Saturday, November 22, 2008
archives of what i wrote in The Economic Revolution
15th november 2008
We had a truncated week – 4 day trading week and Monday was a 6 % plus day. Inspite of that we managed to close the week 5 % down. That shows that what I had stated about not being convinced about the upmove is absolutely correct. FIIs have resumed selling as expected and retail investors are running helter-skelter for cover.
G 20 meeting over the weekend holds the key – it seems. But I am very skeptical about any kind of monetary or fiscal stimulus that the government may announce as per commitments made at G 20 meet.
Our economy is plagued by short term foreign currency debt raised by corporates – in the form of ECBs and FCCBs - and white sharks are lurking to pounce when huge repayments have to be made over the next 8 months upto mid 2009 putting severe pressure on foreign exchange reserves and correspondingly the exchange rate.
I am looking at a rather grim 2009 and must state that CASH IS ABSOLUTELY KING.
I feel the 27th October lows may hold in the short term but in the medium term we are bound to seek new lows and much lower lows.
8th november 2008
The rally fizzled out midweek - in US as well as in our markets – and is again trying to gather some steam by end of the week. I am not convinced about the strength of the up-move. FII selling seems to have tapered down but it can resume any day and we will start to slide again.
One thing came out of things that have happened in the last ten days. RBI seems to have lost its independence and now it can be called as a wing of the finance ministry. The writing was on the wall when Dr Reddy was not given the extension and he was replaced by a secretary in the finance ministry. The current FM wants to go out on a high and he needed a ‘pliant’ RBI governor which he has got now.
WILL IT BE A TURN OF SEBI NEXT ? ? ?
1st november 2008
The preceding two weeks have seen a major upheaval in Indian markets. It was inconceivable at the beginning of the month that we will see a drop of 45 % at index level. I was predicting levels of 2550/2700 but these levels came rather too soon and even surpassed.
We have seen a rather strong SEBI / RBI intervention over the weekend and we should cross 3000 level on nifty on Monday. The moot point is that whether we can hold these levels with any conviction if FII selling continues unabated.
I have a strong feeling that lows of last Monday – 27th October will hold as bottom for some time to come. But the point is that we have moved up rather sharply and including the coming Mondays gain, we would have moved nearly 40 % from the 27th October low. This will be unsustainable and we will give up half of those gains which will again take us to 2550/2700 levels. From there-on the recovery can start in the right earnest.
18th october 2008
The world markets seem to have started stabilizing although intraday volatility is still high. This volatility must subside considerably before we can talk of any short term / midterm bottom.
Our markets are still in a ‘strong sell’ mode as new lows are being made virtually every day. There has been a major downward shift in earnings expectations for the next four quarters and that is casting a dark shadow on our markets along with continuous selling by FIIs. .
This week we may have some bounce … and a pronounced one … if SEBI takes some action about lending of stocks by P-note holders. This bounce should be used to exit longs as the sellers can / will find some other way to continue ‘shorts’.
We are going to see 2550/2700 nifty levels in the coming months so don’t go overboard with your buy orders …. Keep looking at value …. just forget momentum ….. it is a ‘bad’ word in existing scenario …. Remember the analogy of sharing a rescue boat with an elephant ……
11th october 2008
Mayhem that we have seen last week around the world markets have not been witnessed since the great depression of 1930s. In 1987 October, when black Friday occurred, the world markets were not so well integrated that echoes will be heard in every nook and corner.
Last week, I had mentioned that look at the global markets as our markets will simply replicate whatever happens there asides a small show of strength from time to time which will be sold into.
This week we may have some stability and a small bounce …. Not more than 5 to 7 % …. Can not be ruled out …… we r going to see 2550/2700 nifty levels in the coming months so don’t go overboard with your buy orders …. Keep looking at value …. just forget momentum ….. it is a ‘bad’ word in existing scenario …. Remember the analogy of sharing a rescue boat with an elephant ……
4th october 2008
A tweaked bailout package was finally cleared by US senate and congress. The Wall street was not enthused and greeted same by closing approx 450 points lower than days high … overall the week was bad for US market …. Closing with major losses over the week …… I am dwelling so much on US markets because that is the single most factor to which the world markets are rhyming …. Remember the analogy of sharing a rescue boat with an elephant ……
27th september 2008
As expected US rally lost steam midweek and echoes were heard on wall street. It is expected that the bail-out package will be cleared by the US congress by Sunday evening and details must be available bt Monday morning before asian markets open – it is widely expected that the asian markets will tank if no deal is announced by then.
