Indian Equity Market View For Year 2019

Nifty index is the bellwether for Indian stock markets. Tracking Nifty will essentially give us insight into expected behavior of Indian equities. It is the beginning of year and hence is good time to track Nifty.

Nifty is presently in sideways move, displaying very low volatility. It is expected to remain within the range of 10500 to 11000 for the next couple of months. That is primarily due to the upcoming General Elections and market participants are in no mood to fully commit themselves either way.

What Happens After March

After March things will crystallize to a large extent as to whether present incumbent NDA has the upper hand in the upcoming elections or not. Let us analyze the two outcomes :-

1.  NDA Has Upper Hand : In that case you will see Nifty drift down to 10300 level. That will be for accumulation purposes for big market players. In other words, if you find Nifty at 10300 level in April, you may safely assume that NDA is going to win the elections, since the big boys of the market think so. Hence you should also accumulate stocks if you find Nifty at 10300 level in April.
2. NDA Does Not Have Upper Hand :  In such a scenario you will find Nifty racing to 11200 level on low volumes. This means that movers and shakers of markets are expecting NDA to lose the elections and hence are carrying out the process of distribution of stocks. Hence you should also sell major part of your portfolio if you find Nifty at 11200 level at the beginning of April.

What Happens after the Elections

In case NDA wins the elections you can expect Nifty to make new highs beyond its all time high of 11760. But in case NDA loses then it is going to be be one hell of a slide down into a bottomless pit. I would not be surprised if we see 7000 level in Nifty if NDA loses the upcoming General Elections.

Your Views

Do express your views on the subject in the Comments Section. With your views we may be able to understand this beast named equity markets better!!

In case you have any queries, do post them here and I shall be happy to get back to you. Watch this space for I shall be updating you at appropriate moments as Nifty makes its moves going forward.

Happy trading and investing!

What's in Store for US Markets in 2019 ?

Last week Dow Jones Industrial Average (DJIA) closed just shy of 24000. This gave Dow an impressive 2.6% gain from the start of the year 2019.

What next is the million-dollar question that begs an answer? I am going to provide some insights which should answer this question.

Forecast for Next Week

Come Monday, DJIA should see a steep drop. It will be due to the patience of the market participants running out over Federal Shutdown. Thereafter there will be volatility for the week with DJIA visiting levels above 24000 and below 23000.

Forecast for Month of January

The month of January will present a good opportunity for traders to profit from going long from sub-23000 level. From this level, there is an excellent chance of profiting until the level of 25000. This may not be achieved fully in January, but certainly, by February we can see 25000 in Dow.

Forecast For First Half 2019

The first half of 2019 will be spent in volatility with Dow between levels of 23000 and 25000. I would expect the bias in this yo-yo journey to be southwards, but this can be said with certainty as the action unfolds. I am basically saying that Dow will be moving sideways for the first half of 2019 between the levels of 23000 and 25000. However, jubilant reactions to some unexpected good news may allow Dow to reach levels of 26000.

Forecast For Second Half 2019

The second half of 2019 will see either continuation of sideways movement with southwards bias or an effort to reclaim the level of 27000. High probability is the former case of slow Southward Drift so as to be positioned for a good sell-off by 2020 -2021.

Here the reason lies in the inversion of US Treasuries' Yield Curve of 2-year and 5-year maturities. Now market participants will be keenly watching the yield curve of 2 yr and 10 yr maturities which is presently flat with narrow yield difference of 17 basis points. This hints that the yield curve of these papers has a high probability to invert anytime in future.

Early Signals if Dow Movements were to Differ From Above Forecasts

Let us now list the various early signs that will tell us that Dow will behave differently from what I am predicting:--

1. If Dow fails to reach 25000 levels and violates 22000 levels on a closing basis, then we will see much lower levels in 2019.
2. Alternatively, if Dow crosses above 27000 levels on a closing basis, then new highs will be made.
3. If the sideways movement takes place between levels of 22000 and 24000, then we will find Dow at lower levels than 22000 in 2019.

