Bad Dream

I get really worried when all indices and commodities point in the same direction-as they do currently. It means only one of two things. Either we are in the middle of a massive trend and therefore everything is pointing in the same direction or we are about to end a trend and this is the proverbial lamp burning brightly one last time before the flames go out.

It is great if we are in the middle of a massive trend. The problem is that it does not feel like that to me. It feels more like a trend that is now tired and looking for reasons to extend itself. At times like that, any sign of a failure of the trend could lead to a sharp reversal. The fact that all assets are pointing in the same direction could only accelarate the fall-if and when it starts.

But being a slave of MyTS, I continue to be long the Nifty. My trend change level for Nifty now is at 5095. If we break below that level then I am out of my long positions and will put on a short.

One of things that I read about yesterday was that Dubai celebrated the opening of the Burj Khalifa in grand style. There was lot of partying and gaiety. It is almost as if the fears of insolvency and the problems of debt were all just a bad dream. While this time around the last minute infusion of 10bn USD saved the day, one will have to wait to see whether any lessons have been learnt from this episode. Going by the partying it is difficult to tell. But why talk only about Dubai?. The world markets are continuing their party after the horrors of 2008. Did I hear what 2008? Yes, it does seem like a bad dream after all, doesn't it? If the world can ignore a humungous trillion dollars in bailouts then a paltry 10bn USD is hardly worth worrying about.