Big day for bulls ahead, Dow Futures up 200 points

After a disastrous week equity markets are on a recovery mode today. Asian markets are trading up while US Stock futures sky rocketed, currently trading up 200 points. The major reason behind the upmove is the following news snippet:

"The European Central Bank confirmed late Sunday that it will buy government bonds in the secondary market to ensure debt and liquidity to those market segments which are dysfunctional"

We expect the markets to pull back in the next two days while down trend will resume in the later part of the week. Here is the catch.....Do not get into midcap counters and try to ride the frontline counters.

We expect Nifty to take a shot at 5200 levels only to fail later. One should keep in mind that the pull back is just a bounce after a dreadful week. Patni computers is showing immense strength in a other wise weak market. ET reports that

"The three Patni brothers, who co-founded and promoted the country’s sixth-largest software exporter, Patni Computer Systems, may get a premium for selling their stake to Japanese strategic investor NTT Data Corp, as compared to private equity firm General Atlantic"

Wall Street - Correction to crash

The Unprecedented happenned on wall street yesterday. Dow Jones plunged 1000 points (700 points to be specific in a matter of 15 mins) sending panic signals to investors. While the unusual activity is being reviewed by SEC and other regulatory agencies, one of our sources say the trade happenned in Procter & Gamble counter between 02:40 and 03: 00 PM EST. Nasdaq announced it will cancel all the trades on behalf of participants.

"Massacre" is the right word to use. The Tape was shaken with ferocity of the fall. Investors are dumbstuck. If the close on the wall street had been miserable we might have seen a Black Friday across the world today. Dow Jones ended the day with a loss of nearly 350 points pushing Austrialian stocks down. Australia lost 4 pct in the last 2 days.

Indian Markets - Resilient

Indian market performance is far better than the rest of the markets on the globe. But one should understand we might not be able to hold on for longer period. Indian markets are likely to tank today and any pull backs should be used to get out of equities. We were suggesting the same in this column from the past one month. We were bearish and continued to be bearish courtesy the soverign debt concerns. We failed to time the correction till last month but we figure the correction is round the corner and were right on spot this time

Sovereign Debt" , the new bear mantra

From Athens to Americas global equities continued to tumble, courtesy Sovereign debt troubles in the European region sending Euro to a 13 month low agains the US Dollar. Subject matter experts say this is just the begining of a massive debt crisis in europe and might be as dangerous as a Lehman crisis fall out.

Sovereign debt is the new buzzword doing round in the financial circles. We at Indiabears predicted too early that this crisis cannot be neglected and markets will only take notice after an event.

Thursday morning Asian markets continued to get smashed with Australian and Japanese Nikkei sinking deep in the red.

While D-Street took a beating too over the last 10 days, one should notice that the markets have not shed much blood yet. The front liners are causing the indices to lose weight while midcaps are sitting pretty. One reason for the same can be attributed to the stellar results . But not all midcaps fall in this category. We again advice the real blood shed in midcap space is yet to come. For time being stay away from the space if you are a trader.

We believe UK and US will also be pulled into this bear attack as both the countries soverign debt levels are alarming. Spain and Portugal are nearing a bigger crisis. India on the other hand might witness a fund slow down.

Any hike on the interest rate front in the US might spell death bell to global markets at this point of time. As we mentioned many times earlier "May is coming ,better be ready" is a clear indication of a classic correction. It is too early to figure out whether this leads to the continuation of the bear market which started in October 2007 from US market perepective. Indian markets are out of the bear phase but will likely react to the sentiment.

Sky is falling !! Euro debt fears hit global markets

The much ignored Euro debt crisis took its toll on the global asset classes. Stocks from Athens to Zimbabwe fell on massive debt concerns prevailing in Europe. We have been writing in this column about the same that markets cannot ignore debt concers for longer period and also mentioned May will be a dreadful month.

Wall Street was hit with a massive bear attack yesterday and the fear index popularly known as the VIX spiked up 26 pct . Volatility is here to stay and this time the trend clearly favours the bears.

Indian markets are no exception. When the funds sell (especially FII's ), they sell it hard. Fortunately though index is on the down trend we have not seen a bloodbath till date and one is round the corner. Investors should take this as an oppurtunity to get out of equities atleast trading positions. Operators are seen trying to get rid of the junk stocks.

Stay away from the markets and as mentioned yesterday to our subscribers below 5200 for Nifty the only support lies at 5050 on its journey to 4800, which can be considered rock solid suppport level.

Sell in May ??? Not right away !!!! D-Street to open positively

US Markets recouped most of their losses encountered on friday. Greece Aid and consumer spending pushed Indices to a big gain, taking the Monday's tally to 10 positive closings of the last 11 sessions on Monday .

Metals - Austrailian Impact : Sesa Goa was crushed yesterday, thanks to a 40 pct tax tax proposal by Australia. Global commodity prices tumbled on the news. We expect the weak sentiment to continue for some more time.

Chine Bubble : Investment Guru Marc Faber is predicting a chinese property bubble to burst in the next 6-9 months.

India PMI : HSBC Purchasing Manager’s Index (PMI) fell for the second consecutive month in April, as operating conditions improved at a weaker rate during the period. We term this as saturation period instead of a slow down. Economy is ready to take off but wait for a cool off...

Stay away from metals pack while midcaps still look hot. Let us see whether "Sell in May and go away" works this year !!!!

Greece bailed out, Bears to go all out !!!!

Trouble european county Greece got a soothing relief over the week end when IMF sanctioned a 145 billion dollar bail out along with the Euro Zone partners. Global markets are not interested in the news as the bail out number has increased the expectations and the soverign debt crisis spreading to Spain and Portugal. Watch out for negative news flow in the other two countries.

We were alerting the visitors of the website about Soverign Debt crisis in the European zone and Indian markets have not seen much of a impact till date. As situation gets worse D-Street will feel the pinch.

US Markets showed their back on Friday after Senate ordered for a criminal case against Goldie. US Economic data too is not strong enough to propel the bulls. One should agree that the economy has come up a long way, but there is still a longer leg to cover to finish off the race. Confining to local factors is not warranted in the current global situation.

Indian economy is running smooth and we do not see any internal impact on the economy. As the soverign crisis deepens, the story repeats itself - Slow down in fund inflows, increase in outflows etc etc. At the same time we do not expect Sensex to go down rapidly too.

Going long in equities at this point of time is not at all advisable, given the market conditions as the situation is tilted heavily towards bears...Midcap melt down is coming sooner than later. While long term investors should stick to their holdings, short term traders or swing traders should insure themselves from any downsides buying Nifty puts

Markets to take off in the green zone

Markets will be opening in the positive zone today but watch out for the later session. Markets are trying to shrugg off the bad news and take off on the good news. It is clearly evident from the last 4 months market movement.

May is here and traditional data shows there will huge sell-offs this month. Last year there was a massive rally contradicting the data. Few midcap results have been stunning in India.

Patni reported a 100% rise in net profit to Rs 157 crore for the first quarter ended March 31, 2010, on improved demand for outsourcing services as well as foreign currency gains. IT is definitely a sector to watch especially the second rung pack but one should keep an eye on the forex markets.

Among other sectors Autos are ruling the roast along with Auto ancillaries, Real estate is yet to pick except for bits and pieces of the country. Commodities are seen stretching from last year's pull back. We expect a bigger set back here.

Today's rally might lure many into the bull side brushing off the wednesday's slide, but this might be one trap you would want to miss out on. After all May is coming and that too after a massive pull back