Seeking Views

I have charted the entire Dow movement for 2019. Anyone wishing to seek the detailed reasons for each of these forecasts is most welcome to do so in Comments Section and I shall be delighted to provide the reasons.

I shall also be updating you on weekly movements as and when appropriate. Your views will be highly appreciated by me and other readers. Your views may provide some new insights from which all of us may benefit.

Keep trading in 2019 with profit!

Trump's Era - Why Is He Not Your President?

First we witnessed widespread and sometimes violent protests saying  "Trump is not my President". Then there were protests to allow "Illegal Immigration" to carry on unchecked in US. Close on its heel came protests against "Travel Ban" from seven countries to US.

Then Michael Flynn had to resign from post of National Security Adviser due to leak that he had spoken to a Russian diplomat, Sergey Kislyak.

Now pressure is being applied for resignation of Attorney General Jeff Sessions for having spoken to the same Russian diplomat.



Phew! that's quite some action for Trump-bashers to orchestrate in such a short span of time. But you already have inside information on Illegal Immigration and Travel Ban through my post

Trump's Era - Acts to Save Democracy For Future Generations

As for conversing with Russians, you have the low down in my last post

Trump's Era : Target Real Enemy States, Not Russia

Now let us understand the logic behind screams of "Trump is not my President" in US and other world capitals. And that is exactly what we are going to do today. 

To begin with, let us ask some straight questions to these protesters. And if they cannot answer these questions honestly, then they should eschew their unreasonable demand for Trump to step down. Here we go :-

1. If a democratically elected leader is not your President, then who do you think should be your President - Army Chief, CIA Chief , Fed Chief or some Chieftain of your tribe? What twisted undemocratic logic, coming from those who plan to save US !! Will someone please tell them that US is the world's oldest democracy, and such wishes have no place in a democratic setup.
2. Why were the protests happening even while Trump was taking oath of office? At that point in time, Trump had not signed any executive order or trampled any democratic value or violated any constitutional law. Then why, why, why? That reeks of well orchestrated plan set in motion by some shadow power. We may dwell on that at some later date.
3. Do the protesters want Hillary Clinton, who lost the election to Trump, to be officially declared the President? In that case they have to first make amendment to Constitution to read thus " US Government will henceforth be of the protesters, by the protesters, for the protesters. Silent majority will have to remain passive spectators"

Think it over. This thinking exercise is meant both for the protesters and silent majority. After all it is your country and you have to decide whether you want to continue breathing in  a democratic setup or in a messy anarchic cauldron that the protesters are seeking.

Protest as much as you like, democracy allows for that. But at least protest with some democratic rationale. You cannot protest for removal of a democratically elected leader, just because silent majority endorses him and you do not. 

Time to wake up and spread the word!

Trump's Era : Target Real Enemy States, Not Russia

What is this hullabaloo about US official talking to Russian counterpart? What on earth is wrong in engaging with Russia? Is Russia an enemy state which is trying to wage war with US? Has  Russia made any attempt to invade US through conventional or proxy war? If not, then how is Russia perceived to be an enemy state for US wherein Russians are considered anathemas?

Let us analyze in detail the questions that have arisen here. But before that let's draw your attention to my last blog-post which analyzed the controversial decision of President Trump on Illegal Immigration and Travel Ban . You may like to dig out facts here in Trump's Era - Acts to Save Democracy For Future Generations

Russian Untouchability  

President Trump has rightfully declared that he wants to establish cordial relations with Russia. It takes courage as a US politician to go against long held popular bias and negative sentiments about Russia. Surely such intentions cannot be construed as a populist move!

