turning a little cautious on the markets, and think that over the medium term, 4800 could well turn out to be the pivotal point for the markets. If they are able to cross it by the end of September, I would believe that we would end the year on a high. Else, we may be pulled into the deeper holes of recession once again. This rally is no doubt driven by liquidity, and one needs this ponzy scheme to keep feeding itself till the time the global economy recovers. However, if this thing falls flat, and the train is stopped too soon, we may be back to square one. The markets would need to keep going up to sustain the bull run - much like the space rockets. The printing press all over the world have injected fuel into the markets to move out of the recession zone, however, if the markets are stuck into a zone for even a month, and public confidence gets lower, we could all be into a big mess once again.
