Public Pronouncements

After all the crowing I did yesterday about "remaining" short, the market rallied to end flat. But it did not trigger my buy levels and therefore I can say again today that I remain short and will cut my short position and go long only above 5176. Read yesterdays note if you again want to be reminded of the implications and joys of "remain"!

While it is normally the preserve of the politician to add fuel to the market fire with wild chatter, it was the turn of Fitch to take a leaf from their book yesterday evening. S&P had been trending up but all Fitch had to do was warn of a contagion from Europe and the markets started crapping out. Actually it never fails to amaze me! How the market ignores most problems until a renowned figure or authority articulates the same problem publicly and brings what was known to everybody privately into the forefront and therefore impossible to ignore. It is only then that the markets start reacting violently.

Which is why sometimes, all this story about a problem being well known and therefore priced in already rings hollow. For eg, the fact that interest rates have been hardening in India and that companies will find it difficult to service their debt is well known. Earnings growth is going to be hit and more importantly NPAs in banking sector can increase are all reasonable assumptions and therefore should be in the price. But I will not be surprised if the market reacts violently if someone in authority, like say the RBI, actually expresses the fear of an increasing NPA and reducing growth.

Nice to know that I could write four notes this week without resorting to gimmicks like Traderman etc. But he refuses to leave me in peace and I keep reading his diary so I cannot promise that I will never write about him. But todays note is done and all that is left to do is to remind you that I am short and will cut and go long only above 5176.