It is high time to bust this myth about Russia being an enemy state to US. Consider the following myth busting facts and then form your own opinion :-

1. Russia is not USSR and we are not in Cold War Era. Today Russia is as much concerned about maintaining peace and harmony in the world as any other right minded democratic country. It has shown remarkable commitment to fight terror with commendable success.
2. On the contrary, NATO is Cold War Era outfit which needs urgent overhaul to meet the challenges of present day geo-political realities. It should throw out member countries with proven record of links with terrorist organizations. Time and again Russia has given enough proof to world, for NATO to act against its terror-linked member countries. But nobody cares! Now tell me, who is acting against world peace - Russia or Arms Lobby controlled NATO ?
3. Russia is just another democratic country, maybe with an extra dose of national pride and identity. But what is wrong with that? Open ended left liberal Democracy needs to evolve with time into something more meaningful that caters for national interest also. That is the only way forward for Democracy to survive. If not, we will soon find present democratic countries hurtling towards becoming chaotic regimes like those in Middle East and most of Africa.

Russia Vs Saudi Arabia

What is so democratic about Saudi Arabia that US loves? In the same vein, what is so undemocratic about Russia that US avoids like plague? Glance through the following revelations and decide for yourself :-

1. Both Saudi Arabia and Russia are separated from US by Atlantic Ocean and hence pose no geographical boundary threat. However, by propagating and funding Wahabi/Salafi ideology, Saudi Arabia has helped create many terrorist organizations/regimes. Wahabi/Salafi ideology is the most radical form of Islam known to mankind. By that yardstick Saudi Arabia should be anathema to US, but is its closest ally in Middle East. Russia has no such radical proclivity and yet is perceived as enemy state. Don't you find that hypocritical?
2. Russian and US scientists cooperate in many technological fields to make life on earth better for mankind. On the other hand, Saudi interaction with US has always been to find ways to expand its regional power through blackmail or machinations of Machiavellian dimensions.
3. Russia helps regimes in their fight against ISIS, as does US. On the other hand, Saudi Arabia provides clandestine financial, material and moral support to ISIS while condemning them with forked tongue.

Do you still want to fault President Trump for trying to initiate better relations with Russia? President Trump is trying to align democratic forces, without any bias. He does not carry any baggage of past hostilities and is genuinely trying to make America Great again. But that upsets very powerful vested interest groups who had earlier managed to corrupt previous US administrations, and we all know that. Ever wondered how ISIS and Clinton Foundation are both funded by Saudi regime? More on that some other time.

If you think differently from what has been said in preceding paragraphs, do pen down your thoughts in 'Comments' section and we shall discuss your point of view in the next blog-post. But if you agree, then do lend your support wholeheartedly to President Trump's efforts to make US safe, secure and Great again. That will help European nations to wake up and smell the coffee, thereby helping democracy survive. We owe at least that to our future generations!.

Trump's Era - Acts to Save Democracy For Future Generations

Trump policies and beliefs are being criticized and condemned through the length and breadth of US and the world. Protests continue till date and seems to be increasing by the day. Before you get swayed by the protests, ask yourself the following questions:

1. Why should anyone object to plans to stop illegal immigration from southern borders of US?
2. Why create furore over travel ban on seven countries, viz Libya, Syria, Iran, Iraq, Sudan, Yemen & Somalia?

Illegal Immigration 
Anything illegal should be immediately stopped. That is the Rule of Law- bedrock of any democracy. If President Trump is trying to stop illegal immigration, why should there be such massive resistance from US citizens? Are you in favor of illegal activities?Here President Trump is brave enough to risk his political career in order to uphold democratic values in the oldest democracy of the world.  You are invited to give your opinion on following views :-

1. There will always be vested interest groups to protest against Trump's plans to stop illegal immigration from Mexico. Please remember that Illegal Immigration is big business involving numerous agencies and mega bucks.
2. Illegal migrants fall easy prey to criminals. When they cannot find legal work, criminal organizations like drug mafia step in and provide work to these illegal migrants. Why should you allow conditions wherein criminal activities get boost in US?
3. Do not get swayed by what Press says. Get to the bottom of any policy. Is it advantageous to your safety and security or not? President Trump has taken a historic and bold decision to stop illegal immigration into US, unmindful of his own popularity and world opinion. Very few politicians on planet earth can exhibit such courage!

