iCharts Discussions

[hdobhal]

Hi Sandeep,

yes possibility for even 4700 is there (Very Rare though), but that is by different calculation. I wanted to know what are chances according to EW.

how is ur trading... I hope u r minting money...

Keep in touch...

Harish

[Stockhunter]

Hi Sanmen,

Good work mate... I dont think it wil reach 4600-4700 this time in short run.. and in medium term i am looking at a new low for 2008 before year end.

By the way, today Nifty is poised nicely for a fall and if it does fall, we can have a new low by end of September/first week of October.

Cheers

[sanmen]

Hi HUnter

Thanx for writing in man!!!! yes i agree that the chances of 4600 levels is less..i am still inclined on following my earlier view which i had posted earlier..this possibility came up hence posted..

for the bottom..my near term target for Nifty is 3500-3400..when?? I dont know..am not that experienced in calculating the time required..

Happy Trading !!!!

Sandeep

[sanmen]

Hi friends

Am posting some interesting observations done by a Financial wizard on the much talked and awaited "Relief Package" for the troubled US economy & its implications on the stock markets worldwide.

Though this gentleman had quantified the movements anticipated in our markets as well but purposefully i am avoiding that part of it to avoid any speculative trading based on this..please treat this as a piece of information which is an extrapolation of the overall events as they unfold...

Paulson’s plan though faulty has scared the hell out of all Senators. President Bush has invited Obama and McCain to apprise them of the plan and seeking their approval so that the plan is not derailed after election.

Once Obama and McCain agree, there is little chance that $700 billion package may not be passed. It will be passed reluctantly and some useless matters like Executive pay are discussed. What is $10 million dollars against $700 billions?

There was a game plan (or conspiracy whatever you call) under which –
- Paulson, Bernanke and Cox (SEC) got together
- Paulson wanted to pass the bill before weekend or in any case before Sep end (reason later)
- Cox was asked to impose ban on short selling of financial shares (799 shares) until 2 Oct
- Bernanke was to spread scare that if the plan is not passed, there would be catastrophe, jobs will be lost, GDP to go down, Credit crisis to become more acute.

Why passage before weekend?
Q3 will end on 30 September after which Q3 result will start arriving on or after 15 October. If the plan is passed before September, Paulson will buy all bad assets from Goldman and others so that result looks good. The current prices of illiquid debt have risen from 20 cents to 98 cents.

Paulson has also proposed that he would buy the bad assets at discount to face value, that is, he will pay $65 against $100 face value (present market value 98 cents) to boost the confidence. This will help the bank to book even profit to reverse the excess provisions.

He ensured that SEC imposes the ban on short selling and to remain in force until the bill is passed which was expected before Sep end. Since the short selling ban ends on 2 October, it is presumed by him that successful passage of bill may cause fierce rally in financial shares due to short covering. Hedge funds and shorters will be dead in the heat.

Once Obama and McCain show the approval, other Democrats and Republican will not bother to object. After President Bush speech today, there is more than 70% possibility that the bill may be passed before Sunday.

This will cause the following:
1. Dow may rise massively in 2 or 3 days due to fierce rally in Index related financial shares
2. Gold may plummeted by 5% to 10%
3. Silver may plummet by 20%
4. Oil may drop by 10% to 15%
5. Commodities may also drop due to US$ rally
6. Euro will fall most- Yen least. Rupee will slide over 3%
7. World markets may rise.

This scenario is possible only if the bill is passed. For any reason the bill is delayed, almost everything will work in reverse gear. Since everyone is losing money and want the market to go higher, they will want to know so called good news (which is sugar coated saccharine) to fuel the rally.

SO NUTSHELL MKTS WOULD MOVE FIERCELY IN EITHER DIRECTION (UP OR DOWN) DEPENDING ON WHATS THE OUTCOME OF IMPORTANT EVENTS LINED UP..

I personally am expecting a bounce from current or slightly lower levels..the pattern that i observe is forcing me to keep both bullish and bearish options as discussed earlier open as of now..its time to look at OTM calls/puts right now for some quick and handsome returns depending on whether u are bullish or bearish..

LAST BUT NOT THE LEAST : BE CAUTIOUS...PLEASEEEEEEEEEEEE

Happy Trading!!!!!

Sandeep

[sanmen]

Seems like 3800 may not be crossed in the short term now..once we reach around this level nifty can move down again with trgts of 3150-3000 range