Something Is Not Right!
Markets were spooked by the Dubai storm, and bears finally had their long awaited wish. Everything was falling, and people rushed to buy protection. Nifty futures were back to trading in discount, and it seemed like bear market was back.
Nifty opened close to 5100 on the expiry day (26th day), and traded in a range for most part of the day. However, towards the end, it succumbed to the global pressures, and went into sharp fall. Thankfully US has a Thanksgiving and so it didn't add anything to the fall. And today as well the markets continued to fall amidst higher fears on the Dubai default (which seems unlikely, and a clear case of over-reaction currently. Unless...). Nifty touched 4820 levels, but recovered soon after HK closed, and went on to regain most of the fall. It finally closed at 4940 levels - quite a rally from its intra-day lows.
As I write this, Europe has re-bounded, and is trading in green. However, I think even if Dubai is averted, there are others waiting to explode. Its a liquidity rally, and nothing more than that - and NOT A RECOVERY RALLY. We are still groping in the dark about the way forward. Spain is struggling, Ireland is close to default, and now Dubai joins the list.
I would be surprised if this party continues for another year. I would be happy to buy Nifty 5000P December 2010 at current levels. Something doesn't seem to be right in this rally - and I don't know what.
Markets were spooked by the Dubai storm, and bears finally had their long awaited wish. Everything was falling, and people rushed to buy protection. Nifty futures were back to trading in discount, and it seemed like bear market was back.
Nifty opened close to 5100 on the expiry day (26th day), and traded in a range for most part of the day. However, towards the end, it succumbed to the global pressures, and went into sharp fall. Thankfully US has a Thanksgiving and so it didn't add anything to the fall. And today as well the markets continued to fall amidst higher fears on the Dubai default (which seems unlikely, and a clear case of over-reaction currently. Unless...). Nifty touched 4820 levels, but recovered soon after HK closed, and went on to regain most of the fall. It finally closed at 4940 levels - quite a rally from its intra-day lows.
As I write this, Europe has re-bounded, and is trading in green. However, I think even if Dubai is averted, there are others waiting to explode. Its a liquidity rally, and nothing more than that - and NOT A RECOVERY RALLY. We are still groping in the dark about the way forward. Spain is struggling, Ireland is close to default, and now Dubai joins the list.
I would be surprised if this party continues for another year. I would be happy to buy Nifty 5000P December 2010 at current levels. Something doesn't seem to be right in this rally - and I don't know what.
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