Rank: Chief Joined: 8/4/2010 Posts: 8,977
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sheep wrote:The Dow is playing a dangerous game...remember we are in a cyclical bull within a secular bear. I still think I'm dreaming seeing the way Dow rallied from the 10K floor to 10800s since Sept 1st on very bogus US econ data and a selling bout by smart money in August. The same applies to SPX500, NASDAQ, DAX, FTSE and most major markets. All through Sept, the rally has been on very low volume. That's not a bullish market indicator. Also most major market upswings have been on gap ups. Those gaps will eventually get filled. I'm most bearish the US stocks since the rally has been supported by the Fed bank's POMO, which has been a twin treasurys offering and equities ramp up exercise. The rally is unsustainable and I expect the May lows to be broken once smart money comes back to sell. Germany has already imposed short-selling restrictions recently - the euro debt crisis is still very around and not going away soon. The same was done in US in 2008 months before the huge selloff.
As for NSE, I'm still sceptical of this rally too. Thin volume being my main reason. Our econ fundamentals are by far better than 2008 or 2009, but a bull market's robust momentum rides on steriods called solid buy volumes. A simple 1yr NSE chart with the volume indicator shows volume drought since end of June. And for this reason I don't expect 5000 to be broken by year end. And if a major selloff hits global stocks (very likely in between now and Dec), NSE will also retrace this thin volume rally.
I know this doesn't sound pleasing, but emotions aside, the global macro data is lean if not pathetic and a sharp global markets selloff will kool off NSE for a while. But at least it should sustain better than 2008 when PEV, drought and money crisis came all at once.$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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