20th september 2008
Finally US govt has acted accepting that desperate situations need desperate measures. Short sales are banned in US and UK triggering a massive short covering rally. This week, US govt will also declare a massive bailout programme buy taking over all bad loans on their books. This means institutions hv to take onetime BIG BIG writedowns. We will watch very closely future developments but this rally also should peter out soon.
yahoo messenger archives from 10th / 21st nov 2008
madhav ranade (11/21/2008 10:07:20 AM): something has happened in last half an hour .... all asian markets hv snapped back .... ad so does our market ....... for nifty spot .... 2605/2615 is crucial zone and for reliance 1065/1075 ...... pl watch out .......
madhav ranade (11/21/2008 9:36:53 AM): good morning ! my worst fears seem to be coming true .... and rather too soon ....... at this rate, i really wonder where we will be at xmas new year time .......
madhav ranade (11/20/2008 9:49:46 AM): good morning ! our 2550/2700 range will be consumed today ... we shud see levels of 2500/2510 in first few mins and that can be a good long entry point for trades with sl of about 30/40 points ...... i expect profit taking to pull up nifty to about 2540/50 in quick time ...... investors can look to buy a bit of their favourits ...... at these index levels ... this wl be a good averaging opportunities for deliveries taken at much higher rates ..... in any case make sure that u dont put in more than 15 / 20 % of your investible funds available with you ..... pl read my comments in my article dt 15th nov uploaded in a file on my free group .... http://finance.groups.yahoo.com/group/sumamura-free/
madhav ranade (11/19/2008 9:54:22 AM): good morning ! flat open with a downward bias ..... wait to go short on a bounce ..... definite shorting level closer - as far as possible - to 2780/90 ... or when u see downward momentum building up .......
madhav ranade (11/18/2008 2:56:38 PM): brokers and bull operators created a bogie of stocklending by FIIs .... chandu bhave staved off all the pressure put on him .... evem from FINMIN ..... for obvious reasons .... and his stand is vindicated now ...... three cheers to chandu for all the guts shown ......
madhav ranade (11/18/2008 3:19:18 PM): if US auto cos wl go bankrupt .... we will see 2003 lows ... like 900 on nifty and 3000 on sensex ..... it wl not happen ..... prospect of 3 million job losses is daunting for any govt .... 25 billion is not a big amount compared to that .......
madhav ranade (11/17/2008 9:47:55 AM): good morning ! dow futs hv turned positive in last one hour which has given glimmer of hope for the bulls .... RBI announcements over weekend hv been generally positive but how much the banks will implement is a moot point to be noted ....... my levels tell a lot than what i can elaborate and they r uploaded in 15th nov file uploaded on my free group http://finance.groups.yahoo.com/group/sumamura-free/
madhav ranade (11/14/2008 10:30:09 AM): dow / nasdaq rally ...... 25 % of the rally came on exxon / chevron ..... oil stocks .... another 25 % .... on google / apple ..... tech rally may not survive and crude has become extremely fickle commodity .... what i mean is that gains may notsustain over next few days ..... keeping that in mind be cautious .....
madhav ranade (11/12/2008 9:52:10 AM): good morning ! sgx nifty is indicating a weak opening .... but not a major gap down ...... IIP nos shud hold the key .... if IIP nos are better than expected, we wl hv a bounce butthat shud be used to sell rather than to buy .... excise collections are showing that october was bad ... and a good sept figure will guarantee catastrophe in october ...... overall picture is not at all good and dont depend on govt to announce any fiscal stimulus as we simply have no resources to do that ..... thanks to chiddu who wagered in february - for the fifth time .... but unfortunately bet has gone against and he stands to lose whatever he made in 4 earlier years ....... politically i mean .....
madhav ranade (11/11/2008 2:51:20 PM): moral of the story is tiger balm does not cure cancer ..... only wherever it is applied .... skin becomes more fragile and burnt .......
