Wednesday, October 7, 2009

THE FINAL CALL®™ - Oct 7, 2009

The Bull needs the gap up today, but will it come?  We are positionally short, and as I mentioned yesterday likely to be whipsawed on the razor sharp horns of the bulls!  Give in or fight?  Do I smell a faint tinge of an aroma of biased bearishness somewhere deep in my nasal folds!  Well, one needs to be careful not to fall into the trap of swimming against the tide.  As somebody said, I forget who it was "Truth often becomes distorted when emotions are involved. Depending on the environment (positive or negative) at the time, the same event may cause different emotions."

The Dow charged back again last night like the proverbial Knight in Shining Armor battling in vain The Curse of Dow10K.  The SGX is trading marginally up sideways.  HK is up, Japan is up, China is in suspended animation since a few days (probably a hangover of the 60th anniversary celebrations).

Amidst the volley of opinions, there is but one common thread, the fear of DOOM!  The other side, however, is desperately trying to propagate the hope of a gradual recovery, which is just what is titillating the markets into defying Newton's law of gravity.  There is, but without doubt, a motivated global cartel with a vested interest in trying to hold the sinking economies of the developed world above the perilous seas, that is at work in a crafty and devious manner.

Economist Nouriel Roubini  mentioned yesterday the global recession is coming to an end; however, the recovery will be anemic

"Make no mistake that whatever top we put here or there will be the top leading to the apocalyptic times in financial markets which will eventually force true socioeconomic reforms across the globe and change governments that committed this financial suicide. Such as United States of America, which altered the basic structures of capitalist economy at the expense of your future, to produce this greatest sucker rally of all times.
Those chosen financial dinosaurs that engineered this mess in the first place are now saved and their stocks are trading near all time highs. Until they are gone, this will never end. Unfortunately history proved that their influence in politics will cost us more than a regular deflationary bear cycle, or even a depression. It will unfortunately take greater degree shock to remove these black-holes from the system... and when they are gone, they will probably take their supporters with them.......This gigantic sucker rally off the March lows which retraced little more than 38% of the entire drop is about to be over and more importantly, FED / Treasury is now out of ammo unless they open new printing facilities to speed up the process. IF they do however, inevitable bankruptcy of US government will be much sooner as we and they also know - Atilla Demiray."

Back home, people are more charitable and circumspect with their alphabets.  The doomsdayers have been around since Nifty 4750 multiple tops, most have been toasted and fried on both ends, some are still holding on to each other by the scruff of each other's necks.

Amidst all this cacophony, the charge of the global ticker brigade continues.  By this Friday, one should be able to get a hint of where this is leading us to.  Patience pays!

We continue holding shorts in Nifty Futures only.

The Dow has just opened on a negative tick and is trading flat, which is understandable.  The last two days upmove has been too fast and a corrective trend is fine.  Yet, I keep bumping into gloom doom news on the virtual screen.  Here are some excerpts:

"If you throw a ball into the air, it has to slow down before it comes down.  The market does not exactly follow the laws of physics, but its action does seem to reflect this one.  The crowd is buying fantasies, when fantasies get far out of line with reality, you've been presented with the opportunity to make money, whether its on the downside or the upside" -
"Recession is over, depression has just begun.  Get ready, because the second dip will occur." -
"Illusion of control - Central banks and interest rates - Economic strength has got little to do with the direction of rates." -

Somehow, deep in the recesses of one's subconscious backups, one still refuses to accept this gloom doom theory propagated by analysts.  Whether it is naivety or  the contra-contrarian view calling, one will know only after the dice has been tossed.  Not many a trader remains who has not seen the brash power of sheer tsunamic liquidity wiping off sell orders from the screens in flashes of nanoseconds as well as the power that goverments in cahoots with big business wields.  Yes, the ball has to fall (no spherical body or otherwise has had the gumption to defy Sir Issac Newton as of now).  The thing is when will it fall.  The price-time continuum that analysts (due credit to them) try to predict has become too complex in today's markets and have a nasty habit of tripping the best of this tribe at the most unexpected of moments.

A sensible voice amidst all this cacophony is from Sudarshan Sukhani - "A dip is the correction of the main trend."

The last two days have tested the trading community's patience to the last dime in their pockets.  Having emerged from the roller coaster and having paused to take a deep breath of polluted city air, you get freebies thrown into your face by none other than you know who!!!  What the 1:1 from RIL bodes for the opening bell tomorrow looks like a foregone conclusion.  What remains to be seen is whether the enemy lines are overrun and ground positions held or there is a ceasefire and we retreat back to home ground.

We hold Nifty shorts and we hold until the trend tells us otherwise.

THE FINAL CALL®™*(By Invitation Only) Give me a living human being with a good internet connection, a cellphone with a running cellular connection, a valid trading account with a decent brokerage, and a modest capital starting with INR 20000 and I will make him RICH!!!
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