Categories
economics Misc

6 May 2009 : Will markets crash

its quite common sensicle to say that the market is ripe for a fall .Funny thing is it can go up even more before such a fall .

And that bring us to the important point .
Why did the market rise in the first place ?
remember the rise was vigorous so the reason has to be strong enough .And its when this reason is violated the market will fall [ not dip … but fall ] .

even if one forgets the fundamentals and monitory situation by popular concepts the market rose since the US and recession showed signs of some recovery .

Now for any down circuit day the same recovery should come under question .
So in absence of some negative outcome from bank stress test or some moment of truth sort of news from US there can not be a severe fall !! .

Point I am raising is where you are an economist/fundamentalist type or you are the one who follows popular media chances are the most you will be wrong in judging the extent of the fall . By fundamentals the markets should be at bottoms and by popular media there need not be much fall , say nifty holding 3000 .
As is clear from above one should check his own reasons and logic before believing in the fall and the estimated extent of it .

At a fundamental level we can take a strong cue from fall of chryslar and lehman .There are reasons to suspect that these are the test cases to measure the chaos .The real institution in danger are under the wraps . And its from such institution that the surprise or bolt from the blue comes [ and fortunes made ! ].

On the same line one need to put all good and bad corporate news in perceptive . In recession time when tata gets full subscription for nano which means some solid thousands of ruppes should one give a damn of how many times ppl expected them to be subscribed ?RPL merger wasn`t a crown jewel of corp governance then why bother about the same getting confirmed .Air tel made more subscription even in recession so did HH showed decent bike sale . interestingly ICICI shot for what reason ? was it welcome to new CEO ?
in the event where IT ppl [as a case in point for high flying jobs] who primarily escalated house price in most of cities , are facing salary and job cuts how can Banks be a good place to invest !…

and in the event one is trader shouldn`t he think more about simple indicators like volume and price trends .

stray thoughts … few question …. no offense meant .

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