madhav ranade (11/11/2008 11:26:06 AM): everyone was saying that buffet is positive on market ...... what did he do .... he loaned goldman 3 billion dollars at 10 % and took warrants to be converted at 115 dollars a share with in 5 yrs ...... HE DID NOT BUY A SINGLE SHARE ....... he really acted like a local pawnbroker who exploits poor when they r in need ...... 10 % is a very high interest rate in US and that too for corporate lending .......
madhav ranade (11/10/2008 9:55:42 AM): good morning ! chinese 'tiger balm' is now being tried out ... and for what - CANCER ...... everyone know efficacy ......
madhav ranade (11/21/2008 9:36:53 AM): good morning ! my worst fears seem to be coming true .... and rather too soon ....... at this rate, i really wonder where we will be at xmas new year time .......
madhav ranade (11/20/2008 9:49:46 AM): good morning ! our 2550/2700 range will be consumed today ... we shud see levels of 2500/2510 in first few mins and that can be a good long entry point for trades with sl of about 30/40 points ...... i expect profit taking to pull up nifty to about 2540/50 in quick time ...... investors can look to buy a bit of their favourits ...... at these index levels ... this wl be a good averaging opportunities for deliveries taken at much higher rates ..... in any case make sure that u dont put in more than 15 / 20 % of your investible funds available with you ..... pl read my comments in my article dt 15th nov uploaded in a file on my free group .... http://finance.groups.yahoo.com/group/sumamura-free/
madhav ranade (11/19/2008 9:54:22 AM): good morning ! flat open with a downward bias ..... wait to go short on a bounce ..... definite shorting level closer - as far as possible - to 2780/90 ... or when u see downward momentum building up .......
madhav ranade (11/18/2008 2:56:38 PM): brokers and bull operators created a bogie of stocklending by FIIs .... chandu bhave staved off all the pressure put on him .... evem from FINMIN ..... for obvious reasons .... and his stand is vindicated now ...... three cheers to chandu for all the guts shown ......
madhav ranade (11/18/2008 3:19:18 PM): if US auto cos wl go bankrupt .... we will see 2003 lows ... like 900 on nifty and 3000 on sensex ..... it wl not happen ..... prospect of 3 million job losses is daunting for any govt .... 25 billion is not a big amount compared to that .......
madhav ranade (11/17/2008 9:47:55 AM): good morning ! dow futs hv turned positive in last one hour which has given glimmer of hope for the bulls .... RBI announcements over weekend hv been generally positive but how much the banks will implement is a moot point to be noted ....... my levels tell a lot than what i can elaborate and they r uploaded in 15th nov file uploaded on my free group http://finance.groups.yahoo.com/group/sumamura-free/
madhav ranade (11/14/2008 10:30:09 AM): dow / nasdaq rally ...... 25 % of the rally came on exxon / chevron ..... oil stocks .... another 25 % .... on google / apple ..... tech rally may not survive and crude has become extremely fickle commodity .... what i mean is that gains may notsustain over next few days ..... keeping that in mind be cautious .....
madhav ranade (11/12/2008 9:52:10 AM): good morning ! sgx nifty is indicating a weak opening .... but not a major gap down ...... IIP nos shud hold the key .... if IIP nos are better than expected, we wl hv a bounce butthat shud be used to sell rather than to buy .... excise collections are showing that october was bad ... and a good sept figure will guarantee catastrophe in october ...... overall picture is not at all good and dont depend on govt to announce any fiscal stimulus as we simply have no resources to do that ..... thanks to chiddu who wagered in february - for the fifth time .... but unfortunately bet has gone against and he stands to lose whatever he made in 4 earlier years ....... politically i mean .....
madhav ranade (11/11/2008 2:51:20 PM): moral of the story is tiger balm does not cure cancer ..... only wherever it is applied .... skin becomes more fragile and burnt .......
madhav ranade (11/11/2008 11:26:06 AM): everyone was saying that buffet is positive on market ...... what did he do .... he loaned goldman 3 billion dollars at 10 % and took warrants to be converted at 115 dollars a share with in 5 yrs ...... HE DID NOT BUY A SINGLE SHARE ....... he really acted like a local pawnbroker who exploits poor when they r in need ...... 10 % is a very high interest rate in US and that too for corporate lending .......
