The Invention that Changed the World

Or Rather The Invention that Changed the World and is Changing it even Now.

__________________________________________________________________________________________ There are times when I get lucky even though they are too few and far in between for my liking. Before you start imagining things, let me clarify that I am talking of the fact that Nifty futures went all the way up to around 5608, a few points away from 5635, the level where my short positions would have been stopped out, before dropping all the way down below 5530. I had said both on Thursday and Friday that more Nifty can be sold if it goes below 5530 and I did add to my short positions on Friday. The stop for the Friday trade too is 5635.

It is time for a review of global assets. Asian indices including, Nikkei (Long only above 9750) Hang Seng (Long > 23790) Hang Seng China Enterprises Index-HC1 (long > 13273), Kospi200 KM1 (long > 284.40) are in downtrends. So are Euro Stoxx VG1 (long > 3045) and S&P SP1 (long > 1348). It would not be amiss to claim that equity markets pretty much across the world seem to be in downtrends.

Commodities like Silver and Crude continue to trend down. However, Copper has moved into an uptrend which is in divergence with the trends in equities and other commodities. Gold continues to trend up. More tellingly, US 10yr bond futures (TY1 Comdty) continues to trend up. This in in line with the fall in almost all other assets and in line with continued softness in the US economy.

Given all these negative trends I am sure you must be wondering what can change all this? How does the US economy and consequently equity and commodities across the world recover? Despite this all pervasive Darkness, I can assure you that rally we will, and sooner than later. No, I do not have any ability to predict the future nor do I have any data to support my claims. But I have complete confidence in the ability of "The Invention that Changed the World"

Lest you think that this invention is of recent origin, let me assure you that this is not the case and it is something that has touched human lives not just for decades but for centuries. It is the reason why we have this modern society. It is the foundation on which all human advances have been based. The invention I am refering to is the Printing Press-invented by Johannes Gutenberg in 1440s. Now when you think about it, you will agree with all my previous statements, I am sure.

However, you cannot be faulted for wondering how can such an old invention help the equity markets? Let me assure you that this invention still has some juice left in its old body.In the hands of a creative, persistent and tenacious man like BIG Ben, this invention can still be a Lethal Weapon. I accept that he has used this weapon twice and failed but what is to prevent him from using it a third time and a fourth and so on. Sometime he is bound to succeed and asset prices will rise and hallelujah we will all be saved.

What it will do to currencies is however a different matter all together and can be a topic for another discussion, some other day. Meanwhile, I will be buying Gold.