FUNDAMENTALS AND STOCK MARKETS - "TU WAHAN MAI YAHAAN .... ZINDAGI HAI KAHAAN”

• Mediocre quarterly company results

• SME’s struggling for labour, money, customers and payment collection

• Ever increasing cases of Corona

• Negligible retail sales in parts of India which have opened

• Frustrated public coupled with frustrated government

All this comprise a perfect recipe for markets to go down. The big problem – markets moved exactly in the opposite direction. WHY??  

The Governments of the world are creating unprecedented liquidity which is bringing the markets up. Instead of searching for more reasons, let’s look at some data.  

Gold and Silver (USD prices) are bullish but in consolidation for short term. Brent Crude is showing room to move till $50 from current $40.  

Other major world indices – developed as well as emerging markets have room to move up 5% to 8% before hitting major overhead supply levels.  

USA and European countries already have the luxury of creating money which the developing nations do not. Inspite of this, all Emerging market ETF’s traded in USA have gone into a bull zone.  

In India, Equally weighted Nifty 100 is showing promise on charts. All stocks forming part of the broader markets are showing interim bottoming out patterns and coming up on healthy volume.  

As mentioned in my earlier reports, this up move is a part of the larger bear market which we have entered. When will this liquidity bubble burst is not known to me. We should try and ride the wave till it lasts.  

It is tough to bet money on the up move when people around you don’t have enough business even to keep themselves busy for the day. I faced the emotional challenge because of which, I could deploy only around 65%. Balance sits in cash as of now and hopefully awaits for further buying signals.