madhav ranade (11/10/2008 9:55:42 AM): good morning ! chinese 'tiger balm' is now being tried out ... and for what - CANCER ...... everyone know efficacy ......
yahoo messenger archives from 31st oct / 7th nov 2008
madhav ranade (11/7/2008 9:55:11 AM): good morning ! wednesday morning i had mentioned about the problems i was anticipating on US charts .... and how true was that .... a flttish opening with a slightly downward bias expected ...... eventually we wl get to 2550/2700 zone again .... may be in 2 days may be in a week .... and we shud plan to invest some money at that time ......
madhav ranade (11/7/2008 10:25:53 AM): fridays and yesterdays fall ...... i noticed that the stocks which had run very hard on the back of shortcovering by FII fear, hv fallen the most. that implies that FIIs hv created shorts in same stocks in some other way .... infact they will be happy that the could cover at lower levels and reopen shorts at higher levels ...... by intervening in the market too often .... we r giving opportunity to shortsellers to continue trading like this ......
madhav ranade (11/4/2008 10:19:08 AM): i feel that nearly 50 % of FII short covering is over and we will be back to normal trading from today ...... what happened on last 3 days shud be taken as an aberration and good opportunity to make some quick opportunistic gains. this is what i wrote on 1st evening - The preceding two weeks have seen a major upheaval in Indian markets. It was inconceivable at the beginning of the month that we will see a drop of 45 % at index level. I was predicting levels of 2550/2700 but these levels came rather too soon and even surpassed. We have seen a rather strong SEBI / RBI intervention over the weekend and we should cross 3000 level on nifty on Monday. The moot point is that whether we can hold these levels with any conviction if FII selling continues unabated. ..... I have a strong feeling that lows of last Monday – 27th October will hold as bottom for some time to come. But the point is that we have moved up rather sharply and including the coming Mondays gain, we would have moved nearly 40 % from the 27th October low. This will be unsustainable and we will give up half of those gains which will again take us to 2550/2700 levels. From there-on the recovery can start in the right earnest.
madhav ranade (11/3/2008 10:32:55 AM): somebody is saying total FII SLB posn is 6300 crores ..... in some stocks it may be high compared to total average deliveries but overall it is not HUUUUUUUUUUUGE considering that it has been built over last 3/4 months .....and that is why chandu bhave is not pulling the trigger .... may be .....
madhav ranade (11/7/2008 10:25:53 AM): fridays and yesterdays fall ...... i noticed that the stocks which had run very hard on the back of shortcovering by FII fear, hv fallen the most. that implies that FIIs hv created shorts in same stocks in some other way .... infact they will be happy that the could cover at lower levels and reopen shorts at higher levels ...... by intervening in the market too often .... we r giving opportunity to shortsellers to continue trading like this ......
madhav ranade (11/4/2008 10:19:08 AM): i feel that nearly 50 % of FII short covering is over and we will be back to normal trading from today ...... what happened on last 3 days shud be taken as an aberration and good opportunity to make some quick opportunistic gains. this is what i wrote on 1st evening - The preceding two weeks have seen a major upheaval in Indian markets. It was inconceivable at the beginning of the month that we will see a drop of 45 % at index level. I was predicting levels of 2550/2700 but these levels came rather too soon and even surpassed. We have seen a rather strong SEBI / RBI intervention over the weekend and we should cross 3000 level on nifty on Monday. The moot point is that whether we can hold these levels with any conviction if FII selling continues unabated. ..... I have a strong feeling that lows of last Monday – 27th October will hold as bottom for some time to come. But the point is that we have moved up rather sharply and including the coming Mondays gain, we would have moved nearly 40 % from the 27th October low. This will be unsustainable and we will give up half of those gains which will again take us to 2550/2700 levels. From there-on the recovery can start in the right earnest.
madhav ranade (11/3/2008 10:32:55 AM): somebody is saying total FII SLB posn is 6300 crores ..... in some stocks it may be high compared to total average deliveries but overall it is not HUUUUUUUUUUUGE considering that it has been built over last 3/4 months .....and that is why chandu bhave is not pulling the trigger .... may be .....
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