As for Press and world opinion, please discount them since they form part of interest group. If illegal immigration is such a virtue then seek answer to following :-

• Why did Italy sign numerous accords with Gaddafi's Libya to stop illegal migrants to reach Italy's shores? Even after realizing that Gaddafi's regime was committing horrendous human rights violations to the returned migrants, Italy still carried on returning illegal migrants to Libya and kept filling the coffers of Gaddafi with compensation. Where was free Press and world opinion then?
• Why couldn't Australia accept illegal migrants into their society? These migrants were just a handful, and yet Australian PM went ahead and convinced Obama to accept them into US society. In Australia these illegal migrants were isolated and kept in inhuman conditions in offshore islands. No free Press or world capital erupted in indignant protests.
• Why did UK embrace Brexit, which was primarily against open door immigration policy of EU? Can they now turn around and organize massive protests on the streets of London on issue of illegal migration from Mexico.
• Why did EU enter into deal with Turkey to absorb illegal migrants in lieu of money? Where is free press and world opinion on such double standards?

Do understand that every nation has to look after its own safety and security. President Trump is doing just that for US and has the courage to stick his neck out against  overwhelming world opinion and hostile press.

As for negative Press, please realize that mainstream Media is owned and controlled by big corporations and conglomerates. They have myriad economic and vested interests globally. You need to take their opinion with a pinch of salt and decide on issues based on national interest.

Travel Ban
President Trump has issued an executive order to temporarily ban travel from seven countries, subject to review after 90 days. Iran,Iraq, Sudan,Somalia,Syria, Libya & Yemen figure in this list of temporary travel ban. Looking at this list, can you put hand on your heart and say that this executive order is against national interest? You are invited to express your opinion to following views :-

1. Is US dumping ground for world migrants? If world opinion is so sharp on travel ban by President Trump, why hasn't any country come forward to accept these migrants? On the contrary EU agrees to pay 6bn Euros to Turkey to stop migrants from Arab countries entering EU.
2. Why migrants from these seven countries are insisting on crossing the Atlantic and landing on US soil? Closer home, they can seek refuge in affluent nations like Qatar(highest per capita income in world), Brunei(5th highest per capita income), Kuwait(6th highest per capita income), UAE(9th highest per capita income), Saudi Arabia(10th highest per capita income) and other oil rich gulf countries like Bahrain etc. US is just 14th on this list of per capita income of countries and yet there is such a do or die situation being painted for their temporary ban to US. 

US and other western democratic societies have evolved painstakingly over the decades with certain value system which is inherent and intrinsic to their behavioral pattern. These societal mores and customs have now become ingrained in their outlook to life and way of living, conforming to democratic values.

President Trump is simply trying to preserve these Western democratic societal values by imposing this travel ban. Consider the following thoughts, which are factual and are in no way a judgement on any societal values being right or wrong :-

• Migrants from these seven countries have a different value system ingrained in them over centuries. Democracy is not part of their way of life. Recently some had violently brought about regime change in the name of democracy but still failed to install democratic governments. Do you want these values to get imported to US society?
• Democracy does not mean only democratic rights without responsibilities. First responsibility in democracy is maintaining sovereignty and integrity of your nation. Nation state does not mean that there will be only one sect, or religion or ethnic group. People from these seven countries have been brought up to believe to fight for rights of only one community, with scant respect for anyone else. Their generations have struggled over years to bring down regimes primarily on sectarian lines. Do you want to be swamped by such value system in US society?
• Religion is basically a matter of faith between an individual and God. Religious places are meant to cater for facilitating this union between man and God. But religious places in Islam are fully integrated with politics of that country and remain in forefront of political discourse on daily basis. Are you ready to accept religion to interfere in US politics in times to come?

President Trump is taking all steps to save democracy in the last and oldest bastion of true democracy. European nations will wake up to do the same at some later date.

You may have different views on all that has been said above. Do give your valued comments with facts and reasoning. There maybe many aspects that I have overlooked. Do shed light on missed aspects and I will feature them in my next blogpost with your credits.
Do seek comments from your friends and family also, and let me know differing views or more details on the subject for better understanding of a complex issue.