Fasten Your Seat Belts -India and China will be Main Drivers of Global Growth

IMF is about to revise its global projections of growth from 3.4% in 2016. Its going to be a downward revision. It is no rocket science to understand that this downward global growth projection will be due to  global slowdown in productivity, debt overhang, sluggish demand growth and you can go on and on.

At this point in time, everything that can be wrong is wrong with global economy. In this scenario the only beacon of hope for global growth is shining in India and China.

Conditions are more India leaning as the present Indian Govt is continuously making the right moves to drive growth. Mark Tully, ex-BBC correspondent in his book "No full stops in India" holds this very view.

This is what mark Tully in his book maintains : "The way changes are coming in Railways, Power sector, Defense Production and in governance and at the same time accompanied by the resentment of the old forces indicate that the process of change has begun albeit slowly but firmly and is going to be painful."

The only caveat is that Indian Govt should take immediate steps to quickly recover huge capital to the tune of Rs 4.4 trillion from willful defaulters of banks.

US Markets End Iffy - Should We Remain Undecided?

 

Dow Jones Industrial Average (DJIA) could not climb the wall of worry. This wall is erected around 17700 in Dow. In my last post I had mentioned how Dow needs to climb over 17700 wall to be able to reach 18000. In last trading session Dow made a high of 17695 and then dropped down to close at 17577.

Scenario No 3 as given in my last post has happened in trade. So we have to wait for another trading day to get a sense of which direction Dow is headed. More importantly, we have to find out when we need to exit our long positions.

All that has been discussed in my last post so just keep all conditions in mind. As of now there being no clear signal, we need to hold on to our long positions.
 

US Markets at Critical Juncture - What Happens Next?

US markets underwent further pain with Dow slipping 174 points in last trading session. This is serious damage to the index and has to be evaluated with full sincerity.

What does last closing in US markets indicate? Is it still safe to hold on to long positions? Let us try and get some sense of what is in store for the bulls.

Next trading session is very crucial to answering all these questions. For doing an honest analysis, let us consider the following scenarios :-

1. In next trading session if Dow closes near 17700, then long positions are absolutely safe and 18000 in Dow will be a reality.
2. If Dow closes near 17400, then we may see Dow slide down to 17000/17100 level. If this happens then we need to be patient and wait for a bounce. This dead cat bounce should take Dow to 17600 level where we should exit all our long positions.
3. If Dow closes near 17600 in next trading session, then we will have to wait for another trading day for either of the above mentioned points to happen.

The nub of the situation is that we will have to exit our long positions either at 17600 or 18000 in Dow, based on movement of Dow in trading sessions ahead as enumerated in preceding paragraph. So be calm and hold your horses!

Dow Makes a Comeback - Hold Your Long Positions

Yesterday US Markets witnessed strong buying. That helped Dow Jones gather 113 points to close at 17716. This is good news for all those eyeing for 18000 in Dow.

Buying was mostly spurred by oil making a strong showing. And strength in oil got rubbed on to the stock market.

Push in oil prices were witnessed right after Fed announced that the rate hike will not be scheduled for April. Further there was surprise fall in oil inventories. Grapevine was also in the market that soon there will be agreement on production freeze between major oil producing countries.

Whatever be the reason or clutch of reasons, stellar performance of oil ensured that bulls thundered on in US stock markets.

Today if we have positive close in US markets it will be further confirmation that 18000 in Dow is going to be achieved. 

So keep holding on to your long positions and good luck!

Dow Futures In Green - Will US Markets Open Strongly?

Yesterday Dow closed with a heavy fall. It closed 134 points down to register 17603 in the Index. A very ominous closing to put it bluntly.

However Dow Jones closed above 17600 and not below this psychological support level. That is significant as of now. This was elaborated by me in my previous post which you can access here. Till this support level is not violated by Dow on closing basis, we should retain our long positions.

As of publishing this post, European markets are in green and Dow Futures is indicating a positive opening in Dow today. We hope that Dow takes support from present closing and moves higher. The manner in which Dow rebounds will dictate our exit level.

Today oil is also on a rebound amid hopes of a production freeze. Let us watch how long this sunshine in global markets lasts.