It has been a long time since I wrote my morning note. For one, it was becoming difficult to write something interesting on a daily basis, given my insistence on writing at least one paragraph on non market stuff. For another I had started putting my thoughts on various assets in a Table and it was becoming very difficult to merge the two together. However, I do know that I found a lot of pleasure in writing it and I know of at least a few people who liked it and therefore it is worth having another go at the note.

As my Table in the later part of this note shows, most commodities are in a BUY mode. Equity indices like S&P and Nikkei were already BUYs and Nifty has joined them yesterday. HSI, HSCEI, Kospi and other could do that in the next couple of days. Surprisingly the Dollar Index continues to rally. If one looks at the past then there has been a negative divergence between Dollar and other assets. I will be really surprised if we break that divergence now. So in the coming days, we will have to either see commodities and equities reverse or the Dollar fall from here and become a SELL.

Have you seen the movie 3 Idiots? There is a phrase that is used all through the movie "AAALLLLL iiiissss WEEEELLLLL". When things look really bad for him, the protagonist of the movie chants this mantra. It looks like we have all collectively chanted this mantra from the beginning of 2009 and it seems to have worked till now. This mantra helps us to delude ourselves and live in this delusional world where all excesses of the past can be wiped out by more excesses.Unfortunately, the Greeks have clearly not watched this movie and are unaware of this powerful mantra and its delusional abilities. So they are actually thinking of cutting fiscal deficits and increasing taxes. And you know what, I do think that despite what they profess, the Americans have been secret fans on Bollwood movies and have most definitely seen 3 Idiots. What else can explain their ingenious plan to continue to print Dollars and ask their already maxed out citizens to spend more?

By the way, Nifty turned from a SELL to a BUY yesterday when it crossed 5032 at the close (as per my way of looking at things naturally) The short position that we took on 21st Jan at 5174 levels has thus been cut at 5032 for a profit of 2.7%. Since the time we have started tracking it we have had only two trades on the Nifty for a total profit of 2.2%