US equity markets have risen fast and furious in the last fortnight. Dow had closed yesterday at record high of 17612 and looks strong to rise even further. In my very first blogpost I had given the target of 18000 for Dow when Dow was sliding towards sub-16000. Though 18000 has not been achieved in Dow, right now I am of the opinion that its high time to short the US market for some handsome gain. The reason is that US markets are clearly making a top. Maybe an intermediate top, but topping pattern is sufficiently evident in Dow. And that is the reason for traders to go short and make money.
But what if I am wrong? Well the fact of the matter is that this kind of distribution can be sustained only for maximum another couple of hundred points if we are following Dow. In other words if Dow doesn't sell off from present level then it will certainly sell off within 200 points. That means the sell off zone for Dow is between 17600 to 17800. Hence traders in US equity markets need to take short positions now and rake in handsome profit.
For traders in Indian equity markets, this is the signal to go short. You can short all front-line stocks with gay abandon, especially the banking sector. As the US markets sell off there will be contagion effect in Indian markets. Decoupling is still quite some years away, so go short as US markets are topping out.
But what if I am wrong? Well the fact of the matter is that this kind of distribution can be sustained only for maximum another couple of hundred points if we are following Dow. In other words if Dow doesn't sell off from present level then it will certainly sell off within 200 points. That means the sell off zone for Dow is between 17600 to 17800. Hence traders in US equity markets need to take short positions now and rake in handsome profit.
For traders in Indian equity markets, this is the signal to go short. You can short all front-line stocks with gay abandon, especially the banking sector. As the US markets sell off there will be contagion effect in Indian markets. Decoupling is still quite some years away, so go short as US markets are topping out.
