After being a bull for quite some time, I'm turning more and more bearish on the markets. Going back to my childhood, I used to feel very happy whenever I got a raise in my pocket money. However, in the end it never mattered, and I was left with same/no savings at the end of the month. The expenses always used to catch with the free money/increment. I guess the same is about to happen with the stimulus spendings - a lot of it has gone down the drain. In the end, people would be left no richer than they were without it - and thats not a happy state as they weren't very rich to start with.
We are coming close to end of 2010 - the time predicted for the Quantitative Easing to end. Almost three years have passed since the crisis started, and we are no where close to closing down the taps. The stimulus would continue for another year or so, and this isn't a very happy sign. Never mind the asset prices and the booming markets, its all in the dreams. Only, instead of Christopher Nolan its been designed by Ben Bernanke (and its awful).
Nifty has outperformed the global indices, and has scaled to a new 30 month high. Markets look all set to break new grounds, and may even tough the earlier highs. A lot of FII money withdrawn from the Euro area has entered our markets (with more than USD 2 Billion flow in July). However, do not thing this is a long term shift, but just a temporary parking space. And thats what makes it much more dangerous - we are moving towards the Asian crisis scenario. There aren't too many markets with good GDP growth, and hence it may end up over-heating the handful of markets which are growing now.
In India, the result season has been very good so far, with most of the top names not reporting any great positive surprises. Add to it RBI's firefighting with inflation, and we do have a possibility of good correction in the markets from here. I wouldn't be surprised if August and September turn out to be bad months for the Indian equities.
I'm currently short on the markets, and would continue to roll my positions until 5600 is broken on Nifty. Earnings haven't supported to the recent upmove, and markets may find it increasingly difficult to justify their premium to the region. DIIs have been sellers for quite some time now, and FII may very soon find India too overbought. Or worst of all, some one may kick Uncle Ben out of his dreams, and he would put an end to this whole messy maze.
We are coming close to end of 2010 - the time predicted for the Quantitative Easing to end. Almost three years have passed since the crisis started, and we are no where close to closing down the taps. The stimulus would continue for another year or so, and this isn't a very happy sign. Never mind the asset prices and the booming markets, its all in the dreams. Only, instead of Christopher Nolan its been designed by Ben Bernanke (and its awful).
Nifty has outperformed the global indices, and has scaled to a new 30 month high. Markets look all set to break new grounds, and may even tough the earlier highs. A lot of FII money withdrawn from the Euro area has entered our markets (with more than USD 2 Billion flow in July). However, do not thing this is a long term shift, but just a temporary parking space. And thats what makes it much more dangerous - we are moving towards the Asian crisis scenario. There aren't too many markets with good GDP growth, and hence it may end up over-heating the handful of markets which are growing now.
In India, the result season has been very good so far, with most of the top names not reporting any great positive surprises. Add to it RBI's firefighting with inflation, and we do have a possibility of good correction in the markets from here. I wouldn't be surprised if August and September turn out to be bad months for the Indian equities.
I'm currently short on the markets, and would continue to roll my positions until 5600 is broken on Nifty. Earnings haven't supported to the recent upmove, and markets may find it increasingly difficult to justify their premium to the region. DIIs have been sellers for quite some time now, and FII may very soon find India too overbought. Or worst of all, some one may kick Uncle Ben out of his dreams, and he would put an end to this whole messy maze.
